Changes are in store for Michigan’s automaker General Motors (GM) as negotiations commence with the United Autoworkers labor union. Many see this situation as a labor dispute, and others believe it’s the start of disruption benefits for Michigan’s auto industry and economy.
What exactly are disruption benefits? They’re business principles that help launch or introduce a new and improved method in an evolving marketplace. At the moment, Michigan automakers are in the process of preparing to manufacturer the next generation of technologically driven vehicles. By using technology and implementing the disruption principles to change how things are done to keep the company thriving in a highly competitive industry.
How’s the workforce going to adjust to these ultra-modern production changes intended to augment traditional work processes. The change may mean better wages dictated by the job market, coinciding with the design and cost of these new vehicles. Bottom line — autoworkers are going to experience substantial changes in technical occupations, as automakers rely on professional leadership for planning and logistics to implement these transformations.
It’s all good news for Michigan’s economy and the workforce because employers will need to update the work environments for training, safety, jobs, and employment regulations. However, like most disruption benefits, it’s not going to happen overnight. Past instances have proven that the effects of business disruption occur incrementally anytime social, political, and economic systems come into play. Unless the GM strike continues into the month of November, the recent ripple effect will remain localized.
So, what’s next? Well, recent reports cite that the automaker and union representatives hope to find a winning solution for both sides of the table quickly. The truth of the matter, neither party can afford a long term strike. Projections for escalating year-end business cycles and investments are still firmly focused on financial well-being with high expectations for the future.
SROA Capital has built a replicable investment strategy founded on rigorous research that provides positive evidence for self-storage investments. Included in the data collection are selective urban centers and first-ring suburbs matched with financial systems designed to sustain a ripple effect, throughout Michigan’s economic periodic shifts.
Real estate investments have maintained the highest level of potential returns in marketable asset classes. Expectations on this property type investment is supported by its steady income and prospective growth opportunities. These two primary reasons are why SROA Capital isn’t worried about the possibilities of negative effects from GM’s strike.
Further assurance is the automaker’s history. Looking at the big picture, gross domestic product (GDP) economists note that GM accounts for less than 20 percent of current U.S. vehicle production. Shares did drop slightly with the strike-breaking news but rebounded shortly afterward. GM is scheduled to report its earnings for the third quarter on October 30, 2019. Investment research and forecasts tracking the company’s performance expect to see an increase per share compared to last year’s report during the same quarter.
After decades of Michigan’s rebounding success, residents and businesses continue to endure and prosper in what most call a positive impact as a result of the disruption. Although the automotive industry has a strong presence in Michigan, personal spending (consumption) is responsible for a more significant percentage of the state’s economic growth. SROA’s investment approach is based on experiences focused on promoting economic opportunities that center on the components of success comprised of profitable real estate investment yields, measurable financial returns, and expert capital partners.
Let’s face it; disruption is part of all successful businesses, yet disruption benefits play a viable support role at different points of investment and economic phases. The changes in primary markets tend to cause secondary market investment yields to rise as a result of increased demands. In this case, should the strike continue, homeowners and businesses may downsize and find themselves in need of short or long-term self-storage. That’s good news for self-storage. In the event the strike issues are resolved quickly — it’s back to business with minimal strike impacts to self-storage facilities and return of investments (ROI).
Real estate class assets fall into a broad and diverse investment sector. Performance and rate of return is a vital attribute attracting real estate investors to this particular investment sector. Self-storage investments have continued to outperform other segments of commercial real estate properties. As of May 2019, self-storage average returns hit over two percent with a double-digit positive return for the year of more than eleven percent. Third and fourth quarter reports expect to see these positive returns continuing well into 2020.
As an industry leader, SROA is well versed in identifying self-storage real estate investment properties with the ability to generate profitable returns, control risks, and sustain growth through economic events. For now, stable market rates of return appear to be attainable in self-storage investments, but SROA management skills remain an essential driver linked directly to self-storage investment performance.