Postal Cuts Seen as Only Way to Hold Rates : Mail: 40,000 managers will be given incentives to leave in reorganization. Runyon says otherwise, price of first-class stamp could rise a nickel by ’94.

Postmaster General Marvin T. Runyon, unveiling a personnel reduction plan designed to entice 40,000 managers to leave the U.S. Postal Service, said Friday that a major reorganization is the only way to avert rate increases of as much as a nickel a letter by 1994.

Unless the Postal Service reduces its management ranks by approximately 25% to trim a projected $2 billion operating deficit, the price of a first-class stamp could jump from 29 cents to as much as 34 or 35 cents by 1994, Runyon said at a news conference.

The changes he envisions would enable the Postal Service to hold the price of a stamp at 29 cents through 1994, he said.

Runyon also announced new performance goals for overnight delivery of first-class letters within a given metropolitan area. By 1993, he said, the service is expected to deliver 90% of those letters on time. The percentage rises to 95% for 1994 and 98% for 1995. Currently, the Postal Service delivers 84% of those letters on time.

The restructuring announced by Runyon, the former Tennessee Valley Authority chairman who became postmaster general only a month ago, met with a generally positive response from affected trade groups, employee associations and members of Congress.

“Whenever you’re faced with change, there’s always concern,” says Ted Valliere, director of government relations for the National Assn. of Postmasters of the United States. “But we need to remain competitive. We’re behind anything that makes the post office work better.”

“Overall, I think he’ll deal with the goal of phasing out 30,000 employees fairly and equitably,” said Rep. Frank McCloskey (D-Ind.), chairman of the House subcommittee on postal operations and services, who added, “If anyone can, he can.”

The plan calls for the elimination of 30,000 “overhead” positions, described as those held by “anybody who doesn’t touch the mail.” Runyon insisted that at least 40,000 of the 140,000 employees eligible to take early retirement under the reorganization plan would volunteer to do so. The 10,000 additional jobs probably would be filled, presumably with lower-salaried employees.

Runyon predicted a savings of $700 million the first year, and $1.4 billion the second year. He refused to say whether layoffs would be ordered if the Postal Service fell short of that goal.

“At this point, everything appears to be voluntary” said Valliere. “They haven’t given us any indication of what else they expect to do.”

One of the biggest problems the Postal Service faces is competition from private delivery services and alternate forms of advertising, including telemarketing and cable television.

“Competition affects our decisions very much,” Runyon said. When postal rates for third-class mail jumped 25% several years ago, he said, the volume of mail handled by the Postal Service dropped off as companies switched to door-to-door delivery or other media. “We need to get that business back,” he said.

But the best the Postal Service can hope to do is to keep fewer businesses from deserting, according to Arthur B. Sackler, managing director of the Mailers Council.

“No one expects rates to go down, but if they don’t go up, it will make the Postal Service more competitive. Mailers will have to wait and see the performance,” said Sackler. The Mailers Council represents 21,000 companies that claim responsibility for up to 75% of the nation’s total mail volume.

The staff reduction is only one aspect of a massive restructuring, scheduled to go into effect over the next three months. Runyon plans to divide the service into two divisions, one to handle the mail and one to serve customers.

Steps to improve customer service include more flexible retail hours and an improved procedure for lodging complaints. Postal workers attending the biennial American Postal Workers Union convention in Anaheim were pleased with Runyon’s plan to cut from management ranks, saying that it was a long overdue change that they have been pushing for years.

“I’m delighted he’s removing a lot of lard (from management),” said Moe Biller, the union’s president. “(It is a) step in the right direction. The burden should not be placed on the workers.”

Biller, who outlined parts of the restructuring to nearly 10,000 union members at the convention on Friday, blamed much of the Postal Service’s deficit on mismanagement.

Some labor leaders worried, however, that the cuts in management would lead to layoffs among rank and file workers.

“He’s going to say, ‘Well, I did this in management, now there’s nothing left. Now I must go to the work force,’ ” said Omar M. Gonzalez, the general president of the Los Angeles local, which represents 4,700 members. “Every postmaster general comes in wanting to restructure the organization. This one is a little different because he is starting from the top.”

Special correspondent Ted Johnson in Anaheim contributed to this story.