Sunday, November 21, 2010

APWU Contract: Facing a Tradeoff

Recent statements from APWU President Cliff Guffey clearly indicate that union leadership realizes that the next contract will result in a trade-off of job security and wages.  In announcing the extension of negotiations for an additional three days, he stated “Every proposal we have made to preserve jobs for our members.  Restoring work that has been outsourced or assigned to managerial personnel will bring stability to APWU members who have suffered extensive excessing and reassignments." 

In agreeing to extend negotiations, APWU President Cliff Guffey clearly understands that the union faces the question:  "Is the risk that the trade-off between jobs and wages could provide less job security if consummated as part of arbitration without providing any relief form the wage and benefit proposal that the Postal Service made in its economic proposal to the union?"

In its economic proposal, the Postal Service proposed a two-tiered wage structure with new-hires earning less than existing employees.  Two-tiered wage proposal have recently been implemented in union agreements at Caterpillar, Chrysler, General Motors, Harley Davidson, and other U.S. manufacturing firms facing challenges relating to the recession and increased competition from manufacturing plants overseas.   A recent New York Times article noted that two-tiered wage agreements in contracts signed recently differ from similar arrangements that were introduced two decades ago in that wages no longer snap back to the higher level at the end of the economic difficulty.  Instead, the new lower wage structure becomes the new wage structure of the company and only existing workers remain grandfathered into the higher wage structure. 

In arbitration, the Postal Service could present the results of union agreements at these firms as well many others to support its economic proposal.   Given the Postal Service's financial condition, and a clear indication that the number of plants and retail facilities where APWU members work will be declining over the term of the next contract to support both the economic proposal and a relatively weak proposal preserving jobs of existing APWU members.

APWU President Cliff Guffey and his leadership team have a difficult job in these negotiations as the cards that the APWU has going into arbitration are weak.  Possibly even more difficult is trying to sell to the rank and file a negotiated contract that introduces wages and benefits for new employees at lower levels that those that existing employees now receive while existing employees receive relatively limited assurances of job security given an expected increase in the pace of plant consolidation.

The Postal Service and APWU could help ease this process by including a number of provisions in their agreement that could ease the mind of employees whether they are asked to ratify a negotiated agreement or required to live with the results of one consummated via arbitration.   These should include:
  • A streamlined process for implementing incentive-based early retirement programs with the focus on allowing the Postal Service to implement early retirement programs on a facility by facility basis.   This would give employees faced with the possibility of a long distance transfer, when a plant is consolidated or volume drops faster than anticipated the a real option to retire rather than accept the transfer.   Both the APWU and the Postal Service would need to jointly work with Congress to show why not fixing the retiree cost issues may prevent the Postal Service from reducing its costs quickly by preventing it from offering realistic early retirement incentives.
  • A joint task-force of APWU and postal executives to examine how the two-tiered wage structure could be used to compete with Pitney Bowes and other pre-sorters for sorting mail with type-written addresses.    Given that both pre-sorters and the Postal Service use similar machines to handle sortation, and this mail is significantly less likely to require manual sortation than single-piece mail, a lower wage structure could allow the Postal Service to effectively compete on price for origination sortation.   The primary challenge here is the continued linkage of single-piece mail rates and presorted rates that could prevent the Postal Service from effectively competing for this business.   
  • A joint task-force of APWU and Postal Service executives to examine the retail infrastructure with a particular focus on looking at 1) how the Australian model of retail services could improve the financial viability of existing outlets, and 2) developing a new job-category for APWU employees to support a retail infrastructure that includes a combination of corporate owned, franchised, and self-service outlets.    For example, APWU members could provide the staff necessary to run and maintain a network of off-site self service outlets similar to current automated postal centers (APC's).
All three of these ideas are based on information previous prevented in this blog.  They offer opportunities that allow existing APWU members to more easily deal with the transition to a Postal Service that has a smaller footprint as well as create real opportunities for both existing and future APWU members in the competitive postal marketplace. Most likely there are numerous other ideas for easing the transition to a smaller Postal Service footprint or creating new opportunities for APWU members and I look forward to seeing additional ones from introduced in comments to this blog.  


Anonymous said...

This story does touch on a major component of the contract talks, and a concern for many years. Contracting out of postal work has hurt postal staffing, both in mail processing and in retail services. It has been proven that the USPS can do presorting work with existing automation cheaper than what the USPS literally pays the private contractors in the form of excessive discounts and rebates. If the PO was forced to keep this work in house, even at current rates of labor, it would save money and provide work for more postal employees. Granted the presort houses would be shut down, but that is a price to pay for being in this fickle business. Contracted Postal retail stations are in the same boat, with the USPS paying for everything but the employee in these situations, allowing non-postal people to do all the work that a fully trained postal employee can do, minus the constant micromanaging the postal worker must endure. It has been proven that a real postal retail employee can generate far more revenue than a non-postal person, even despite the fact that the PO does not pay this person directly. The contracted station does get a generous percentage of all sales as payment, however, so these people are not really the free labor the PO presents them to be. One final factor to consider here, and possibly the most important, at least to the customer, is the fact that there is NO "sanctity of the mail" when non postal people are selling and handling the mail. If customers knew who was handling some of their personal packages and letters, they might be shocked to see that Johnny the produce boy was looking at their mail or that Sam the convicted child molester was working in the presort house that their mail went through.

So, yes, if this contracted work could be brought back in house, ensuring work for all, that would be worth a two tier wage system. In fact, a two tier wage system would be something that could be open to further negotiation at a later date, when and if the economy and the Postal Service might be in a better situation.

Anonymous said...

APWU needs to bite the bullet & demand that USPS come under proper management. Remember that USPS management is almost all in-bred. PMG Potter (30+ postal employee/former clerk) is being replace by Dialahoe (30+ postal employee/former clerk). These custodian/clerks come to USPS because they are uncompetitive for private sector jobs. They end up being Area managers/PMG. Most are former APWU members. It is an avenue for advancement for APWU members. It is time for the inbreeding to stop. USPS has simply hit a leadership wall. These blue collar workers posing as CEO's simply must go back to pushing a broom.

Anonymous said...

We can do all that IF management agrees to downsize itself immediately & permanently by 50% and agrees to 25% salary cut and agrees to 100% cut in bonuses and the new postmaster must resign with retiring postmaster.

Anonymous said...

A major thing that needs to be mentioned: A majority of the outsourced operations can be done more efficiently and cheaper by current employees.

The two-tiered system is not directly tied to the concerns of worksharing. It is simply a proposal to reduce wages and benefits. The current postal system is not broken. Without the retirement overcharges and the mandated prefunding USPS would have been an exemplary model for other public and private agencies during the economic recession.

I have serious doubts that - in case of arbitration - the Postal Service would benefit from presenting the results of two-tiered agreements at companies such as Caterpillar, Chrysler, GM etc. As you obviously realize, these firms are "facing challenges relating to the recession and increased competition from manufacturing plant oversees."

In arbitration, APWU could produce evidence that postal worksharing is seriously flawed. On the other hand, I don't have enough information on the two-tiered proposal put forward by management. When all details are in ... then, I expect a burst of ideas pouring in from your commenters.


Anonymous said...

we run pre-sorted carrier walk sequence mail, delivered from contractors every night! Standard and First class. Don't understand this, that mail is treated like a letter from my mom with a 44 cent stamp on it! Just to get all the DPS mail in one tray. Not sure of the discount between a zone sort and a WSS sort, but there should be none. Lowest discount should be a zone sort.