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operations of the Postal Service. Since the plan was originally announced in August, my office has been flooded with calls from postal employees, many with decades of service, who do not know what the future holds and have not been given any information from management. These employees have been told that every job will be abolished and that every employee must reapply to work in the new, restructured U.S. Postal Service. Many employees have called my office complaining that they have been coerced into retiring prematurely by supervisors who tell them that either they retire or another employee will lose his job.
Anonymous letters have come into my office from across the country from employees who claim that they will be forced to sign into a voluntary downgrading in which they waive their rights. under prior compensation agreements. Anonymous calls have been made complaining about the creation of a legal defense fund to handle the large number of expected lawsuits from employees who have been laid off.
In the Federal workforce, word travels fast. When there are any efforts to downsize an agency, rumors are sparked and travel like wildfire throughout the Department, morale is quickly destroyed, and employees who have dedicated their lives to the agency fear for their jobs and their futures. The restructuring of the U.S. Postal Service is a classic study of this phenomenon because a downsizing was immediately announced and no subsequent efforts have been made to fully inform the employees of what is going on. I agree that changes must be made in the Postal Service and certain positions must be eliminated. The changes, however, must be made with all respect and consideration to those employees impacted. In the Federal Government we have procedures for conducting a downsizing and ensuring that the rights of employees are protected. This is the largest Federal reduction in force. Federal RIF procedures must be implemented.
The biggest complaint that my office has received about this reorganization of the Postal Service is that there is no plan of action. An announcement was made that 40,000 managerial positions would be abolished within 60 or 90 days of a given date, but there has never been any indication that there had been meaningful consultation and discussion of the plan to implement that reduction. We are here today to hear that plan and to hear what efforts are being made to ensure that these RIF's are being carried out humanely. I am particularly interested to see what efforts are being made to assist the employees who will be laid off and what efforts are being made to dispel the fears and the rumors of the impacted workforce, and, again, I thank you very much, Mr. Chairman, for having this hearing today.
Chairman CLAY. Thank you.
Mr. MCCLOSKEY. Thank you, Mr. Chairman.
I have no formal statement. I will say that I never have seen a postal hearing with such an attendance and especially those in the hallway. Obviously, Mr. Runyon, there is a fantastic systemwide and nationwide interest in the restructuring that you are implementing right now.
Obviously, you are very, very new, but I sense there is a tremendous reservoir of good will, good feeling, and overall support for your goals and plans inside and outside the Postal Service. As has been said many times management ratios are too large and needs to be cut. But as you may know from the report of Mr. Coughlin on our postal subcommittee hearing about 2 weeks ago, literally every labor and management group associated with the Post Office-all these skilled and eloquent and exemplary people of good will-were saying, in effect, they had not been consulted. Some said that collective bargaining agreements are being ignored.
I understand the people at headquarters are concerned that, in essence, they are being forced to "voluntarily" relinquish Merit Systems Protection Board and veterans' appeal rights in the guise of being down-graded into another postal position.
I also do hope whatever happens can, as I stressed to Mr. Coughlin, be attained with no significant diminution in Service, particularly over the election and holiday seasons. As I said to Mike, I just don't know how you are going to do that, but as you can tell from the much more detailed and eloquent statements of my colleagues, there is a sense of real concern out there. And, as my staff reports, the phone is literally ringing off the hook. So we look forward to you being up front and forthright today.
Thank you, Mr. Chairman.
Chairman CLAY. Any other opening statements?
Mr. MCNULTY. Thank you, Mr. Chairman.
I'm happy to join the other members of the committee in welcoming the Postmaster General here this morning, and I will just simply reiterate what some of the other panel members have said. No one questions the goal of having a more efficient Postal Service, but many of us recognize and would remind you that we currently have the best, most efficient system on the face of the Earth, and we do question the speed with which you are moving on some of these reforms.
Particularly with regard to retirement, it occurs to me that most individuals, when they contemplate retirement, do that over a period of several years, not several weeks. I think that you are beginning to take into consideration the stress that that is causing among employees all across the country by virtue of the action that you took yesterday. But I would continue to caution you to be careful about moving too swiftly in that regard, especially if we are losing our best and most experienced people. Because we all know the impact that that could have on service, the negative impact it could have on service. That is something we all want to avoid.
I won't take up any more time-I know we are starting to be repetitious in expressing some of these concerns, but I think it is very, very important that you know the depth of the feeling that is out there all across the country among employees of the Postal Service, and I hope very sincerely that you will take that into consideration as you move forward with your program.
Thank you, Mr. Chairman.
Chairman CLAY. Are there any other opening statements?
Mr. SAWYER. Thank you, Mr. Chairman.
I associate myself with the remarks of my colleagues. Thanking you for holding this hearing. I also want to thank Postmaster General Runyon for his appearance before the committee today and simply say that I look forward to hearing about the pace and the scope of the restructuring and, like so many others, about the plans that you have, Mr. Postmaster General, to avoid serious delays in moving the mail and other potentially adverse effects on our dedicated postal workforce.
Thank you, Mr. Chairman.
Chairman CLAY. Mr. Kanjorski.
Mr. KANJORSKI. Thank you, Mr. Chairman.
I would ask unanimous consent to extend my statement for the record.
Chairman CLAY. Without objection.
[The prepared statement of Hon. Paul E. Kanjorski follows:]
PREPARED STATEMENT OF HON. PAUL E. KANJORSKI, A REPRESENTATIVE IN CONGRESS FROM THE State of PENNSYLVANIA
Mr. Chairman, I am pleased that you have asked Postmaster General Marvin Runyon to be here today to provide this committee with the opportunity to discuss the Postal Service's personnel reduction plan. While I recognize the need to reduce the Postal Service's large operational deficit, I believe the reduction-in-force plan ordered by Mr. Runyon was hastily conceived and may severely and unecessarily disrupt Postal Service operations. In this regard, I ask Mr. Runyon not implement a reduction plan until the Postal Service provides the Congress and the general public with a plan which specifically shows how much and where cost savings would be achieved, as well as how the agency will carry out established Federal Government reduction-in-force procedures.
It is my understanding that Mr. Runyon's reduction plan is not supported by any feasibility studies or economic analysis which is available to the Congress or the general public. I consider this method of operation to be a violation of the Postal Service's fiduciary responsibility to the taxpayers and just plain lacking in common sense. Most importantly, the deliberate decision to avoid using established Federal Government reduction-in-force procedures is insensitive and insulting to the tens of thousands of Postal Service employees, especially military veterans, who will be laid off or effectively forced into retirement over the next 2 months.
While the goal of reducing the Postal Service's deficit is commendable, Mr. Runyon's implementation plan is severely flawed. Because the plan is not based on a site-specific economic analysis of the relative costs of running individual Postal Service facilities, it is quite possible that efficient operations may be closed and, as a result, projected savings will never be realized. A case in point is Mr. Runyon's plan to virtually eliminate the Wilkes-Barre Postal Data Center (WBPDC), located in my congressional district, which has been consistently rated as being one the most efficient and productive facilities in the entire Postal Service.
The WBPDC currently employees approximately 140 staff members who perform various computer operations which enable the timely processing of over 400,000 Postal Service employee paychecks. In 1990 the Postal Service commissioned the the consulting firm, Nolan, Norton, & Co., to evaluate the operation of its six Data Operation Centers (DOC). The WBPDC was the only DOC to receive an "excellent" rating for "processing capacity." In addition to being highly productive, the WBPDC's efficiency is underscored by the fact that the facility employs far fewer employees than the other five DOCS.
Despite these considerations, the Postal Service targeted the WBPDC as the first PDC to undergo a significant reduction-in-force which will be in effect by mid-November of this year. I am strongly opposed to the reduction-in-force at the WBPDC because of the traumatic impact which this action will cause for many dedicated employees, many who are military service veterans or have worked for the Postal Service for more than 20 years. Moreover, I object to Mr. Runyon's reduction plan because the Postal Service has not provided me with any firm information detailing how this reduction will save money or improve service.
Mr. Runyon has indicated that he intends to run the Postal Service more like a business; however, his failure to undertake site-specific analysis of operations is contrary to the fundamental principles of sound business. As evidence of this, I would
like to point out that the General Motors Corp. recently announced that it needed to cut costs by trimming more than 70,000 employees from its workforce. However, before GM announced plans to close any specific plant, the company performed indepth analysis to ensure that they had evaluated all possible options.
How is it possible for the Postal Service to know if it is cost effective to close the WBPDC without a site-specific economic analysis? In fact, governmental operations similar to the WBPDC, such as the Eastern Regional Computing Operations Center for the Social Security Administration and the Eastern Regional Center for the Student Loan Marketing Association and similar private sector businesses in the Wilkes-Barre area are achieving close to a 25-percent higher productivity rate than any other operations in their network.
It is important to take notice of the fact that the Postal Service essentially has given the employees of the WBPDC affected by the reduction only 30 days to make decisions which will change the rest of their lives. While Mr. Runyon makes it sound like the Postal Service is providing WBPDC employees with the "option" to retire or move to another facility outside of Pennsylvania, the reality is that WBPDC employees have not been given all the information necessary to make a clear decision. It is outrageous that the Postal Service has provided WBPDC employees with so few specific details on how they will fare under the reduction plan.
To date, the Postal Service has not officially notified WBPDC employees about what their new job responsibilities would be or when they would have to move if they participate in Mr. Runyon's reduction plan. Essentially, the Postal Service is telling WBPDC employees to take retirement now or take your chances later. Of course, retirement is not a possibility for all of the affected WBPDC employees, and it is not clear whether they will have any jobs in a Postal Service run by Mr. Runyon. Given that the ongoing recession has hit Wilkes-Barre particularly hard, the loss of jobs at the WBPDC could not come at a worse time.
By neglecting to consider the impact of Mr. Runyon's reduction plan on the WBPDC employees, the Postal Service has made a serious mistake. I find it very troubling that the Postal Service is apparently indifferent to the standard of living which its employees maintain. Considering that the average household income of Minneapolis/St. Paul is $37,580 compared to $28,095 in the greater Wilkes-Barre area, WBPDC employees moving to Minneapolis will certainly not be able to enjoy the same standard of living.
Aside from the devastating impact on the WBPDC employees and the economy in Wilkes-Barre, Mr. Runyon's reduction plan will cause the timely processing of paychecks for over 400,000 Postal Service employees to be placed at risk. According to Mr. Runyon's plan, the WBPDC's work will be transferred to the Minneapolis PDC by mid-November. I have been informed that neither the Minneapolis PDC nor any other PDC presently has the capacity to handle the work being done by the WBPDC. I have been told that the Postal Service will have to purchase a new mainframe computer, which could cost more than $10 million as well as leasing additional office space, to enable the Minneapolis PDC to take on the operations of the WBPDC.
If these improvements are necessary, I do not understand the Postal Service's logic for spending millions of dollars to give the Minneapolis PDC the capacity which is currently available at the WBPDC. The only possible cost savings that the Postal Service could achieve under Mr. Runyon's reduction plan for the WBPDC is in labor costs. Yet, considering the Postal Service must guarantee the union WBPDC employees the same salary for jobs at the Minneapolis PDC if they choose to move, this savings will be modest at best.
Labor cost savings may be further reduced by the Postal Service's obligations to pay for moving and some housing costs of WBPDC employees transferring to Minneapolis. In addition, I believe the Postal Service has also failed to evaluate intangible costs associated with the WBPDC reduction such as worker morale at the facility and the effect which job loss stress will have on the health and productivity of employees. One of the affected WBPDC employees recently had a heart attack while at work. Furthermore, in a year when many executive branch officials have spoken so much about "family values," I find it astounding that the Postal Service would be so indifferent to the WBPDC employees, many of whom are the main source of income for their family.
Mr. Chairman, let me assure you and other members of this committee that I stand ready to endorse a plan which reduces the Postal Service's operational deficit, as long as that plan is based on sound reason, guarantees that Postal Service operations will not be disrupted, and treats affected Postal Service employees fairly. I must emphasize that I oppose Mr. Runyon's present plan because it fails to satisfy these standards.
I believe the Postal Service must immediately put Mr. Runyon's reduction plan on hold and evaluate the cost effectiveness of upgrading the WBPDC. For years, Postal Service officials told me that the WBPDC was one of its most efficient and productive facilities in the entire agency. If given a chance, I am confident that the employees of the WBPDC will be able to develop a plan which retains payroll processing operations in Wilkes-Barre while reducing costs. Considering the WBPDC_employee's dedication to serving the American people, the Postal Service owes them the opportunity to demonstrate once again their long-term value to the agency. Chairman CLAY. Mr. Ackerman.
Mr. ACKERMAN. Mr. Chairman, I would like to ask unanimous consent to put my statement in the record as well and, in addition, ask that today's record be kept open because there are other members, who would like submit questions, who are not here.
Chairman CLAY. That will be done.
Mr. ACKERMAN. Thank you, Mr. Chairman.
[The prepared statement of Hon. Gary L. Ackerman follows:]
PREPARED Statement of HoN. GARY L. ACKERMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK
Today the Post Office and Civil Service Committee will hear from Postmaster General Runyon regarding his plans to restructure the Postal Service.
I know that the Postmaster General has earned a reputation as an individual who reduces the size of entities during his watch. While I do not necessarily oppose the philosophy of intelligently trimming the size of Government, I am troubled at the speed by which the Postmaster General is attempting to reduce the size of the Postal Service. I also fear that the Postmaster General does not fully comprehend the effect that his reorganization will have on the Service's operation and on worker morale. Furthermore, I am concerned that Mr. Runyon's plan is a thinly veiled "reduction-in-force", under the guise of reorganization. Many believe that, by calling the reduction-in-force a “reorganization", the Postmaster General is attempting to circumvent established RIF procedures and thereby ignore the "retention and bumping" rights of postal employees, as well as the veterans' preference rules for postal employees who have faithfully served their country in times of war.
In addition, according to many postal workers and customers, the planned restructuring of the Service would result in the separation of thousands of loyal and hardworking postal workers, and will wreak havoc on the Postal Service's ability to process and deliver the mail-especially during the high-volume Christmas mailing
I am also distressed by the Postmaster General's decision to close the Postal Data Center in New York City. Later, I intend to request that the Postmaster General explain the rationale for the decision to close the facility, and ask that he share with the committee any cost analysis that was conducted relating to the closure, as well as clarify what employment opportunities will be available for displaced employees.
Thank you Mr. Chairman.
[The prepared statement of Hon. Eleanor Holmes Norton follows:]
PREPARED STATEMENT OF HON. ELEANOR HOLMES NORTON, a RepresentaTIVE IN CONGRESS FROM THE DISTRICT OF COLUMBIA
I would like to welcome Postmaster General Marvin Runyon to today's hearing. The initiatives that he has begun have provoked both hope and fear in the postal community and among some others who have followed the operations of the U.S. Postal Service in recent years. His unusual and decisive beginning merits the attention of this committee both for the benefits that are possible and for errors that may be avoided.
I particularly look forward to hearing from Postmaster General Runyon today concerning his future plans and concerning his rationale and explanation for what he has already proceeded to do.