The beleaguered Postal Service, the nation's largest semi-independent corporation, named Anthony M. Frank yesterday as its 69th postmaster general.
Frank, 56, is chief executive officer of First Nationwide Bank, a Ford Motor Co.-owned savings and loan with the highest credit ranking in a troubled industry.
"I am honored to be selected; I believe this is a position I can fill, and I would like to pay back this country for what it gave my family when we arrived as refugees from Nazi Germany in 1937," Frank said.
On March 1, Frank will take over a Postal Service on the eve of a rate increase and service cutbacks. He will walk into a battle over control of the post office system that has been raging underground in Washington for three months. He will face fights over postal revenues as well as power over the $32.2 billion annual operation that reaches into every home and office in America.
Over the past five years, the Postal Service has grown larger than General Motors Corp. by adding about 150,000 workers -- more employees than most companies' total payroll. Last year it handled 153.9 billion pieces of mail.
"To its critics," said Budget Director James C. Miller III, perhaps its most prominent one, "the Postal Service is more a monstrosity than a masterpiece" -- overstaffed, overpriced and inefficient.
One of Miller's aides told Congress last year how the post office could save millions -- eliminate 30 percent of door-to-door deliveries in favor of curbside or neighborhood boxes and shift retail service to department and convenience stores, for example.
"Sears is interested," said Office of Management and Budget Associate director Carol Crawford in what she says is an illustration of how savings could be achieved.
Postal officials blame Miller for slashing $510 million from the postal budget this year to help reduce the federal deficit. The cuts prompted the Postal Service to announce plans to close one afternoon a week and delay sorting mail on Sundays.
Miller says Congress made the cuts and he was a mere "scorekeeper" to ensure real reductions occurred. But the postal unions are not persuaded. Miller "may be thinking he is King George III, and he ought to look what happened to him," said Moe Biller, president of the 355,000-member American Postal Workers Union.
"The economic elite can afford to avoid the post office," said consumer activist Ralph Nader. "But the Postal Service is choosing to inure the public to cutbacks, making people think that to get first-class service you need to pay $8 for express mail, not 25 cents."
The immediate issue is whether the Postal Service should be removed from the federal budget so that it would be immune from future efforts to reduce the deficit -- and Miller's clutches, in the eyes of the postal unions.
Taking the Postal Service off budget is as "phony as phony can be," said Miller, because it is an integral part of the federal government. "Why don't we pass a law that black is white."
Outgoing Postmaster General Preston R. Tisch has made budget independence his highest priority. His newly named successor yesterday called the cuts "sudden, uncalled for and unilateral."
The Postal Service, after a wildcat strike in 1970, was reorganized into a semi-independent corporation with a board of governors appointed by the president. It must break even financially over time, and its rates are overseen by an advisory postal rate commission, which also is appointed by the president.
Since taking office in 1981, President Reagan has appointed members of both postal boards, strategically placing on each advocates of his efforts at privatization, but relatively little privatization has occurred.
The postal unions believe that Miller is seeking to privatize the post office through the back door, forcing service cutbacks so onerous that the public will turn against the postman. According to the Postal Service, the post office ranks behind only supermarkets in public esteem for delivery of service.
"This is not an effort to strangle the post office and push it into the private sector," Miller said. "Any organization that can't cut .5 percent of its total outlays without crying Armageddon must not be controlling its costs very well."
Nader protested the cutbacks bitterly in a letter to Tisch, blaming him for not seeking funds from Congress to avoid service cutbacks. "In a government replete with subsidies by the many for the few (maritime, peanut, sugar, tobacco . . . )," he said, "a postal subsidy by the many for the many is shunned."
The postal rate commission is expected to announce increases March 4 that may take the first-class stamp to 25 cents and increase third-class rates by a higher percentage.
Pressures on the new postmaster general to economize are likely to be intense. In a news conference yesterday, he declined to discuss wages, efficiency or rates, saying only that "the Postal Service on balance is working very well in a very difficult time."
Labor accounts for about 84 percent of Postal Service costs, despite recent automation.
The average postal worker is today paid $17.53687 an hour, counting retirement and benefit costs, according to Postal Service statistics. In 1984, economists hired by the post office said postal workers were paid 21 percent more than comparable employees in the private sector.
Postal unions said the comparison was unfair because private business discriminates against blacks and women and the Postal Service "pays nonwhites and women wages similar to those it pays comparable white men."
But the argument continues. Last week, John Crutcher, a postal rate commissioner, said that postal janitors earn $10.89 an hour, while contract janitors earn $4.44 per hour.
In 1984, after a bitter fight, the Postal Service instituted a new lower wage for incoming workers to curb costs. Employment subsequently soared to a high of 811,000, according to the Office of Personnel Management.
Soaring volumes of mail prompted the expansion, the Postal Service said, while productivity increased each year, although in 1987 the increase was only .1 percent, according to a spokesman.
"I think they actually had negative productivity," said Van Seagraves, publisher of Business Mailers Review. He noted that much of last year's additional mail was presorted. "This is not labor-intensive mail," he said.
At the same time, the composition of the mail has changed. "For every three new pieces of first-class mail since 1976, the Postal Service has four new pieces of third class," postal rate commissioner Patti Birge Tyson told the Direct Marketing Association last year.
She urged the group to consider the implications of a day when third-class mail -- "junk mail" in the eyes of many -- exceeds first class.
Frank, in his news conference yesterday, refused to be drawn into the fight between mailers over who should pay what share of postal costs, saying only that "third class is an important source of volume and revenue for the Postal Service."
The American Newspaper Publishers Association has pressed hard for raising the rates of third class, an advertising competitor, on grounds that the rates do not reflect the value of mail service and push up costs for others. The direct mailers vehemently deny this and say their service is "atrocious."
Said Frank yesterday: "I'm dedicated to increasing efficiency and hopefully not going too often to the rate commission" for an increase.