Summary: GAO discussed the U.S. Postal Service's (USPS) financial performance. GAO noted that: (1) USPS failed to accomplish anticipated work-force reductions in 1989, experiencing an overrun of 38,000 work years, mostly in mail processing operations, costing about $1.3 billion; (2) USPS projected a net loss of $1.4 billion to $1.6 billion for 1990, although its controls over work-force size slowed cost growth and improved financial performance; (3) to offset the postal rate increase it requested for early 1991, USPS planned to hold average yearly cost increases to 1 percent below inflation through 1995; (4) low productivity and growth in labor costs presented major obstacles to achieving USPS financial improvement goals; and (5) USPS improved labor relations, real estate acquisition procedures, and other service and administrative operations in response to several GAO reports identifying problems in those areas. GAO believes that the outcome of USPS 1990 labor negotiations and its requested rate changes will be critical for determining whether USPS can remain competitive with other forms of information transmission.
