Why race if you don’t have money?

Chapter 238: Stagnation or Learning from Others?

Chen Xiangbei was already used to Briatore's charlatanry; that old Italian rogue was never serious.

He continued packing at his own pace, and only after everything was settled did he return to his hotel in Australia with the rest of the convoy. It was already 8 p.m.

Even so, many car enthusiasts were still waiting outside the hotel, hoping to take a photo with Chen Xiangbei or get an autograph.

To be honest, fans who can wait for hours can definitely be described as "loyal".

Chen Xiangbei wasn't an arrogant person, and he could understand the feeling of anticipation, so he took the initiative to go over and say hello. He didn't ask for autographs because of time constraints, and just took a group photo with everyone.

Upon entering the hotel lobby, Odeto was sitting on the sofa. Seeing Chen Xiangbei approach, he greeted him, "Come to the hotel conference room; we have important matters to discuss."

Chen Xiangbei could dismiss Briatore's words as mere exaggeration and nonsense.

Odette is not one to make silly jokes, so it seems there is indeed something important to announce.

Did you prepare a surprise for yourself to celebrate your performance on stage?

Chen Xiangbei's first thought was this: after all, it was his first podium finish in his professional career, and also HRT's first podium appearance, which meant that they had at least entered the ranks of mid-table teams.

It's only right that everyone prepares a surprise and then goes out for a party to relax.

With this mindset in mind, Chen Xiangbei followed Odeto into the hotel conference room.

Upon seeing the group of people sitting inside, Chen Xiangbei was indeed quite "surprised," but not with delight, but rather with astonishment.

Those present included not only members of the team's strategy team, team owner Carabant, investor Stahler, but also Mr. Peng from Huali Sports, who was far away in China. They all appeared in the hotel conference room at this moment.

In addition, there was a middle-aged man who looked to be of Latin American descent.

"Bei, this is the grand ceremony I've prepared for you!"

Briatore stood up and emphasized this point with great excitement.

"Manager, what exactly are you trying to do?"

Chen Xiangbei asked a very direct question: he didn't like playing riddles.

"Deciding on the team's future!"

【future?】

Chen Xiangbei was completely dumbfounded. The team was on track in all aspects, even if it was about deciding on the future.

Perhaps sensing Chen Xiangbei's confusion, Briatore leaned over and put his hand on his shoulder, guiding him towards his seat while explaining.

"In the North, test engineer Mazzola was present. The new upgraded kit showed a significant improvement in actual testing. After getting used to it, the lap time was at least 0.5 seconds faster than in the opening race."

"Furthermore, your performance in the rain has thoroughly proven your speed and consistency. Our HRT team's championship aspirations are no longer just a slogan, but a demonstration that we have the strength to challenge the top teams!"

"To defeat strong opponents, we must maintain the competitiveness of the race car, which requires a lot of financial and material support. We will definitely introduce third-party investment to solve the team's current financial difficulties and insufficient reserve strength."

"North, do you realize that change is just around the corner?"

Listening to Briatore's incessant chatter, Chen Xiangbei tried his best to quickly digest it in his mind.

He roughly understood the essence of the "important thing," which was to bring in sponsors to invest in the team.

Chen Xiangbei can understand this to some extent. Before the budget cap was implemented and before the U.S. "Free Media" took over the operation, F1 teams were simply a money-burning game.

Only by burning through enough money to join the ranks of the top-tier racing teams can there be room for profitability.

HRT is a new military racing team. Even with the foundation of R&D personnel from Toyota, Honda, and Renault, it still has a huge shortcoming in terms of equipment resources. Even the preparation of the race cars relies entirely on the support of the Toyota Group.

An F1 car consists of three main parts: the power unit, the chassis, and the aerodynamic kit.

The power unit cannot be made independent for the time being and can only be purchased from outside. However, the chassis and aerodynamic kits can be gradually developed in-house. In the next upgrade of the race car, the HRT R&D department will also need to be completely independent.

Otherwise, relying on the existing Toyota TF110 prototype will certainly not allow them to catch up with the progress of top racing teams.

The simultaneous development of the chassis and aerodynamic kits means that a large amount of capital investment is required. Not to mention the design fees, the cost of wind tunnel testing alone is $100,000 per hour, and renting a track for actual testing costs as much as $3 million per day.

The fact that this upgrade kit delivered an effective speed boost without undergoing wind tunnel testing is entirely due to luck.

But luck won't always be on the HRT team's side.

To maintain consistent competitiveness, instead of experiencing one miracle or another like many small racing teams in later generations, you have to spend a lot of money.

Investing in a stock without it having real championship potential is very risky.

Chen Xiangbei's podium performance at this race demonstrates the immense investment value of the HRT team, and it's time to introduce third-party funding to strengthen it.

"Manager Briatore, it seems you were prepared all along."

Chen Xiangbei replied casually that the results would only be released in the afternoon, and everyone would be there that evening.

There's only one explanation: the floral fabric had been planning this all along.

"Of course, opportunity favors the prepared mind."

After saying that, Briatore leaned close to Chen Xiangbei's ear and whispered, "No matter how you and Trulli perform, I will make HRT a strong team. That is my goal for returning to the paddock."

To put it simply and bluntly, Briatore wants to become a championship manager.

As for who the champion is, that's not important.

If Chen Xiangbei doesn't achieve results, Briatore will bring in third-party investment and then kick out the useless drivers.

Of course, having this capability would result in a win-win situation.

After speaking, Briatore stood up, walked to the unfamiliar middle-aged man, and introduced him to Chen Xiangbei: "Bei, this is Carlos, the second son of Mexican Telecom. He is very interested in the HRT team and is willing to invest one hundred million US dollars to buy 33% of the shares."

[Mexico Telecom?]

Upon hearing this name, Chen Xiangbei couldn't help but take a closer look. You see, this company is a super giant in the Americas, equivalent to the combined status of China Mobile and China Unicom in China. Its founder, Carlos Sr., topped the Forbes Rich List for 10 years.

Using the phrase "rich enough to rival a nation" to describe them is no exaggeration.

Currently, the HRT team's shareholding is divided between the original Campos team capital, led by owner Carabant, which holds 33% of the shares.

The remaining 67 percent consisted of US$60 million in Chinese capital brought in by Chen Xiangbei, including US$20 million from Staller.

A 67% shareholding means absolute control under both domestic and foreign laws, which is the capital that gave Chen Xiangbei the courage to recruit Briatore, a double-edged sword.

No matter what ulterior motives Hua Bu may have, as long as he cannot shake the Chinese capital behind him, he cannot kick himself out of the team, which is equivalent to having an insurance policy.

If Telemex wants to buy a 33% stake in the team, unless Carabande sells all of his shares, the Chinese capital will inevitably drop to below 50%, thus losing absolute control.

There is no doubt that this is why Mr. Peng from Jiuli Sports and Mr. Staller were present.

"What's the price?"

Chen Xiangbei is not a business genius; in fact, he has hardly ever been involved in business negotiations in his two lives. His ability to snag the HRT fleet and the Toyota prototype is more due to his God-like perspective on history.

Without the smooth talk and beating around the bush in business, Chen Xiangbei asked very directly.

He believed that since Staller and Peng Sheng were present, they must have already had preliminary talks.

"This 33 percent stake will be used to acquire shares from Chinese capital and provide a seat for an American driver."

Generous!
Chen Xiangbei knew that Telemex Mexico's willingness to invest must have come with its own requirements and goals; otherwise, it would not have been possible to pay such an exorbitant price of one hundred million US dollars for a 33% stake.

It's worth noting that at the beginning of the year, Chinese consortium capital purchased 67% of the HRT fleet for only $60 million.

In less than six months, the return was as high as 300%!

If Chen Xiangbei's performance on stage resulted in a premium for HRT team shares, then...

But even with a premium, it couldn't be this outrageous. Mercedes spent only $1.76 million to acquire a 60% stake in the Brawn GP team at the beginning of the year, which is a genuine championship team.

How can a mere regional podium compare to that of a world champion?
Who is this American driver?

Chen Xiangbei pressed on, admitting that he was starting to get curious himself.

Sergio Perez.

[Master Pei?]

Upon hearing this familiar name, Chen Xiangbei was stunned.

He never imagined that this driver would be the future Red Bull driver, Perez.

However, as the sole representative of American drivers, Perez always had tens of millions of dollars in sponsorship until after his retirement, when the sponsorship shifted to Corrapinto.

Looking back at the historical trajectory, Perez should have debuted at the Sauber team, known as a "cradle of rookies," at the end of 10. It seems his emergence has had a growing impact on history, as the sponsors behind Perez have set their sights on the HRT team.

Of course, Briatore's influence may also be at play.

"Turulli's performance wasn't bad, so why should he be fired after just two games?"

Although Chen Xiangbei was well aware of the cruelty of the F1 paddock and did not have a deep relationship with Trulli.

But to fire a veteran after just two games is truly cold-blooded and ruthless.

Moreover, Trulli also scored points in the opening race. His loss in this race was more due to the blocking instructions and the pit stop mistakes of both cars. Otherwise, he could have also made it into the top ten and scored points in a row.

It can be said that Trulli drove the TF110 at the speed it should have, and he seemed to be performing beyond his usual level.

"It depends on his performance. Perez is currently racing for the Barwa team in GP2, and he can first serve as the third driver for the HRT team, taking on simulator testing duties."

“North, we can’t wait for official drivers to come back to headquarters to verify every time we upgrade a kit. That’s what I mean by needing to expand our reserve force.”

Briatore offered his own explanation: Trulli had entered the "kill line."

However, considering that Perez is still racing in GP2, he can start as the third driver.

This position is similar to the role of Zhou Guanyu, a Chinese driver in the Ferrari team, who usually drives a simulator to test the various functions of the race car and sees if he can get a substitute opportunity at critical moments.

However, Ferrari has a large number of test drivers, and the third driver has not been officially ranked.

HRT team only has Perez, so he is undoubtedly the third driver.

Putting aside subjective factors, Briatore is right. The HRT team does need to expand its reserve strength and cannot use the precious practice time of the Grand Prix to test upgraded kits from scratch in actual races.

In particular, when the two drivers did not share test data, Chen Xiangbei was so pressed for time that he could not even conduct long-distance tests, and was completely forced into the task.

If it hadn't been for the rain, he might not have even been able to get a point, let alone stand on the podium.

"General Peng, Staller, what are your opinions?"

Having already learned everything he needed to know, Chen Xiangbei turned his attention to Peng Sheng and Staller of Jiuli Sports.

Although Chen Xiangbei often acted as the spokesperson for Chinese capital within the team.

But he was ultimately not a shareholder who invested money.

In this situation, the decision needs to be made by the actual shareholders.

"Walley Group has completed the acquisition of Volvo, but according to the agreement, it needs to invest $9 million to jointly establish a research and development center, which is very important for absorbing Volvo's technology."

“The Huali Group urgently needs this money, and President Li has entrusted me with handling this matter.”

Peng Sheng explained the reasons behind it in Chinese, assuring everyone that there was no need to worry about leaking trade secrets.

He added, "Heading north, the next match will be held in Donghai. Jiuli Sports won the hosting rights this year, and we are currently facing a very tight cash flow situation. I want to give you a perfect home game experience."

The most honest answer was that the core reason was "lack of money," and a 300% return was tempting enough.

Chen Xiangbei was well aware of Huali's "lack of money." Even the investment in the HRT team was squeezed out through bank loans, which led to slow progress in the team's subsequent research and development testing and a significant funding gap.

Furthermore, for the Huali Group, absorbing Volvo's technology is definitely a much higher priority than operating an F1 team.

The same applies to Jiuli Sports; organizing the Chinese Grand Prix is ​​a priority over operating an F1 team.

"Staller, and you?"

Chen Xiangbei then asked Staller a question.

Compared to Wally and Julius, Staller has actually retired and doesn't have much need or desire for money.

Chen Xiangbei was puzzled. How exactly did Briatore convince him to attend today's meeting and sell his shares?

"My reasoning is simple: if you want to become a strong team, you can't be complacent."

After saying that, Staller looked at Odttor.

“I believe Odeto understands this even better than I do.”

Odeto nodded in response to Staller's meaningful words.

“Bei, I can understand your original intention to build a Chinese team, but think about Prost team and Super Aguri.”

Chen Xiangbei is far from the only person in the paddock who has the idea of ​​building a national team.

Prost and Suzuki Aguri took action, each creating a "purebred" national team using their own names.

But both teams met the same fate: utter destruction...

F1 represents the pinnacle of automotive technology, meaning that to become the crown jewel, one must absorb the world's most advanced technology and the strongest drivers. Limiting one's focus to "purebred" national teams is tantamount to stagnation.

Prost insisted on using French drivers, French Peugeot engines, and chassis designed by a French company.

As a result, they went from being a mid-table team in the paddock to finishing last and being disbanded.

Needless to say, Super Aguri was brought in for the sake of the dream of the All-Japan Racing Team. He forcibly brought in Yuji Ide, who had never driven a Formula car, and he became the last straw that broke the camel's back.

Odette is well aware that the Chinese giants are currently not strong enough to sustain the operation of an F1 team.

If HRT wants to become the champion team and Chen Xiangbei wants to become the champion driver, then they need to attract huge investments from all sides, learn from the strengths of all, and combine them into one.

The precedents are there; we need to change our mindset.

However, Chen Xiangbei still found it hard to accept. After all, he had overcome numerous difficulties to give the Chinese capital absolute control of the team, but now he had to give it up. Moreover, everyone had agreed that he would be the one left out.

"Doesn't the BOSS need to give up his shares?"

Chen Xiangbei looked at Carabant. As long as he relinquished some of his shares, the Chinese capital would still be the largest shareholder, and the stakes wouldn't be evenly split.

"The boss brought in technology as an investment."

Briatore offered a brief explanation.

What technology will be used as equity investment?

"Ferrari engine technology!"

"What do you mean?"

Chen Xiangbei was somewhat confused.

"BOSS reached an agreement with Ferrari through personal connections, and we will become their customer team next year. At the same time, we will immediately send R&D engineers to tune and fix the defects in the current Toyota engine."

"Toyota has withdrawn from the F1 paddock, and we need stronger allies to support us!"

The power unit is the most difficult technical challenge for a new racing team to overcome in a short period of time.

Currently, due to engine defects in the HRT fleet's Toyota engines, they can only maintain long-distance stability by reducing power output.

Obviously, if they could get technical support from Ferrari, they wouldn't have to travel to Toyota's R&D headquarters in Tokyo, which is in a different time zone, to solve engine problems remotely.

Furthermore, the longer Toyota withdraws from the F1 paddock, the weaker the resources provided by headquarters to the engine department will be. At that point, it will be difficult for the HRT team to solve the power unit problem on its own.

To reiterate, if HRT wants to become a championship team, it needs to unleash the full potential of the Toyota engine and ensure it doesn't blow up!
Furthermore, by becoming a customer team, HRT can conduct early research and development and chassis adaptation for next year's race cars, which will determine the team's future!
Having said all that, Chen Xiangbei understood why the team members all chose to support Briatore.

He did indeed provide irrefutable reasons from all aspects.

After a moment of silence, Chen Xiangbei spoke to Peng Sheng.

"Mexico Telecom can invest in the HRT fleet, but the equity ratio needs to be divided, preferably according to the principle of 3:3:4, with the Chinese capital holding the majority stake, and additional funds are required."

"The future champion team will be worth more than 100 million!"

From the perspective of people in this era, they would certainly think that buying 33% of the shares for 100 million is an incredibly profitable business.

It's important to know that currently, apart from Ferrari and McLaren, all the other F1 teams are money-losing entities, the kind that can be given away for a dollar.

Red Bull acquired Jaguar Racing for a symbolic $1.

Even Honda's offer was actually $1, with Ross Brown's extra contribution amounting to debt and personnel costs.

This is the limitation of the times brought about by the lack of a God's-eye view, which Chen Xiangbei could not explain in much detail.

The only thing he can do is sell it for a good price and maintain his position as a major shareholder while opening it up.

"I want them all" is indeed difficult, but Chen Xiangbei wants to give it a try.

(End of this chapter)