USPS Announces Closure of Dayton Processing Plant
Last Thursday the U.S. Postal Service (USPS) announced new plans to consolidate or close 223 mail-processing plants across the US. The plan affects 35,000 jobs starting in late May or June. The USPS has a total workforce of over 574,000 employees. The plan is a response to serious budget shortfalls as the organization saw an $8.5 billion budget deficit in 2010, and has been losing money at a rate of about $3 billion per quarter in 2011. The Postal Service says that it faces $18 billion in losses by 2015 if nothing is done. The announcement will impact the Dayton postal processing center located on Fifth Street in downtown Dayton, where nearly 330 postal workers will be affected.
The Postal Service money problems to some degree are the result of declining first-class mail volumes and a congressional mandate to prefund retirement health care benefits. First-Class mail volume peaked in 2001, but from 1998 to 2008, First Class mail has declined 29% due to the increasing use of email and the World Wide Web for correspondence and business transactions. Lower volume means lower revenues.
The plant consolidations are part of a number of controversial cost-cutting measures under consideration at the Postal Service. Also on the table are drastically reducing Saturday service, delaying delivery of some first-class mail, closing a number of post offices and hiking the price of a first-class stamp by a nickel to fifty cents.
The news was not well-received by either the workers or the local and federal elected officials representing the Dayton area. Jeanette Carlton, president of the American Postal Workers Union Dayton Area Local, said that under contract, members of her union cannot be laid off and they cannot be moved to positions beyond a 50-mile radius, and she said Columbus and Cincinnati are outside of that range. Elected officials have also come out against the consolidation.
Initial discussions of consolidating postal facilities across the country were raised last fall, but strong Congressional objections led to a moratorium. The plan was placed on hold until May 15, 2012. This moratorium was designed to give Congress a chance to enact postal reform legislation. U.S. Sen. Sherrod Brown, D-Ohio, reacted to Thursday’s announcement by the USPS, stating that the postal service’s decision to transfer personnel from the Dayton plant to Columbus violates the “spirit” of a moratorium agreement by the agency on closing and consolidating facilities.
Forum Question of the Week:
Is the closing of the Dayton mail processing center, possibly in violation of a union contract, a reasonable solution to help control the growing deficit in the USPS budget?