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Our next guest says the Postal Service was generate twenty billion dollars and cost reductions and revenue generation.
-- 2016 to return to financial stability.
The first step toward that goal in the news now mail delivery on Saturday to plan that could cut two billion dollars a year out of the expenses.
Joining us now -- a man has got to get all that done he -- the US postmaster general Patrick Donahoe.
Good to have you with us.
-- that cash first let's start with sequestration.
They're gonna have much of an affect on you you you don't have enough problems I was thinking maybe you could use a few more.
That's for fortunately.
That's one thing we don't -- or about but you're right we have enough other issues were -- But let's take a look at just some of those issues further and further artists and home so they understand you know we all -- every American is connected to the -- sorts.
The depth of the problems.
That you face and are trying to resolve.
Our are immense and profound what let's take a worker -- to -- that full screen just taking a look at.
Losing sixteen billion dollars.
Last year losing -- five million dollars every day.
The bulk of those losses due to the man to Terry mandatory cost for future retiree health benefits.
You've got a 2006 law that forces you to pay about five and a half billion -- future retiree.
This is this is a tough tough situation.
But let's go to the first.
The first question has to be are you going to be able to make it here.
There is the Postal Service gonna survive.
Yes we are -- We have a plan it's.
Rather complex as far as things we have to do.
But everything is doable -- between cost reductions and revenue improvements.
We can get back on good firm financial footing.
Indeed in good shape not only for the short term for for the long term the major issues you pointed out as health care we have to pre fund retiree health care three to five point five billion dollars a year.
And we've default on those payments we missed the last two and that's part of the sixteen billion dollar shortfall last year.
Now when you say -- fall forgotten that money backed up by the treasury right.
That's money that we go to the treasurer we we could not write that checks that we've.
What's happened doing the Postal Service so since 2006 while the -- was passed.
A couple things first of all we we have the five point five billion dollar payment back in 2006 we are pretty good shape financially.
But with the recession and with select electronic -- people paying bills on line.
We've lost about 27% or mail volume between 2008.
And today also.
And then they hit and that's a big -- to but it also is it is many of your critics say.
It's also pretty strong sign that you've got old ball.
And perhaps it's time to consider the possibility that the postal services we know what is just simply too expensive.
To sustain because times have changed email.
The various forms of communication that have so far outstripped.
A if you -- Snail mail.
Well here here's what we know from a revenue perspective first of all.
The last -- -- four years our revenue has wants the big drop after the recession we've leveled off about 65 billion dollars to work.
We are a big organization and as part of an.
Billion dollar industry postal industry is gigantic industry -- so we have seen.
That's stabilization there's three areas that were that we know -- -- we will have good revenues going into the future package business.
We've been growing at double digit.
Advertising mail -- back growing again competes with the Internet with TV but -- growing.
At first class what we -- Commercial that's statements and bills that come to your house.
That's been pretty good where we've really suffered has been a substantial losses stamped mail the people pay bills sure -- -- -- mail box.
And that's what's driving a lot of the issues around the infrastructure changes we've got to make that's what's really driving.
The change was 65 day but when we -- solution.
It will uncharted -- but -- wouldn't look at your competition.
But we're looking at that five and a half billion dollars you got a pre -- on their retiree benefits you've got to per theater you've got to.
-- -- you're not even coming close to meeting this your competition in terms of what -- paying.
Whether -- health care rather be retirement.
How can you possibly.
Continue in this -- in why in the world should the American taxpayer be supporting.
That kind of extraordinary in excess of.
-- are competitive burden.
Well let me walk through first of -- we take attacks continue to run maturities and a walker -- -- -- purpose of -- -- real quick.
Health care taking our own health care over we've got a million people in the plans if we repealed blew away from the federal government.
We think that is worth a change of European -- by seven billion dollars we might eliminate the pre funding.
And save about a billion and a half and cost six -- five day is worth two billion.
Shrinking our networks where process is doing that is is worth another 45 billion plus labor costs we've been able to squeeze out.
We have a plan we get us back we can get the full service back on good -- financial footing.
I need some legislative help from congress some of these -- to do -- -- -- -- mr.
postmaster general we thank you for being with -- no one in -- the management and leadership challenge you face.
It's a tough and we all understand that are you actually gonna close those post office delivers on Saturday.
You know we're gonna move -- a Saturday we've made some changes there in terms of delivering packages on Saturday.
Mail Monday through Friday post offices will be open.
And we think it's a win win for the American public are.
-- Donald thanks for being with -- -- thank you.
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