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League's Mark Strong explains POStPlan

League's Mark Strong explains POStPlan

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1
MARKSTRONG:
Welcometoe-learning.Today,I’mgoingtogooverthePostalService’spostplan,startingwithsomehistoryonwhatbroughtustothispoint,choiceswehadtomake,andtheactualstructureofthepostplan.YouwillneverknowhowmuchtheexecutiveboardandIhavestruggledwithhowtodealwiththisplan.Intheend,wefeltitwasbettertobeinvolvedandhaveinputwiththeplanthantobeleftbehindwithnosayatall.Giventhealternativeswefaced,thechoicesofhavinginputhaveresultedinafarbetterplanthantheinitialplanwewerebriefedon.Therewillcontinuetobeupdatesandchanges,butfortoday,thisisthepostplan.Sometimestoughchoiceshavetomadeandwon’talwaysbepopular,andthisisoneofthem.ProbablythesinglemostchangingeventwastheproposedCFR241changethatwasimplementedonDecember1
st
.ThischangeallowedthePostalServicetostaffapostofficewithanypostalemployee.Solet’stalkalittlebitaboutthehistorythatgotustothispoint.OnMarch31
st
,2011,thePostalServicefiledachangetoCFRpart241.Therearenumerouschangestothisproposal,butthetwomostimportanttopostmasterswasaconsolidationandthefactthatanypostalemployeecouldbeusedtostaffapostoffice.OnMay23
rd
,theAPWcontractwasratified.WithinthatcontractwastheintroductionofthePSEs,andthePSE3,whocouldbeusedforanynewwork.OnMay23
rd
,LeagueandNAPUSfiledaformalcomplaintwiththePRCtostoptheproposedchangesthatwereintroducedonMarch31
st
.Andfinally,onJuly2011,theU.S.PostalServicepulledthetwomajoritemsoutoftheproposalforthatCFRchange.RememberIsaidthattheCFRchangehadnumerousproposals.Butwithinit,thetwothatwereourmainconcernandthetwothatwefiledacomplaintonwastheconsolidationandthestaffingofpostoffice.SothePostOfficecontinuedtheirproposal,buttheypulledthosetwomajoritemsfromthePRCnotification.OnAugust11
th
,thePRCdismissedouroriginalcomplaintsincethePostalServicepulledthetwoitemsthatwehadfiledacomplainton.ThePRCstatedwecouldrenewthatcomplaintifthePostalServicesubmittedthechangesagain.OnSeptember1
st
,2011,theLeagueofficereceivedacopyof2012operationalinitiatives.ThatPowerPointwas22pageslong.WithinthatPowerPoint,Iwanttosharefourslideswithyou.NotethatthePowerPointwasdatedSeptember1
st
,2011.ThisslideshowsthereleaseofthefinaltworulesthathasnotevenbeenfinalizedyetthatwasdatedSeptember1
st
,andthosetwofinalruleshadnotevenbeenfinalized.ThoseweretheonesthatwerepulledfromtheJulyinitiativefromtheU.S.PostalService.Thisslidetalksaboutthehighcostof
 
2laborinthelow-activitypostoffice,aswellasthepotentialcoststructurechangesafterthelasttworulesarefinalized.AndthisslidespeaksoftheESA6EAS,excuseme,16andbelow,whichweknowarethe15,000postofficesoftentalkedaboutduringclosing.Also,theAPWcontractproposedrulechangeallowedforthepostofficemanagementstructurechange.Atthistime,wehadnopostmasterpositionstocompetewiththelow-wagePSE.OnOctober26
th
,2011,thePostalServicefiledthefinalrulewiththeFederalRegister,amendingregulationswithregardtopostofficeclosing.ThesearethetworulesthatwerepulledfromtheproposalinJulyof2011.Theseproposedchangeswouldbecomeeffective12/1/2011.OnNovember7
th
,LeagueandNAPUSjointlyfiledtorenewthecomplaintwehadfiledpreviously.Weaskedthatthecomplaintbeexpeditedsincethefinalrulewastobeimplemented12/1/2011.Unfortunately,onNovember30
th
,2011,thePRCdeniedthecomplaintandthefinalrulewentintoeffecton12/1.Let’stalkalittlebitaboutthehistoryofclosures.Aswecanrecall,inJulyof2011,thePostalServiceannouncedtheclosingof3,750offices.Atthesametime,thePostalServicerequestedanadvisorywiththePRContheretailoptimizationinitiative,theRAOI.Aboutthatsametime,wewerestartingtoreadnumerousarticlesinnationalpapersquotingpostalleadership,statingthatthe3,750wasjustastart,thattherewasgoingtobeanother4,000officesclosedafterthat.Andinfact,theysaidby2015,nearly15,000wouldbeclosed.OnDecember15
th
,amoratoriumforclosureswasputintoeffectupuntilMay15
th
.Rightafterthat,onDecember30
th
,thePRCadvisoryontheretailaccessoptimizationstatedthattheinitiativewasflawed.We,infact,haddoneanexcellentjoboflayingouttheproblemswiththeRAOI.Wehadwonasmallvictory.OnFebruary23
rd
,thePostalServiceannounceditwouldcontinuetheadministrativeworkforclosingpostofficessoafterMay15
th
,postofficescouldbeclosed.OnFebruary23
rd
,theyalsogavenoticetotheclerksthatwereimpactedbyplantclosuresandgavethemRIFnotices.Ifnolegislation,postofficesandplantswillbeclosedafterMay15
th
.Aboutthissametime,inthenewspaperswestartedreadingarticlesfromsenatorsandcongressmenaboutthepayofpostmasters.Infact,fromSenatorDurbin,hecommentedthattheclosingofpostofficeswasn’ttheproblem.Itwasthefactthatpostmasterswerepaid$60,000-70,000inverylowactivityoffices.OnFebruary8
th
intheFederalTimes,thePostmasterGeneralwasquotedassaying,we’llsoonbeissuingaframeworkforarevisedretailstrategythatwehopewillaccommodatemanyoftheconcernsthatwehaveheard.Mr.Donahoehad--thatquotewasfromameetingthatMr.Donahoehad
 
3withtheBoardofGovernors.Thebottomlineisthatrestructuringwasgoingforwardwithorwithoutusbeingapartofthediscussion.Itwasdecisiontime.OnJanuary2012,theLeagueandNAPUSactuallytriedtogetasecondtierpayforvacantpostoffices.Sothosepostmastersgoingintovacantofficeswouldstartatalowerpay.Wecouldseethewritingonthewallandweweretryingtoheaditoff.Laterthatsamemonth,LeagueandNAPUSwerebriefedonthepostplan.Soafterthebriefing,wehadalternativestodiscuss.WecouldtakelegalactionwithboththePRCandcourt.Ifwedecidedtodothis,itwasall-in.Oncewestartedthatlegalaction,wewerenotgoingtohaveachancetositdownanddiscussalternativestothepostofficewiththeirpostplan.Wecouldtakelegislativeaction,aswehadwiththeclosingofruralpostoffices.Andwehaddoneawonderfuljobwithtalkingtothesenate,congress,andevenourcustomersabouttheneedforruralpostoffices.Whatwehadn’tdoneiswehadn’tsavedpostmasters.Wehadsavedpostoffices.Wehadsaveduniversalservice,butwehadnotsavedthepostmaster.ThesecondproblemwastellingcongressandourcustomersthatAPWPSEisnotasgoodasthepostmasterwouldmeanwewouldhavetwofights:theAPWaswellastheU.S.PostalServiceontheHill.ThePostOfficewasgoingforwardwithPSEsorwithanalternativethatwecouldoffer,andcareeremployeeswerenotgoingtobeonthetable.Sowithadvicefromcounsel,wedecidedtotryandsavewhatwecouldofover17,000jobs.Let’stalkalittlebitaboutthebackgroundandstructureofthepostplan.Currently,thereare17,728postofficesthatwouldbeimpactedbythepostplan.Iwanttomakethreekeypoints,andI’lltalkmoreaboutthelevelsalittlebitlaterinthepresentation.One,wewereabletokeeppostofficesopen.Two,wesavedalmost8,000careerjobs,upgrading3,807ofthemtolevel18offices.Andthelast,althoughnotcareerjobs,thetwosandthefourswillbePMRsandwillnotbePSEs.Sohere’showthepostplanwillwork.It’sgoingtoallowsomedirectionalmovementofpostmasterstohigherlevelsorthroughretirementoptions.There’sgoingtobeRIFprotectionfortwoyearsforeveryimpactedpostplanpostmaster.Therewillbeanincentive-basedVERretirementtobeofferedtoallpostmastersnomatterwhattheirlevelis.Thosejobsthatarebeingposted,thosepostmasterpositionsthataregoingtobeposted,willhavelimitedcompetition,meaningonlypostmasterscanputinforthosepositions.Thismaybeuptothreerounds:tworoundsofbiddingforsureandpossiblyathirdroundtomakesurethatwegetasmanyimpactedpostmastersmoveduptheladderaswepossiblycan.

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