Maybe a book of “Forever” stamps isn’t such a good investment. A rumored privatization effort would split the U.S. Postal Service (USPS) into two parts while jettisoning some services, raising prices and spinning off some assets.
It had been thought that Trump’s hand-picked postmaster general, Louis DeJoy, was one of those plotting a top-to-bottom shake-up of the agency but DeJoy suddenly resigned last week, perhaps leaving the job to Elon Musk and his Department of Government Efficiency (DOGE).
DeJoy had said last month he planned to step down but hadn’t set a date. He was named to the position by Trump in 2020 and was the first person named to the job in more than two decades who was not a career postal employee.
Trump has said he is considering putting USPS under the Commerce Department, ending its lengthy tenure as an independent agency. The decline of first-class mail has muddied the budgetary prospects as USPS continues to lose money despite annual revenue of $78 billion.
DeJoy’s sudden departure hints at new players, and one report points to Wells Fargo as a potential take-over entity. The financial giant recently distributed a memo calling USPS an “obvious source of value” in a combined privatization and spin-off.
The idea is that USPS would sell off its parcel business, possibly to competitors FedEx or UPS, while maintaining mail as a government service under a new department and with a stripped-down, more efficient structure.
Major price increases and labor givebacks would be an essential part of any such strategy. It has previously been unthinkable that Congress would go along with such a plan but with the GOP in control of both houses, now may be the time to strike, the theory goes.
As in a private-sector leveraged buyout, the plan would presumably include stripping USPS of its most valuable asset, namely 8,500 offices, ranging from single-room rural post offices to major distribution centers. Wells Fargo suggests the value of the property would be at least $85 billion, enough to finance a make-over.
