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.  

Job Cuts or Wage Cuts (2)

According to Radio Netherlands Worldwide, the Dutch postal union has agreed to an new contract with TNT that chose job cuts over wage cuts. The union agreed to the contract once it realized that the job cuts were inevitable.

Immediately, 5,000 postal employees or around 22% of all postal employees will be laid off. An additional 6,000 jobs will be eliminated with retirements, not renewing temporary contracts, and not filling vacancies. When the process is over TNT will have little more than half of the employees the have today.

TNT has an advantage over the USPS as it can afford the severance, early retirement incentives, and unemployment expenses associated with the layoffs. Also TNT does not have to deal with RIF rules that make determining who is left aft a layoff a real challenge for management.

While the Postal Service may not have to drop employees by half, further reductions beyond what attrition produces appears inevitable over the lives of new postal union contracts. Developing methods to make the reductions as painless as possible for employees and management would seem to be an area that will come up in the current negotiations.