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March 2nd, 2010
05:20 PM ET

Financial Dispatch: Postal problems, Ford on a roll

The U.S. Postal Service plans to revamp its outdated business model.

The U.S. Postal Service plans to revamp its outdated business model.

Andrew Torgan
CNN Financial News Producer

Snow? Rain? Gloom of night? No problem.

Saturday? Big problem…

The U.S. Postal Service is proposing an adjusted mail service schedule which will likely cut Saturday delivery. The agency is also suggesting the elimination of its prepaid retiree health benefits, closing some branches and expanding its use of self-service kiosks in grocery stores and other popular retail spots as part of its effort to work its way out of a mountain of debt.

And the USPS warns it will incur about $238 billion in losses in the next 10 years if Congress doesn't approve its plan it to revamp its outdated business model.

The agency posted a $3.8 billion loss in its 2009 fiscal year, the latest in a multiyear string of whopping losses. Mail volume was down 12.7% for the year, a trend the Post Office expects to continue over the next decade as more consumers opt for online bill payments and message delivery.

The USPS was $10 billion in debt as of Sept. 30 - not far off from its $15 billion debt limit, which it expects to hit in its 2011 fiscal year.

Also today, the Post Office says it will reduce its workforce by another 30,000 positions and slash overtime this year in an effort to reduce costs.

The USPS, which is not permitted to lay off employees, expects 30,000 employees to retire during fiscal 2010, which ends Sept. 30, and that more cuts will come through attrition.

It currently has about 600,000 full-time employees, down from about 705,000 in fiscal year 2005, and is currently under a nationwide hiring freeze.

Auto sales surprise

The world’s major automakers are releasing their U.S. sale figures for February today, and the expectation was that Toyota's numbers would take a hit as a result of all its recent recalls.

But while the company’s reputation has been bruised, its numbers were actually a little better than expected. Sales fell by 9%, or slightly less than expected.

February was the first full month since Toyota's stopped selling eight models, including its top-selling Camry and Corolla models, because of accelerator pedal problems.

The real surprise, however, came from Ford, which reported a 43% jump in sales compared to a year earlier and a 22% increase compared to January. Ford even topped GM in sales for the first time in more than a decade last month.

GM’s sales rose 11.5% in February from a year ago, about half the gain forecast by automotive Web site Edmunds.com, and sales were down slightly from January.

GM is also recalling 1.3 million Chevrolet and Pontiac models in North America for power steering failures that are tied to 14 crashes and one injury in the United States.

The recall affects 2005-2010 Chevrolet Cobalt and 2007-2010 Pontiac G5 models sold in the United States, 2005-2006 Pontiac Pursuit vehicles sold in Canada, and 2005-2006 Pontiac G4 models sold in Mexico.

Rat out a tax cheat, collect a reward

Finally, if you knew coworkers, former bosses or exes who cheated on their taxes, would you turn them in? The Internal Revenue Service can make it worth your while.

As tax season nears, we all want to get as much money back from the IRS as possible. And while taking advantage of this year's new tax breaks will put some extra money in your pocket, snitching on a tax cheat could make you rich.

The IRS's informant program has been around for more than 140 years. If you suspect a person is committing tax fraud and report it, you could receive up to 15% of the amount that has been underpaid, with a maximum award of $10 million.

And because there is no minimum requirement for the amount in question, anyone can file a report in hopes of making an extra buck off of a cheating boyfriend or obnoxious neighbor.

Follow the money… on Twitter: @AndrewTorganCNN


Filed under: Andrew Torgan • Economy
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