Postal plant consolidations start next month

Postal Service closures to consolidate processing plants will begin as scheduled after a union's last-minute appeal to regulators failed.

WASHINGTON (CNNMoney) -- The U.S. Postal Service will begin consolidating and closing parts of some 48 mail processing plants, beginning as early as next week, after a last-minute effort to halt the consolidations failed Friday.

The American Postal Workers Union (APWU) had asked the service's regulator, the Postal Regulatory Commission to halt the consolidations while it appealed a plan to shrink its network and work force, and slow down the delivery of mail most consumers use.

But the postal regulator decided not to step in, saying that the potential harm to the Postal Service from halting consolidations "outweighs" the potential harm to the union, according to the Postal Regulatory Commission.

The Postal Service plans to move forward with consolidations over the next two months, said spokesman David Partenheimer. Those consolidations will affect 5,000 employees, many of whom would be offered new jobs that might require them to move or retirement packages.

"We are pleased with today's ruling by the Postal Regulatory Commission," Partenheimer said. He said an "important part" of the postal service's plan for financial stability requires "consolidation of our current mail processing network to better match our existing and projected mail volumes."

A request for comment made to the APWU was not immediately returned.

To consumers sending mail, the news means that as early as next week, some mail -- the kind that originates and is destined for the same geographic area and is served by one mail facility -- may no longer get to its destination overnight, said Steven Hutkins, a New York University literature professor and author of the blog Save the Post Office.

The Postal Service continues to face major financial turmoil. It reported a $5.1 billion loss last year, blaming the recession, declining mail volume and a the congressional mandate to prefund retirement health care benefits for future retirees.

In addition to the plant closures, which will ultimately slow the delivery of the first-class mail that most Americans use, the Postal Service is trimming staff. It offered buyouts and retirement packages to 21,000 postmasters as well as 45,000 mail handlers who sort and transport mail.

The health care mandate is a major liability for the Postal Service. Officials have said they won't have the cash to make a $5.5 billion payment that's due Aug. 1, or the $5.6 billion payment due Sept. 30. 

Source & Image : CNN Money