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POSTAL SERVICE Would plan affect Valley?



Published: Tue, April 9, 2002 @ 12:00 a.m.



The Postal Service is looking to cut $5 billion in costs over the next five years.

THE VINDICATOR, YOUNGSTOWN

By DON SHILLING

VINDICATOR BUSINESS EDITOR

YOUNGSTOWN -- The United States Postal Service has proposed a plan to cut costs and consolidate offices, but it's too early to say how the plan will affect area operations, a local official said.

The plan, which was announced Friday by the postmaster general, must be approved by Congress.

Mike Elias, customer service coordinator at the Youngstown post office, said the local effects of the plan aren't certain, but it is designed to make the post office operate more like a business.

The plan would convert the post office to a commercial government enterprise, similar to Fannie Mae mortgage financing company, which operates under a federal charter.

The Postal Service would have more freedom to offer new products, negotiate prices with large mailers and make flexible purchasing arrangements.

It now operates under the Postal Reorganization Act of 1970, which requires operations to break even financially and postal rate changes to go through a complex approval system.

What would change: The proposed plan would allow the Postal Service to set rates more predictably, retain earnings, work under private sector labor laws and perhaps pay either taxes or dividends to the government.

The Postal Service said it needs structural changes because of declining mail volume and the changing nature of communications.

The plan also would cut costs by $5 billion over the next five years through job attrition, outsourcing, closing offices and other measures.

The Postal Service has cut 30,000 jobs and $2.5 billion in costs over the past two years.

The agency said it intends to close some of its 400 processing centers that it operates across the country.

Locally: Elias said employment in the Youngstown area has remained steady. The downtown office and its branches in the city, Boardman, Austintown and Poland employ about 700 people.

In announcing the plan, the postmaster also lifted a moratorium on closing offices, which has been in effect for four years.

Elias said lifting the moratorium won't affect Mahoning Valley offices because of their size. Under review for possible closings are one-person offices, primarily in the West, he said.

Area operations fall under the Postal Service's Akron district.

Jordan Small, Postal Service district manager, said the new operations plan would give the district the flexibility to keep costs down and better serve customers.

shilling@vindy.com




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