Were he running a Fortune 500 company -- supervising 700,000 employees, collecting billions in annual revenue -- Patrick Donahoe might well be a household name by now.

And if the year were, say, 1935, Mr. Donahoe might well be known as one of the country's top politicians.

But in 2010, Mr. Donahoe's promotion to the position of United States postmaster general will go unnoticed by most casual news observers -- except, probably, by friends and family in his hometown of Pittsburgh.

In two weeks, Mr. Donahoe, now the deputy postmaster general and chief operating officer of the U.S. Postal Service, will take over for longtime Postmaster General John E. Potter, who has held the position since 2001 and is retiring Dec. 3.

Mr. Donahoe, 55, who still calls the Pittsburgh area home and returns here from Washington, D.C., many weekends, takes over a Postal Service that is shedding customers and posting annual losses. For the fiscal year that ended in September, the USPS lost $8.5 billion, and the agency says it could run out of cash next year without help from Congress.

It is, by any measure, a challenging time to become the Postal Service's top guy. But Mr. Donahoe believes the USPS will continue to adapt to changing marketplace conditions.

"The Postal Service is still a very viable part of America, from an economic and social standpoint," he said. "We're still going into every house and business, six days a week."

For now, that is.

One proposal on the table to cut costs at USPS is to reduce delivery to five days a week. Others include more staffing and branch reductions, increasing prices on some products and asking Congress to do away with, or reduce, an annual payment the USPS is required to make to pre-fund its retiree benefits. That payment hit $5.5 billion this fiscal year and was a large contributor to the $8.5 billion loss.

On the operating side, "We lost $500 million, based mostly on volume loss," Mr. Donahoe said, indicating that the USPS, while suffering financially, is doing relatively better when it comes to revenues over costs.

A 1977 graduate of the University of Pittsburgh with a bachelor's degree in economics, Mr. Donahoe grew up in Whitehall, attending South Hills Catholic, and he still keeps a home in Venetia, Washington County.

He said living around Pittsburgh in the 1980s, watching the steel industry suffer the way it did, informs his leadership priorities today.

The USPS employs roughly 700,000, including career and noncareer staff, making it the second largest domestic employer behind only Wal-Mart. Watching the job loss that followed the demise of local steel -- and, to a lesser extent, the auto industry -- is a constant reminder of what can happen when a big employer is crippled and doesn't plan for the future.

"I feel it's my responsibility to make this an ongoing, viable organization," he said.

Transitioning from COO to postmaster general means Mr. Donahoe will devote less time to the daily operations of the USPS, and more time to the big-picture issues, lobbying Congress and other politicians.

There was a time when the U.S. postmaster general was not so much a lobbyist of politicians, but a powerful politician himself, a cabinet member in line for the presidency.

It is, by some arguments, the oldest federal position in American politics -- statesman Ben Franklin was appointed postmaster general in 1775 before the Declaration of Independence was drafted and the Second Continental Congress established the country's first constitution. Eventually, it became more or less a patronage job, offered to a president's campaign loyalists and the Post Office Department itself was part of the executive branch. Some postmasters acted as party whips, lobbying for votes and enforcing party loyalty.

In 1971, under President Richard M. Nixon, the department was reorganized and renamed the United States Postal Service. After that, the postmaster general was no longer a sinecure position, and postmasters selected since then generally have independent business experience or come from within the USPS's ranks.

The president no longer selects the postmaster -- that job lies with the board of governors that supervises the USPS. The outgoing postmaster made $273,296 in 2010, plus hundreds of thousands in performance bonuses and other benefits. The postmaster's base salary is set by the Postal Accountability and Enhancement Act of 2006, and Mr. Donahoe's base salary will be similar to Mr. Potter's.

Mr. Donahoe, who will be the 73rd postmaster general, is a lifelong Postal Service employee (except for the brief time as a youth that he spent working at a White Cross Drug Store).

He entered the Postal Service as a clerk. Later he was put in charge of the service's local vehicle maintenance division, then elevated to vice president of the Allegheny Area Operation, a delivery zone that includes parts of Pennsylvania, Ohio and West Virginia. He has been working out of Washington since 2000, serving first as senior vice president of human resources, then senior VP of operations.

That he is a Postal Service lifer, he said, gives him a broad perspective on the independent agency -- what it's doing right and where it can improve.

"We need to be leaner, smarter, faster," he said. The USPS has made productivity gains since its 1972 reorganization, and the service weaned itself away from tax subsidies between 1971 and 1983. It has halved the number of mailboxes in operation and cut tens of thousands of full-time positions in the last three years.

But that hasn't been enough, especially in the face of the recent recession, which saw drops in revenue and the number of pieces of mail delivered (177.1 billion pieces of mail in 2009, down from 202.7 billion pieces in 2008 and roughly 210 billion pieces in 2006).

The USPS has a federal line of credit that helps pay some of the bills. That $15 billion U.S. Treasury credit line, in place since the 1990s, is down to its last $3.5 billion. If the USPS taps the remainder, it will need to explore other cost-cutting and revenue-raising options.

That could mean an increase in postage -- though a proposed "exigent" rate increase was recently denied by the Postal Regulatory Commission. It also means expanding existing partnerships with shipping companies FedEx and UPS, and sending more direct business mailers, an under-utilized business revenue stream.

But even then, Mr. Donahoe said, the Postal Service may still need some congressional intervention. It will also need more flexibility out of its workers, turning some full-time jobs into part-time positions, a move that American Postal Workers Union and the National Rural Letter Carriers Association oppose. Both unions are presently negotiating new labor contracts with the USPS.

"We've squeezed cost every which way we can," Mr. Donahoe said. "We're really not sure what it's going to look like when you get beyond 2020."

He is scheduled to testify before Congress next month regarding the USPS's finances and legislative wish list.