Trump Proposes Cutting Postal Employees’ Pay, Benefits in $100B Savings Package

April 13, 2018 16 Comments
A USPS letter carrier makes the rounds in Washington in 2018. A USPS letter carrier makes the rounds in Washington in 2018. Alex Brandon/AP

President Trump has once again proposed a slew of changes to the operations of the U.S. Postal Service and its employees’ benefits, with the White House estimating the plan would save $98 billion over the next decade.

In addition to a renewed push for offering postal employees lower pay and benefits, Trump pushed changes proposed by the task force he created last year. Those include raising prices for mail and packages not deemed “essential,” reducing delivery frequency, outsourcing some mail processing and licensing access to individuals’ mailboxes.

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Additional savings would result from governmentwide efforts to require federal employees to contribute more toward their pensions and health insurance benefits. Trump also suggested making specific changes to USPS employee compensation to align it more closely align with the rest of the federal workforce. His task force previously proposed eliminating pay and benefit issues from collective bargaining negotiations, as is the case for all non-postal unions representing federal employees.

Many of the task force’s proposed reforms were met with criticism from lawmakers and postal management just last week at a hearing before the Senate Homeland Security and Governmental Affairs Committee. David Williams, for example, one of only two members sitting in the nine Senate-confirmed slots on the Postal Service’s board of governors, accused Trump’s task force of doing the bidding of the agency’s competitors through “discredited economic theory.”

“Private shipping companies find value in using cost attribution models to weed out unprofitable customers,” Williams said. “In contrast, we deliver to each American doorway.”

Trump’s previous budgets largely mirrored legislative proposals to put USPS on firmer financial footing, in addition to the compensation cuts. The fiscal 2020 document called for the Postal Service to re-amortize its outstanding liabilities for future retirees’ health care. The administration has rejected a popular proposal in Congress to require all eligible retirees to use Medicare as their primary health insurance provider.

While the White House said in budget documents that its proposed reforms mirrored the recommendations from the task force Trump created by executive order last year, not everything aligned. The document broke with testimony Gary Grippo, a Treasury Department official who spearheaded the task force, delivered last week. Grippo said the Postal Service should not take on any new business unrelated to its “core competencies,” while the budget suggested USPS provide additional services at post offices.

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Robot mail delivery trucks developed in Detroit ready for China, US

Mark Phelan
a yellow and black truck sitting on top of a building© Provided by Gannett Co., Inc.Looking like a delegation of toasters from space, a generation of electrically powered, self-driving mail trucks will roll out of a suburban Detroit industrial park later this year. Their mission: revolutionize mail and package delivery.

About 2,000 of the boxy, shiny Quadrobot U1 four-wheel-drive, four-wheel-steer delivery vans will begin service with the Chinese postal service late this year delivering packages in cities along the populous South Coast.

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The startup company aims to have another 30 in trial service delivering goods in downtown Detroit and suburban downtowns including Birmingham and Royal Oak. Quadrobot CEO and chairman Mike Wang outlined the plans during an interview in the modest Madison Heights building where the company he founded will begin assembling Quadrobots for U.S. service later this year.

A native of Hangzhou, China, Wang came to Detroit to study automotive design at the College for Creative Studies, one of the world’s top schools for auto and industrial design.

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Detroit’s ‘brand value’

“I was skeptical at first, but I’m all in,” said John Manoogian, a longtime auto industry executive and adjunct professor of auto design at CCS. Manoogian met Wang as a CCS student. He’s now a Quadrobot investor and a board member. Quadrobot is based in the Detroit area and funded by investors in the United States and China.

“Mike showed me his prototype and I realized it was a totally unique vision,” Manoogian said. “The car business is undergoing dramatic change. This has the opportunity to make a big difference.”

Most of the U1’s engineering and all its design took place in southeast Michigan. The U1 has 35 kilowatts of power, about 47 horsepower. That’s enough for a neighborhood delivery vehicle, but 350-kw power is in development for bigger vehicles that could go farther and faster. Wang worked with local engineers to develop the vehicles.

“Detroit has the best reputation in the world for automotive engineering and design,” said Wang, 32, who worked in design and brand strategy at Fiat Chrysler after graduating from CCS.

Mike Tianye Wang, CEO and Board Chairman of Quadrobot, stands in a warehouse where the "UP" package delivery truck is housed in Madison Heights, Mich. photographed on Thursday, Feb. 5, 2019.© Kimberly P. Mitchell, Detroit Free Press Mike Tianye Wang, CEO and Board Chairman of Quadrobot, stands in a warehouse where the “UP” package delivery truck is housed in Madison Heights, Mich. photographed on Thursday, Feb. 5, 2019. “We wanted the U1 to look like a Detroit vehicle,” Wang said. “There’s a lot of brand value in the city of Detroit.”

‘Last mile’ delivery

The U1 is what’s called a “last mile” vehicle, designed to handle delivery in neighborhoods and downtowns. The best comparison is the mail truck your postal carrier uses, but smaller, with electric power and varying amounts of self-driving ability. It’s not a substitute for highway and intercity delivery vehicles, but rather for delivery from local businesses — and in China, the local post office.

“Last-mile solutions are particularly critical for urban areas, where traffic congestion makes this type of service increasingly time- and labor-intensive,” said Bill Visnic, editorial director of the Society of Automotive Engineers’ Autonomous Vehicle Engineering magazine.

“Last-mile service is expected to be a viable early laboratory for automated vehicles because these trips often will be on defined and easily mapped routes. There’s also potential for increased efficiency from autonomous delivery and ride-hailing, which at least in theory might help to reduce congestion.”

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Quadrobot's Urban Parcel model is connected to the internet and stands in a warehouse in Madison Heights, Mich. photographed on Thursday, Feb. 5, 2019.© Kimberly P. Mitchell, Detroit Free Press Quadrobot’s Urban Parcel model is connected to the internet and stands in a warehouse in Madison Heights, Mich. photographed on Thursday, Feb. 5, 2019. The U1 has a windshield, driver’s seat and controls. At least the first couple of thousand will be driver-operated as Quadrobot gathers data about how they’re used.  An autonomous system will oversee the driver, braking if the U1 enters a turn too fast and steering if the driver makes a wrong turn.

‘Like a pet’

A human attendant will handle package pickup and delivery, but the U1 will be able to autonomously trail its operator down a street or around a parking lot while the person delivers multiple packages.

“It’s like a pet following you,” Wang said.

Delivery will be easier to automate in China, where standardized lockers have replaced individual mailboxes. Wang also foresees using the U1 as a mobile locker for people to drop off objects for pickup. It could also house vending machines, including food that’s freshly cooked and positioned around town or in neighborhoods for easy meal pickup at the end of the day.

a close up of a car: Quadrobot's Urban Parcel model has a passive body that is separate from the propulsion/suspension chassis photographed on Thursday, Feb. 5, 2019.© Kimberly P. Mitchell, Detroit Free Press Quadrobot’s Urban Parcel model has a passive body that is separate from the propulsion/suspension chassis photographed on Thursday, Feb. 5, 2019. Wang foresees some of those stationary uses taking place while the U1 charges its lithium-ion batteries. Quadrobot is working with a supplier on a fast-charge 300-volt system that could deliver a full charge for a 12-hour delivery shift in 40 minutes or so.

Wang worked on the design and brand strategy of the SRT Viper at FCA after graduating from CCS in 2012. He spent a lot of time at FCA’s low-volume Conner Avenue assembly plant in Detroit. That work influenced U1 development, because FCA relied on suppliers to assemble many of the sports car’s modules, the same system Quadrobot uses.

Hiring begins in 2nd quarter

The U1 is modular. The running gear, batteries, electric motors, steering, etc. are packaged in a lower portion that resembles a mattress with wheels. Suppliers will ship those modules to Quadrobot facilities for assembly and attachment to bodies for cargo, vending machines, etc. The modules and body are put together with bolts and glue, making assembly inexpensive and low-cost.

Three assembly facilities in China will employ about 200 people, Wang said. The one planned for Madison Heights should need about 50 by the end of the year. He expects to begin hiring late in the second quarter. The company will hold a job fair. You can get information at  www.4-bot.com and info@4-bot.com.

The flexible platform lends itself to making other electric vehicles, including a possible SUV, Wang said. He’s working with the Michigan Economic Development Corp and Detroit Economic Growth Corp. on local development and employment.

Contact Mark Phelan at 313-222-6731 ormmphelan@freepress.com. Follow him on Twitter @mark_phelan. Read more on autos and sign up for our autos newsletter.

This article originally appeared on Detroit Free Press: Robot mail delivery trucks developed in Detroit ready for China, US

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Why the US Postal Service is never affected by government shutdowns

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A US Postal worker delivers Amazon boxes outside of the New York Stock Exchange. The USPS is not affected by the government shutdown.
Spencer Platt/Getty Images

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  • The partial government shutdown is now in day 32.
  • While many services are closed during the shutdown, the US Postal Service is still fully functional.
  • This is because the USPS has been self-sustaining since 1982 and receives almost no congressionally appropriated funding.
  • The shutdown only affects congressional funding that is approved annually, so self-sustaining operations like the Postal Service are spared.

Neither snow nor rain nor heat nor government shutdown can slow down the US Postal Service, as the ongoing fight between President Donald Trump and Democrats has done nothing to disrupt the flow of mail around the country.

In fact, due to the unique structure of the USPS, government shutdowns never touch the mail delivery service.

Since the funding lapses that cause shutdowns only apply to annually-appropriated funding, permanently funded services or services funded through user fees are not affected by the shutdown. So self-sustaining programs, like the Postal Service or passport issuance, or permanently-funded programs, like Social Security, do not get caught up in the budget battle.

The USPS generates most of its own funding through the roughly $70 billion in operating revenue taken in each year from the sale of stamps, cost of shipping, and other operations.

“As an ‘independent establishment of the Executive Branch of the Government of the United States,’ we receive no tax dollars for ongoing operations and have not received an appropriation for operational costs since 1982,” the USPS said in its annual financial filing. “We fund our operations chiefly through cash generated from operations and by borrowing from the Federal Financing Bank (‘FFB’), a government-owned corporation under the general supervision of the Secretary of the Treasury.”

The Postal Service became fully independent in 1971 and drew some congressional funding until 1982, when the USPS was totally weaned off of taxpayer money.

There are also some technical issues related to the way the USPS is treated in the budgeting process, but for the most part the USPS is self-sustaining and not subject to congressional funding squabbles. And while the service has faced some financial issues in recent years, many of those problems were caused by the USPS’s inability to raise prices to stay competitive with the private sector, not the lack of taxpayer money.

The only consistent appropriation given to the USPS by Congress is reimbursement for low-cost postage that is given to the blind and for overseas absentee ballots.

While the USPS is spared, there are still wide-ranging effects from the shutdown as it drags into a second month. From airports to food programs to 800,000 unpaid federal workers the shutdown is starting to get real.

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