The USPS Board of Governors has approved a fiscal 2007 financial plan that aims to cut $1.1 billion in costs partly by cutting 40 million work-hours from fiscal 2006 levels.
USPS said additional savings would come from automation improvements and the implementation of “breakthrough productivity” initiatives.
Beginning October 1, the plan — which does not take into account the effects of possible postal reform legislation — calls for 3.2 percent increase in revenue and a 2.6 percent increase in expenses over the 2006 forecast, which would result in $1.7 billion in net income were it not for the over $3 billion escrow payment the service owes on September 30 that will place it $1.6 billion in the red.
The plan assumes slower economic growth nationally as well as the implementation of postage rate increases in May 2007.
“There is a potential for more risk in the achievement of this plan compared to recent years,” said H. Glen Walker, USPS’s chief financial officer and executive VP.
“The pending rate case, the current labor negotiations with our four largest unions, and uncertainties with the economy–including fuel prices–all have the potential to affect actual revenue and expense figures,” he said.
