Emodrom group CEO Thomas Reister (r.) Explains to the audience, including OB Marcus Zeitler (l.),…
EDITORIAL TALK IN AN EXCLUSIVE INTERVIEW EXPLAINED THE FOUNDER AND MAIN PARTNER OF THE EMODROM GROUP, THOMAS REISTER, HIS PLANS FOR THE FUTURE Image: © emodrom / Chaparro
The city of Hockenheim and the Ring – they belong together like pitch and brimstone. Who in the world would have heard of the small town in the Electoral Palatinate, had it not been for motorcycle Grand Prix and Formula 1? And how well could it be for Hockenheim financially if the city budget hadn’t been repeatedly confronted with investments and debts from Ring GmbH? Well and sorrow are close together here. The DTM is only doing one race of the season here, Formula 1 is gone for the time being, but could come to rethinking itself in the Corona crisis and have to bake smaller rolls because the money is no longer so easy elsewhere. And what is this emodrome group doing that is preparing to take over the direction of the Ring? Does it bring the city into even greater difficulties or does it ensure the liberation from the market economy for a good future? We managed to have an exclusive editorial meeting with one of the founders and the main shareholder of the Emodrom Group, Thomas Reister, virtually, of course, like everything else at that time.
The economy is going down, the race track is closed. As the idea generator and managing director of Emodrom, don’t you have a lot of time to think about the future at the Ring?
Thomas Reister: Yes, in fact, and we do that too! We have equipped our entire team directly with IT for work in the home office and are on site with changing minimum staffing to protect our workforce. It doesn’t make any sense to ponder what cannot be implemented as planned right now, because we cannot change it anyway. Rather, I have been busy with my colleagues and employees since the first day of the corona-related closure of the Hockenheimring, how we are so well positioned that – to stay in racing jargon – when the traffic light turns green, we are optimally prepared to start again immediately and already continue to successfully implement projects that have already started.
Were you able to create new jobs, as you predicted at the beginning, and how is the Emodrom Group positioned at the Hockenheimring?
Reister: When I founded this company eight years ago, I started this new business area together with an assistant and with the support of Georg Seiler and Ms. Kutzer from Hockenheim-ring GmbH. The Emodrom Group now employs over 20 permanent employees and additional service providers at the Hockenheimring – and the trend is rising! We are very well positioned in terms of quality. Here I act like in sport, in which I have been active for almost 30 years. You need the best available employees with a high level of motivation and the ability to put themselves at the service of the team. Everyone is deployed where they can do their best. This is the only way to be successful and to win titles in a figurative sense. We trust in young colleagues as well as in employees with many years of high expertise. For example, my current management team Tim Brauer and Kai Hennefarth, who are doing a great job and without whom we would not be where we are today. This is impressively demonstrated by the record construction time of the Porsche Experience Center (PEC), which we realized in just twelve months from the groundbreaking to the handover to our tenant Porsche in October.
The ring recently made headlines around the world with a headline that read: “Fairs instead of motorsport”. What did you think?
Reister: A well-intentioned headline from one of your colleagues in another newspaper, which, taken from the original context, conveyed a different, as I mean negative, message and therefore actually went around the world. The correct answer is “Hockenheimring, mobility center and motorsport!” This is exactly what we talked about in a large group on the occasion of the visit by the Baden-Württemberg Minister of Economic Affairs, Nicole Hoffmeister-Kraut, in January. In addition to her, our Mayor Marcus Zeitler, the CDU member of the state parliament Karl Klein as well as the management of the Landesmesse Stuttgart and department head of the ministry took part. Our impression was that the participants were convinced of the path they have taken with the Emodrom here at the Hockenheimring since 2012 and that we have been in dialogue and professional exchange ever since. An assessment that, by the way, also shares Transport Minister Winfried Hermann, who has been accompanying our “e4 Testival” as patron of the Start-Up Awards since 2018 and in his laudation in 2019 expressly recognized the transformation of a racetrack into a mobility center. That made me personally very happy, because the green state politics per se have a hard time supporting a racetrack, which in recent years has also led to the fact that in Formula 1, unlike in the rest of the world in Germany, no top politicians are invited to the award ceremony was seen. I have made the experience that with our concept we can always welcome political decision-makers from the CDU, SPD, FDP and Greens from the state, federal government and the EU in Hockenheim through personal invitations.
Is it true that the Emodrom Group’s planned financial stake in Ring GmbH is currently on hold?
Reister: Yes, due to the current situation. The city administration had invited all residents to a comprehensive information event in the city hall on March 23. This could of course no longer take place due to the Corona state ordinance of March 17th. And precisely this information to the interested Hockenheimer citizens is a prerequisite for the next steps. Incidentally, this information event has been set up and wanted for a long time by all those involved, i.e. by Stadt, Ring GmbH and Emodrom. In particular, all the municipal councils across the political groups have agreed on this since the beginning of the process. So it was and is not an individual request, as you could read it from time to time. As soon as public and our private life normalizes, we will sit down directly, discuss the current situation and continue on the path we have chosen.
What is currently still working on the ring, despite the shutdown?
Reister: Hockenheim-Ring GmbH, with its event, catering and hotel business models, is much more affected, as I learned from conversations and was able to read in an interview in this newspaper a few days ago. The ring stands still and the employees hope for a restart soon. At the Emodrom Group, things are a little different because we are more broadly positioned thanks to our business models. On the one hand, we generate income by renting our buildings. In addition, we work on digital platforms with our employees in home office structures and serve customers safely with our qualification and further training offers.
Let’s look into the future. Where can the ring be placed?
Reister: Exactly with the concept with which I started here in 2012, which I still promote today and which we are implementing together. We need a greater diversification of business models at the Ring. In the short to medium term, the classic event business will definitely look different from what we were used to. Especially in the segments in which the Hockenheimring has its unique position, namely to hold events with up to 100,000 visitors. It remains to be seen until when such orders of magnitude will become realistic again. I suspect it will go longer than we hope it will. Various legal, medical, economic, event and insurance law factors play a role over which we have no influence. These, in turn, will have an impact on the contribution margins, as the allocation of catering, entry and route prices cannot be continued indefinitely, otherwise it would have a negative effect on visitor numbers. All providers of large race tracks and event locations are faced with this challenge. That is why we are on the right track.
What role can e-technology and hybrid technology play?
Reister: A central one! It was not without reason that I submitted this concept to the municipal council and administration when it was founded. I’ve been dealing with it since 2007 and from today’s perspective I had the right instinct. Technical and social changes are developing rapidly, so you always have to be open to technology. Hydrogen, fuel cells, synthetic fuels and other technologies will also play a role in the future. The bookings on these topics and with such vehicles at the Hockenheimring by organizers, manufacturers and the media are noticeably increasing, and we are only at the beginning, as the legal requirements and social changes clearly dictate this change in mass mobility.
What will become of your shop window of modern drive systems that you had in mind from the start?
Reister: We are neither researchers, developers nor producers, but rather providers of what I consider to be one of the best communication and marketing platforms in Europe for the presentation of future-oriented mobility concepts and innovative technologies. When everything returns to normal, we will start a great research project together with the Stadtwerke in Hockenheim, the KIT and the Eifer Institute from Karlsruhe. It is called “MoBILE” and is intended for mobile energy storage systems to cover peak loads – a program funded by the state of Baden-Württemberg. As soon as we get started, we will report on it, invite interested citizens and organize guided tours. With my team, we will advertise that other innovative companies get excited about the location. Of course, suppliers, energy providers, software companies or mobility providers are also an asset. It would be great if we could win other top international companies – including from Baden-Württemberg – such as Bosch, EnBW, Mahle, SAP or ZF as well as universities and the start-up scene for the Emodrom mobility center Hockenheimring. For this we need the further expansion of the infrastructure, about which the administration and committees have been informed since the foundation of Emodrom and are constantly updated.
What have you achieved, where have you not come as far as you wanted to?
Reister: We were able to successfully take the first big steps towards transforming the racetrack into a mobility center. This includes the settlement of Porsche, the Dörr Group with an interesting range of brands such as McLaren and Lamborghini, our e-kart system and the innovative trade fair concept “E4 Testival”. The planned participation in Hockenheimring GmbH, the construction of the hotel and the mobility center could be more.
How obstructive are the rather small town structures behind the GmbH for modern management?
Reister: It is obvious that a modern, successful company today requires a high degree of flexibility, financial resources, flat hierarchies and thus quick decision-making processes. And of course entrepreneurial thinking, which, as always, is associated with certain risks for which someone has to be responsible. A city administration is set up differently per se due to its committees, municipal regulations and EU regulations. In addition, there are challenges in a wide variety of areas such as affordable housing, facilities for children, education, the elderly, follow-up accommodation, infrastructure and much more, which demand a lot from those responsible and cost the taxpayer money. These structures do not fit on top of each other for companies that have to assert themselves in competition with private providers. And this includes, in particular, an event location like the Hockenheimring, which in the short to medium term needs substantial funds for maintenance and new structures in order to meet the future needs of the organizers and customers. With its right to have a say and veto, the city already has extensive control options in several areas, regardless of the question and size of participation.
Do you still understand the concerns of some citizens about privatizing the Hockenheimring?
Reister: Of course. The ring belongs to the city and the city to the ring. And it was precisely with this in mind that we founded Emodrom back then. It’s about creating additional added value with new business models. Everything is evolving and you have to take this development into account if you want to survive and the Hockenheimring will continue to be the flagship of the city in the future. We all understand the need and have great respect for being able to continue the almost 90-year tradition. Looking back, for example, in the founding years from 1932, during the major renovations in the 1960s and early 2000s, people with clear goals and the support of the population were required to develop the ring further. Without these steps, you would not have gotten any of the major sports formats such as motorcycle world championships or Formula 1 that have made Hockenheim world famous since the 1970s. It is therefore necessary to continue on the path, to have answers to current and future challenges and to implement them well-considered and promptly. The market and the world are not waiting for us. Just imagine if we had started the PEC concept two years later. No manufacturer would have decided on new projects of this magnitude these days. With the result that the Hockenheimring GmbH would be missing important and decisive income today. For me this means that we can preserve the history of the ring as a partnership and at the same time face the challenges. But it definitely makes no sense if individuals today question the necessary further development with sometimes false claims based on their own interests, old stories and sometimes their own mistakes and thus repeatedly cause uncertainty in public. A visitor to one of my presentations in Hockenheim got right to the point by stating that obviously those who are furthest away from the current day-to-day business of the Hockenheimring think they have the greatest expertise. It is wrong to use the experience of 20 years ago to allow yourself to judge today without ever getting to know the people involved, let alone having spoken to them. After eight years, everyone involved has proven that you can trust each other and implement new projects and, together with the administration, we will provide the citizens with comprehensive information as planned as soon as this is possible again. We are open to constructive criticism and, above all, purposeful suggestions, if these are exchanged in personal conversations as it should be. That is why I have so far invited everyone who has specific questions or wants to be informed. And the information event is coming soon.
There were also always voices and letters to the editor warning of the city’s financial risks. Did you receive any money or salary from the city for your work?
Reister: No! I started my own concept, which I have been working on since 2008, on my own account. Incidentally, this is also what the partnership agreement with Emodrom GmbH says. Just as it is stored there, the strategic further development of new mobility topics is the sole responsibility of Emodrom GmbH. And if financial resources are required, I and my co-partners are ready to get involved at their own risk, as this is not possible due to the aforementioned urban requirements and financial situation, or local regulations sometimes conflict with it. It was the same with the construction of the PEC when it came to securing the necessary equity ratio. I was informed that in addition to the still high obligations and problems from previous measures between 2000 and 2002, which were the responsibility of the city, no additional funds were available and whether I could offer a privately financed solution that would do justice to the interests of both shareholders become. I am convinced of what we do and decided to make the financial commitment by integrating two partners. One of them is Tim Brauer, a proven expert in finance and law, who has been operationally responsible as my colleague on the management since then. But above all he is a team player and friend. If you use your own money and are responsible and liable to partners and banks with your own assets, you have a different perspective and act in a goal-oriented manner.
How do you participate in Hockenheimring GmbH and the city as shareholders?
Reister: Due to the positive effect that we are securing the GmbH with lease, rental, advertising and catering rights that are obviously important and currently the only significant income. And a good partnership on both sides also means that we still pay, even though some of the agreed services cannot be provided by Ring GmbH due to the closure. According to the motto “As in good times, so in bad”, we stand by our responsibility here. I have been working in this business in various functions and as an entrepreneur for almost 30 years and have built up my networks in Formula 1, Moto GP, endurance races, Formula BMW, national series, media and the automotive industry and learned a lot from this time. We also work in this spirit. For me, that means it goes on and on and we have to keep improving.
Can you imagine a ring without a car race?
Reister: The DNA at the Hockenheimring are races and active driving events. This will continue to exist in the future regardless of the type of drives and technologies, and I am committed to this.
What does the current situation mean for your tenant Porsche with the Experience Center?
Reister: Nobody could imagine such a scenario as we are currently experiencing. But nobody knows what else to expect in the future. Regardless of this, we have been convinced of the concept of diversification since the beginning of our work, and Porsche in particular is the best example for us with this strategy. Just like it was a unique opportunity for Porsche to take advantage of my offer here at the Hockenheimring and thus create a unique selling point compared to the competition. The PEC is currently also inactive. However, I assume that all the manufacturers I speak to are already working intensively on restart programs for their end customers, all of which will participate.
Is there a chance to bring Formula 1 back or is it better to bet on Formula E?
Reister: From my point of view, we should basically deal with international sports formats at the Hockenheimring. I understand the wishful thinking that you are happy to host Formula 1 when there are no financial risks involved. Bernie Ecclestone has successfully developed this format into the world’s largest annual sports business. It is therefore unrealistic when more and more rising states pursue the political goal of getting international sports series and thus the demand for this already limited format exceeds the supply of available races. So the prices go up. Nobody will come here by themselves and put the necessary funds on the table. You need new models and the courtesy of the rights holders to face the financial possibilities in Europe if you want to keep some traditional locations on the calendar. So here, too, a healthy financial basis, modern structures, good partnerships and stable networks are required in order to develop such business models.
And the Formula E?
Reister: The same applies to Formula E, which is developing enormously. In 2008 I was involved as CEO in a private project in which we developed the first long-distance racing car with hybrid technology and used it in the 24-hour classic at the Nürburgring. On this basis, specifications in today’s FIA regulations for e-vehicles were created. Among other things, we developed ideas at the time to go to cities with an E-Series for certain reasons and submitted them to the FIA, just as Formula E mostly does today. But here, too, nothing is forever and social interests, especially in city centers, continue to develop. There are now good arguments to go to cities as well as to suitable motorsport locations, as these sometimes offer better and more efficient infrastructures for series, teams, sponsors and industry. So to do one thing without leaving the other!
What will the Hockenheimring look like in 2025 and how in 2030?
Reister: If the city committees make the right decisions, we should see a new hotel and modern infrastructures in 2025, so that we can all look forward to a successful, profitable Hockenheimring with new business models in 2030. Hesitation and hesitation are not good advisors and create a bad image with partners and the public. Why do business with someone who keeps telling them how bad they are? It is also destructive when the same people ask the same questions over and over again and thus delay important developments. A good example of how it can be done differently is Jochen Nerpel, one of the managing directors at Ring GmbH since 2019. With a lot of enthusiasm and few resources, he positively changed the image in the paddock and on the track. I also get this impression from customers. Together with the Emodrom commitment, a fresh wind is blowing through the Motodrom. It is a privilege for my team to be able to work here and to have the trust of the majority of the local council and the administration. Each of us is aware of our responsibility. We will be successful with the joint, highly motivated team.
© Hockenheimer Tageszeitung, Thursday, April 9th, 2020