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Let's stop this is finding it harder and harder to deliver just the other day the agency defaulted on a five point six billion dollar payment for future retiree health benefits and make matters worse this is the second time in a year it's defaulted on the benefits.
Bringing the total to a staggering eleven point one billion dollars.
So -- take to -- the US Postal Service joining me now in the Fox Business exclusive is Patrick Donahoe the postmaster general.
Patrick it is great to see you again and as you know.
Really kidding about this I mean I see -- post office as a great business that could be right sized I mean you need like a good work -- person to come in and I think you're -- the got the congress want and we issued a -- it.
My plan -- before stick step way to Milwaukee -- you tell me I'm crazy -- this would work.
Number one I want to focus on what make what is making money.
You got a lot of really good stuff that people like I mean there -- be you have four weddings stamps that -- like a billion dollars you did send them.
Baseball player stamps that -- total blowout I'm not a baseball aficionado but apparently they were fantastic.
I love priority mail I use that all the time I print out the labels you've got some good stuff right can you focus on those businesses and then cut some of the stop.
That's not working like regular mail what do you thick book.
Well here's here's here's here's the plan we have a five year business plan and some -- things you talked about are exactly some things we should be focusing on first up.
We have legislation pending in congress the major driver for our whole financial issue is what you -- talked about.
Pre funding retiree health benefits.
We don't disagree that we should do it it's -- responsible thing to do.
But we wanna spread the payments I'll make -- much more reasonable we've -- -- funded 45 billion dollars and so what we're what we'd like to do.
The -- the language is written up already at a senate bill just passed.
Change the projections on that amortization schedules and make it much more affordable quick.
But let me let me put it is involved in delivery of mail -- and I want to get -- -- is that because I love what you're saying is I don't wanna miss any good points let's start with the pre funding.
If you have to spread out the payments like that doesn't just mean that the benefits are too rich and that this isn't really a modern system and that maybe everybody has -- Look back at the promises that have been made and say he listen this is not a business that's big enough to support this and you have to make some tough decisions about.
What the benefits are really gonna be going forward it's not about what do you find it and when you make the payments it's about it's too expensive -- can afford it.
Well the benefits that we have this federal employees or benefits that extend across the entire federal -- schedule.
So if congress and the president decide to changes of course yeah we're gonna make those changes.
I have to deal with the laws of this now and the -- says that we have a still have to find a certain amount.
For retirements and four for a retiree health benefits were fully funded on -- congressman fact were over funded by eleven billion dollars and one of our accounts.
And what we're trying to do his fund -- retiree health benefits promises to your point that were made to people and that's part of what we're looking to do with law change.
Well I mean you have to cut labor cost somehow and in fact that's point three in my plant 80%.
But your cost is labor I mean I think you've got to eliminate something like a 100000 people are you going to be able to do that.
We and then the year 2000 we have 800000 people so they we have 528000.
So we Lori reduce headcount.
By about 35000.
People and we've done -- through attrition and we've done it.
Maintaining the infrastructure same number of post offices five days is delivered our people are much more productive than they were today our goal is to get to about 400000.
He gets for -- thousand that's what's that's -- five day delivery.
That pulls the costs now make profitable and it helps us to control long term liabilities.
Finally I think that you sort of have to modernize the original mission of the post office I mean the idea.
Was that you could -- a stamp and for the same price and deliver -- piece of paper.
Everywhere within a reasonable amount of time.
-- just can't do back like that's just not a profitable business and look at FedEx and UPS making all kinds of money.
You have great products he can't really do snail mail that there -- to some sort of compromise.
Either people have to go to one spot their town to get -- they can't expect home delivery we have to close post offices I mean.
You have to really say.
When we can't abide by this original mission what do you think.
We are we -- a 65 billion dollar organization.
Inside an 800 billion dollar industry 35%.
-- all paper ends up in the mail -- a gigantic ensure.
-- -- -- -- the oil and gas industry in this United States so it's not something that's gonna go away and it's -- has a big effect on the economy.
Clutter clearing up these mandates.
For pre funding six day delivery of mail we've I want to deliver package last days.
Down twenty to 26%.
Depending on which stocks are looking at since 2006 and although studies say we saw the same drop.
During the depression that you expected it to come back this time we don't expected to come back as people and using email electronic billing.
All his other things that it it's not gonna come back you have to change your business.
This docile we've already taken this costs -- The big cost or writing a check for five and a half billion dollars for funding retiree health benefits.
And two point seven billion dollars for for the six day of delivery.
That -- -- little product freedom we -- -- PNL ten billion dollars we can become profitable.
Thank you so much for coming on you know this is the topic that I love I might come -- summer intern he better be careful.
We're looking forward -- that I publicity.
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