Union seeks plan to reorganize Postal Service
NEW YORK - Can Ron Bloom, the restructuring expert who helped shore up the US automobile and steel industries, save the ailing Postal Service?
A labor union representing more than 280,000 current and retired letter carriers is counting on him.
Yesterday, the National Association of Letter Carriers said it had hired Bloom and Lazard, the financial advisory firm, to develop a strategy to revitalize the deficit-laden Postal Service.
“We have retained Lazard and Ron Bloom to make sure we explore and expand the various range of solutions to address the Postal Service’s fiscal crisis as well as long-range business strategies not being pursued right now,’’ said Fredric V. Rolando, national president of the union. “They have experience in analyzing large, financially complex institutions and crafting creative solutions.’’
In 2009, for example, Bloom, as a senior adviser on President Obama’s automotive industry task force, helped to reorganize General Motors and Chrysler. Meanwhile, the Treasury Department last year hired Lazard, which has worked with the United Auto Workers union, to advise the government on the initial public offering of GM stock.
Bloom, a former Wall Street investment banker, also worked with the United Steelworkers as a strategic adviser to help revive bankrupt companies and consolidate the nation’s steel makers to help save jobs.
Rolando said it was too soon to say how long the advisory team would work for the union or how much the project would cost. A Postal Service representative did not immediately respond to a request for comment.
The Postal Service, facing a deficit of nearly $10 billion this fiscal year, is confronting critical problems in both revenue and expenses. With nearly 600,000 employees, it has huge labor costs as first-class mail, a major source of revenue, has been declining because of e-mail.
Postal Service executives have proposed major cutbacks to the workforce, postal locations, and delivery days.
The Postal Service also must comply with a law requiring a $5.5 billion annual payment to finance the health coverage of future employees. The Postal Service says it has overpaid into the federal pension plan and proposes to recover billions of dollars from the government to meet the health payments.
But the union’s partnership with Bloom and Lazard indicates workers want to shift the debate about cost-cutting toward growth strategies and making the agency viable for the long term.
“We believe there is a business here,’’ Rolando said. “We believe there is a way to grow the business.’’
Over the past five years, mail volume has declined by more than 43 billion pieces, according to the Postal Service; the volume of first-class mail has declined 25 percent.