Wednesday, February 23, 2011

Negotiating with the APWU is a Smart Business Decision

The Postal Service has made a smart business decision by continuing to negotiate with the APWU, three months after the contract with the union expired.   The decision to negotiate changes in a labor contract that will reflect the new competitive reality, rather than go to arbitration reflects the fact the Postal Service needs the buy-in of its employees on the changes that will be necessary to turn the Postal Service's finances around.

The Postal Service's negotiations with the APWU will likely extend until after the Postal Service announces on March 25th the 7,500 cuts in the administrative and line management jobs mentioned at the last Board of Governors meeting by Postmaster General Pat Donahoe. At that point the Postal Service will likely announce a significant reduction in the number of districts in a move that could follow a USPS - Office of Inspector General report's recommendations to cut between 14 and 32 districts and up to three more areas.   These cuts, if they are in this range, will communicate clearly to production employees the seriousness of the situation and that sacrifices will be shared by management as well. 

The value of the Postal Service's approach is illustrated by a counter example, Wisconsin Governor Walker's approach to getting contracts changes with public employees in Wisconsin.   By attempting to impose not only changes in benefits but also eliminating collective bargaining, he has created a volatile adversarial relationship between public employees and the state of Wisconsin that did not exist previously.    While he may get what he wants, he will make the state of Wisconsin, its counties, municipalities, and school districts much less attractive employers when the financial crisis passes.

The approach that the Postal Service is using is an example of the best strategies that the private sector uses to deal with managing the process of adjusting labor agreements.   Steven Pearlstein states in his column in today's Washington Post why looking toward the private sector would favor the Postal Service's approach over Governor Walker's.

Back when I was working at Inc. magazine in the mid-1980s, we loved nothing better when approaching a public-sector issue than to ask how the private sector would handle it. Faced with the situation in Wisconsin, we would have called up Tom Peters or Peter Drucker and posed the example of a new chief executive brought in by the shareholders (i.e., the voters) to rescue a company suffering from operating losses (budget deficit) and declining sales (jobs). Invariably, they would have recommended sitting down with employees, explaining the short-and long-term economic challenges and working with them to improve productivity and product quality in a way that benefits both shareholders and employees.

Now compare that with how Wisconsin's new chief executive handled the situation: Impose an across-the-board pay cut and tell employees neither they nor their representative will ever again have a say in how things will be run or get a pay raise in excess of inflation. A great way to start things off with the staff, don't you think?   

Surviving the current financial crisis requires that the Postal Service follows the best management thinking around.  Knowing that Pat Donahoe is following the thinking of people like Tom Peters and Peter Drucker should give Congress, customers and employees some reassurance that the Postal Service will weather the storm.

Update 12:04 pm

The March 25th date for the 7,500 job cuts was confirmed by the Postal Service

Note of thanks:
The early readers caught numerous spelling and typographical errors.   I thank them for their indulgence in wading through the uncorrected post.  Again, I apologize to Pat Donahoe for having as much trouble spelling his name as others have spelling Muammar Qaddafi / Moammar Gaddafi's name


Anonymous said...

I think the post office ought to break up the unions so they can be run more efficiently.

Anonymous said...

Pointing spelling errors as a good intention is ok. Attacking someone's writing substance and denouncing legitimate points because of a couple of spelling mistakes is the weakest form of counter-argument.

What do you think about this?

New bill in the Senate - refund CSRS overpeyment over 30-years beginning in 2012 and adjust the remaining PAEA health-care pre-funding to a 30-year-term. No other strings attached. Call it something like The Simple Adjustment Postal Act of 2011. (SAPA - or something like that).


Anonymous said...

Hello, In response to anonymous about breaking up the union so post offices can be run moire efficiently, I t is obvious that you never belonged to a union or worked at a post office. If the postal service becomes privately run, th work turnover rate would have a negative impact on timely, correct dervice and deliveries. It is a science to remember anfd recognize addresses and names. Alos, would you like to work in below zero weather, 100degree heat and not be compensated? There is a reason why many postal employees have life long health and job-related injuries. It is paert of the job. So the next time you see an employee, look past the complaints generated by most management decisions and think about how hard, mentallky stressful and physical the jobs reallky are. Thank you anonymous

Drewk86a said...

Anonymous said...
I think the post office ought to break up the unions so they can be run more efficiently.

The Post Office actually runs very efficiently. When you can, for 44 cents, deliver a letter from NY to California, with an on-time rate above 95%, you must be doing something right!

The troubles with the USPS have nothing to do with efficiency. The USPS has seen consistent prouctivity gains every year since the '90s.

The USPS problems stem from Congressional meddling, overpayment by over $156 billion into the CSRS and FERS retirement funds, and an upper management bent on cutting service rather than growing service.

No, my friend, the USPS is not inefficient. It's employees have stepped up to the plate and continue to get the job done. Look elsewhere for your Scott Walker-ish union busting rhetoric.