Royal Mail Flap Could Serve as Lesson for USPS

Early results from the latest efforts to privatize Royal Mail, the U.K.’s money-losing post office, may prove a cautionary tale to anyone stateside who’s got any similar ideas.

Earlier this month, the Royal Mail Corp said it would begin offering stock shares to the public in a few weeks. So far, the idea is not going over too big in certain areas of British society. Those include small investors whose backing may be necessary to make privatization work http://www.theguarissuesdian.com/uk-news/2013/sep/18/royal-mail-privatisation-small-investors.

After all, Royal Mail must try to sell to everybody, not just to the super-rich.

Not to mention an all- but-certain strike by the Communication Workers Union, the main labor organization of postal employees. As of Sept. 20, the union was warning Royal Mail of its intentions http://www.cwu.org/news/archive/cwu-serves-notice-for-royal-mail-strike-ballot.html.

The arguments against privatization in the U.K. are quite similar to those in this country such as protection  of rural post offices ,job security and a likely subsequent degradation and decline in service after it goes private, according to the  Communication  Workers Union, the main lab\or organization of postal employees http://www.cwu.org/news/archive/57800/parliament-demands-concrete-protections-for-mail.html.

Of course there are accusations flying around that a for-profit Royal Mail is gonna be way more interested in paying  dividends to its shareholders than in providing efficient low-cost delivery to the nation.

About five years ago, Royal Mail—with backing from some members of the House of Lords– made gestures toward trying to go private, partly to offset a more than $10 billion deficit.

Ideas floated at the time included selling stakes to the Dutch postal corporation TNT or other foreign “partners” whose potential investments could help out Royal Mail financially. This threat still exists, according to Express.com http://www.express.co.uk/news/uk/428884/EXCLUSIVE-Royal-Mail-WILL-be-allowed-to-fall-into-foreign-hands-Government-confirms

Those earlier privatization initiatives ultimately went nowhere largely because of opposition from the CWU and the Labor party.

Nevertheless, Royal Mail was undeterred in its efforts to go private. For this purpose it hired Moya Greene\, former CEO of Canada Post as the new chief executive. One of her prior feats was to spearhead efforts to privatize CN, the Canadian National Railway around 2005.

Today on you can see her offering empty corporate rhetoric about how the post office is for the people and so forth. She’s also saying the impending strike against Royal Mail “makes no sense.”

Certainly not for her and her cronies who wouldn’t be able to loot Royal Mail with impunity if nobody stood up to her.

What might this all portend for the U.S. Postal Service and its out-of-control deficits?

They get more and more dire with every passing minute and keep falling on deaf ears in Congress despite pleadings from Postmaster General Pat Donahoe and others http://about.usps.com/news/national-releases/2013/pr13_072.htm.

Don’t think for a nanosecond that the domestic postal pro-privatization forces aren’t watching the unfolding Royal Mail story very, very closely.

Already, reports have cropped up that some U.S. pension funds are interested in investing in a profit-driven Royal Mail.

An open question is whether the American Postal Workers Union, National Letter Carriers and other unions would follow the CWU’s lead if the USPS ever came as close to going private.

.

Advertisements
This entry was posted in Congress, postal finances, U.S. Postal Service and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s