Postal Service: Restructuring, Automation and Ratemaking

GAO reviewed the U.S. Postal Service's (USPS): (1) recent restructuring; (2) efforts to automate mail processing; and (3) need to reform ratemaking policies and processes. GAO noted that: (1) USPS restructuring did not adversely affect service to customers; (2) factors that contributed to USPS ability to maintain service included increased monitoring of mail operations, strong employee response to processing and delivery demands during the holiday season, and the use of non-career employees to replace career employees who retired during restructuring; (3) USPS took several steps to ensure the timely reduction of the work force and minimize the adverse effects on postal employees which included an early-out option, monetary incentives, a policy to indefinitely retain employees taking lower-paying non-union jobs in USPS at their current grade and pay, and job placement assistance within and outside USPS; (4) in early March 1993, USPS had 4,000 employees who had left overhead positions that it did not place in other positions; (5) although restructuring cost USPS $1 billion, it expects to save $800 million in 1993 and $1.4 billion annually beginning in 1994; (6) in 1991, work hours decreased in work functions most directly affected by automation; (7) the reduction in work hours did not have a significant effect on overall postal costs; and (8) the USPS ratemaking process adversely affected its ability to serve the public and compete in a changing competitive environment.