The U.S. Postal Service is facing a major leadership change in the midst of serious financial problems and a push to reduce its workforce.
Postmaster General John Potter on Monday announced he will leave on Dec. 3, after 32 years with the Postal Service, including nearly 10 as its chief executive. Deputy Postmaster General and Chief Operating Officer Patrick Donohoe will succeed him. Donohoe has worked for the Postal Service since 1975.
Potter was responsible for the Postal Service's 10-year strategic plan, introduced in March, to restore the agency's financial stability. The proposal includes initiatives to reduce mail delivery to five days and to increase workforce flexibility. USPS wants freedom from work hour guarantees and set schedules, and is seeking the ability to adjust hours quickly and use more part-time staff.
USPS spokeswoman Joanne Veto said Donohoe was involved in creating the strategic plan, including provisions to cut costs through work hour reductions. Potter's retirement won't create gaps in implementation, she added.
"It's really a blueprint for anyone to follow," Veto said. "The plan is still in place; it's still actionable."
The Postal Service already has reduced career employment from 787,000 positions in 2001 to about 583,000 through attrition. Nearly 100,000 of those jobs were eliminated in the last three years. USPS also has slashed administrative work hours by 15 percent and processing work hours by 30 percent between fiscal 2008 and fiscal 2010. Potter has said moving to five-day delivery would trigger the need to reduce work hours further.
Labor costs account for nearly 80 percent of the Postal Service's expenses. The agency in October announced it lost $6 billion in fiscal 2010.
According to USPS, during Potter's tenure, Equal Employment Opportunity complaints declined 50 percent, work-related injuries were cut in half and the number of labor negotiation cases pending arbitration dropped from 93,530 in 2001 to 18,750 in 2009.
Fredric Rolando, president of the National Association of Letter Carriers, called Potter "an honorable partner," but noted his union also had "profound strategic differences" with the outgoing leader. Rolando said he looked forward to working with the new postmaster general in the coming months.
"Last year Donohoe said in an interview that 'Our unions want to do the right thing. We have to resolve pay and labor issues internally and I think that it's important that we do that, because if we do that, that makes for a stronger Postal Service,' " Rolando said. "I could not agree more with that statement."
NALC and the National Postal Mail Handlers Union will begin their collective bargaining processes in fall 2011. Talks with the American Postal Workers Union and the National Rural Letter Carriers Association currently are under way. According to Veto, the leadership change will cause little interruption in contract negotiations.
"Our challenge going forward is to implement the ambitious plan now in place to assure the continued viability of the Postal Service in fulfilling its mission of providing reliable, self-supporting, universal mail service to our nation," Donohoe said in a statement. "While we are confronted by challenges, I am confident we will succeed."