F1 Miami, Red Robin CEO, Paper Soldiers

Published Mar 28, 2024, 12:17 PM

Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
F1 Miami Grand Prix Ambassador Guenther Steiner talks about the growth of Formula One Racing in America. GJ Hart, CEO of Red Robin Gourmet Burgers, shares his thoughts on the competitive burger space. Bloomberg News Senior Washington Correspondent Saleha Mohsin discusses her book Paper Soldiers: How the Weaponization of the Dollar Changed the World Order.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.

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This is Bloomberg Business Week with Carol Messer and Tim Stenebeck on Bloomberg Radio.

The next guest, well known to the F one racing world, well known to those fans of the Netflix Drive to Survive series, is so great to have here with us in studio, Gunter Steiner. He's ambassador of F one Miami Grand Prix, former team principal for the has F one team for I think eight seasons, yes, eight seasons, and as I said, he's here in studio.

Hello, Hello, welcome, welcome, Thanks for having me.

Well, it's great to have you here. How are you? And first of all, let's go right to the Miami Grand Prix. It's coming up on May seventh, So tell us what we can expect, what fans can expect, and why Miami I'm.

Doing good and Miami, Miami. I'm ambassador for the Memmi g Prix. It is a new Grand Prix. It's only the first season that it's on this year. And they came in big and they race the bar in Formula one of organization, just how they do things, you know, just much more entertainment, much more activation, a lot more going on. So if anybody who wants to go and see a Grand Prix, Miami is pretty good because.

There's kind of an event place, right.

Correct, It's it's an event. It's not just a car race, it's an event. There is a different races post a super Cup, there is a one Academy which is the Woman Racing Series. There's just a lot going on all day. It's a sprint weekend. Sprint weekend means there is a race already on Saturday, there's qualifying on Friday for the sprint race on Saturday, and then it's qualifying for the race on Saturday afternoon. So a lot of things going on, and for sure it will be an exciting weekend.

What does having a race in Miami bring to the race and also bring to the franchise?

I think Miami is Miami. Going there it's always it's a cool city.

You know, we didn't do a remote from Miami.

I have done well, I've been. Yeah, it's a great place.

Yeah, exactly.

You guys want to go there as well, you know, especially in the winter. Yeah, from New.

York winter you know, yeah, sure, no, but no if for the one people, it's also uh they do such a good job organizing it. Stephen Ross and Tom Garfink just they put on this race somewhere I wouldn't say out of nowhere, but the idea behind to make it around the stadium and use the stadium to host the teams in their old hospitalities of the teams are set up in there, and with the general admission ticket, you actually can have a look at that stuff. And also you can get very close. Just with the general admission ticket, which is the lowest class ticket, the cheapest one, you can get very close to the cast. So it's pretty cool what they came up with.

Count I think there's what five Grand Prix races now on North American soil, So is there a point working be too much?

Like?

How do you think about that?

In the moment? There is enough in the moment, I would say for the future if the sports keeps on growing in the US. The US was the biggest growing market for Formula One in the last five years since Libert the media took over. They grew it in the States because it was underdeveloped in North America. That was only Mexico and Canada for a long time, and then Austin came in and then Miami came in, and then Las Vegas came in. So I think in the moment they have to solidify the market here and then we can think about the next race. But in the moment, it's not enough. It's the right amount.

Okay, forgive me, but I have to ask, who do you think is the most like driver and principle in F one?

The most like driver? Yeah, Louis Hamilton, I would say he's the most like driver.

What about the most disliked?

I don't know. That's where I was going exactly.

Yeah, I think, yeah, I think Lewis Hamilton, and that's fair to say he's a crowd favorite for our Yeah, I.

Think so he's good. You know, you forgot about that. Daniel Ricardo's he's very like you know as well. You know, so you can't have favorite kids exactly. Yeah, you need to love them all, you know, So he loved them all.

What I said, is he a good fit at Ferrari, right, Yeah, I would say so.

And I think he's motivated. He's now at the stage where he knows that he will be his last seat in F one driving, you know, in F one. So I think it's every driver stream to go to ferrag At some stype stage, I would say I didn't. I didn't get to know any drive, which I said, he WoT he doesn't want to go to Ferrari, So I think he will fit him well. He's very good and he's got a very good relationship with Fred for sir, the team principle because when when he was up and coming in the in the lower serieses, Fred was his his boss basically. So I think there's a good scener you there.

I'm going to say we are made smarter on this subject thanks to Urhannah Elliott, who you know covers our you know, our auto columnist here.

But these are all my original questions.

But one of the things we were actually talking about her with some other things earlier, and you know she asked, she brought up this point of like, you know, how do you kind of create more parody? Like you could often have a team that wins race after or race after a race in terms of Formula One, and we think about the Red Bull team, right, who's done really well. So are there things that could be changed to kind of shake it up so that you don't have the same team over and over maybe taking top spot and should it be done or how do you feel about the purity of like leaving it alone.

I'm for leaving it alone. There's a lot of motives where there's balance of performance. You put more weight in the car so you use the power mechanicals or something exactly. But Formula one is the best man should win and the best machine.

You know, if it's over and over again.

There is a rule. If somebody in the rules can make the best machine, he should have that advantage because they are the best. And I think it will keep on changing. There was a lot of things done that they field is so close together. If you think there's twenty cars out there and in some of the qualifyings between the first and the last is one second. How much is one second? Twenty cars, twenty different people, you know, ten different car made, makes you know it's something amazing to have tom in one second. Obviously it's not. I mean everybody would prefer that every weekend another car would win, but I think in Formula one that's not possible.

But when you think about sailboat sometimes racing, right, they all have the same model and it's like a certain class in something. But you're right, like racing is it's different.

It's the best, the best machine, and the best man should win.

The best team that figures it out right, Yeah.

Yeah, exactly, Yeah, that's for the best.

But don't you think from a fan perspective or from the perspective of an audience or building that continuing to build that audience. It might be better for more parody.

It might be short term better for more pality. But then it's it's becoming a stage sport if you manipulate the rules one, because then if somebody is not good, all of a sudden he gets let's say, fifty horsepower more and he's gone win. What is the next one doing not develop the car, just try to ask for a favor to get him another twenty horsepower more. So it's not really, that is not really what Formula one is about. Formula one is about the best people in the best machines. I think in the moment we are a little bit Go back to Loui Hammerton. He won seven championships almost in a row, you know, and Mercedes was dominating. We forgot about that period, but then it ended. Where is Mercedes now their fourth or fifth best? Now in the moment, it can happen to anybody. It can happen that the next three races Ferrari makes some development on their own, behalf without help of any authority, and catch up, you know, so that I think would be the best outcome.

And sometimes there's a case of right, not only the equipment or the car, it's also the driver, right, so the combination. Like you, you just don't know what plays. You mentioned women and women racing, and I'm just curious about the F one Academy. How do you get more women out there and racing and will the academy do that? And what should be done to not only increase women in terms of racing, but also more diversity.

I think we start with women. I think with the one Academy program is started that and it's not short on. We will have a woman in a phone. It takes some time. This is a new start to get women into racing because normally girls, when when they are small, they don't go go crafting boys. Let's say I take a number. We've got a million boys and we've got one hundred women. The chance to find a talent a million is much higher than to find them in one hundred. So we need to bring the amount of girls up which compete in lower classes to find this big talent to come in. Having now the academy, at least they can see that they can get into the academy and we create a momentum around And even if the girls which are now in the academy cannot make it because they're already too old, when they get to at least we create interest and maybe their daughters get into go crafting, and then all of a sudden we get the pool bigger.

It's going to start with younger. It's got to start young.

They need to start younger, like the boys start five six years old.

One other thing I want to ask you, because in sports increasingly we report on it here in Bloomberg, is the amount of money that's coming in from Saudi Arabia, Pakrain. The introduction into Middle Eastern money into F one. Is that a good thing? How are you saying about it? And how does how does it change it?

I don't think it changes F one in general. It's just like there is there is quite a few races now, there's five races now in the Middle East, right, But otherwise I think the Middle East is investing in old sports. If you look to investing in gold.

We understand what they're doing, but you think it's okay, it's okay.

Yeah, I think it's okay. There is that, there's nothing, there's nothing wrong with it. I think they are interested to invest in sports, and Formula one is one of the biggest global sports, so why should not they invest there?

We got thirty seconds left. What's next for you? We know Miami, it's your focus.

I don't know the rest. What is for me. I'm in a good place now. If there's something interesting for me coming along where I get a good challenge and a good opportunity with a vision to go on the podium, I take it. Otherwise, I keep on doing what I like to do, and that I have a.

Choice another team perhaps, I don't know.

I don't know that did In the moment, I'm still thinking about putting a five year old behind the wheel.

Of a gokart.

You have a son, you can do it.

I have a daughter. You know he's five?

Well, real, quickly, ten seconds? How young do they have to start?

I said five or six?

You did take five or six?

Yeah?

Yeah?

My kid can't even get a glass of waters spilling it. I don't know about behind the wheel.

Goudter, thank you so much. Good luck and good luck in Miami Gunter Steiner. He is ambassador of F one Miami Grand Prix Carol.

Yes, you know what, I love talking about food. I love talking about food.

He also loves consuming food. It's not just conversations, okay, But here's the thing.

We like talking about it. Yes, not just because we like to eat it, but also because talking to the people who run restaurants, who operate restaurants, it gives us a good idea of how the consumer is doing. And of course what's going on with wages, with employment, with inflation.

There's a lot of inputs with food carts.

Something right, I mean, it's really really important. Red Robin Gormet Berger's one of those restaurants. In the US and Canada. There are more than five hundred Red Robin restaurants, including franchises. The company a microcap with a market cap of roughly one hundred and seventeen million dollars.

All right, here to talk about the earnings the business, what's impacting the menu? A lot going on?

Is GJ.

Hart, CEO of Red Robin Gourmet Berger's joining us from Denver, GJ. Nice to have you here with us. First of all, how are you doing? How's the business doing.

Well?

First of all, It's great to be with you guys today. I'm doing very well. And you know, we have been on a path over the last year and a piece to transform this brand on what we call a comeback and the north Star Plan, and we are feeling really good about where we sit today and excited about what twenty twenty four will bring for it.

How's the comeback going? Because shares down about forty percent so far this year, we're bloomberg. This is the stuff we look at, This is the data we look at. What our investors is missing about this turnaround plan right now? In your opinion?

You know, when we laid out the north Star Plan, we said it was a three to five year plan. When you do these kind of transformations, you know there's there's a time element, and in this particular case, there was a tremendous amount to do, of which we accomplished a lot in twenty twenty three. And I think in some respects it's it's how soon will this happen? And you can't always predict that. So when I look at our results in twenty twenty three at a one point six percent comp We grew our ibadad by thirty three percent. We invested twenty five million dollars back into the business. We were able to add the kind of people we needed, managers, et cetera. We upgraded our kitchens, we upgraded our food. Eighty five percent of our menu has been upgraded. You know, I look at all that and say, you know, we are we are in a good place relative to where we thought we would be. And you know, at the end of the day, the share price goes up and down, and over the long term.

It it will follow the right trajectory.

And at this point, we're pleased with where we were in twenty twenty three and where we are now.

But is it frustrating or is there any part of your message that you feel like is not necessarily getting through to investors, because it's not only that it's downstill forty percent this year, but you've got twenty percent of the float that's being shortened, So investors, there's a negative tone to it.

You know.

In our north Star Plan, the fifth point of the plan was we want to earn respect back of our investor base and of our analysts and any any interested party on Wall Street. And I think the company's history, you know, has been not always achieving what they say they're going to achieve, and so.

We're working really hard on that.

We think we've done a nice job communicating where we are and where we stand. And so at the end of the day, you know, is it frustrating, Not really, because we're in this for the long haul. You know, we we see a tremendous amount of opportunity ahead of us. You know, we've put this forth like if you're playing baseball, it's a second inning, and that's not meaning second ending in a negative way, but in a positive way in terms of the runway ahead of us, the opportunity to take an iconic brand, a fifty year old brand, and bring it back into a great place. And so you know, if you believe in that over a period of time, you'll stick with us. And at the end of the day, you know, we know and believe that we're doing the right thing.

Well, you, of course, I imagine, have done consumer research, and I'm just curious about the perception of the Red Robin brand right now where it is and how it resonates with consumers at this point and how that's different than where you want it to resonate when you're done with this turnaround, give us the delta there.

Yeah, so you're right, we've had to do a lot of things in first things first, as we like to call it around here, and it really some of the decisions made back five, six, seven years ago for whatever reason, you know, we're things that definitely hurt from the consumer experience perspective. You know, when you get rid of bussers in a restaurant, or you get rid of it expo in the kitchen, or you don't.

Have the same management compliment.

There's a lot of those things that you have to fix before you can really go out with confidence and say, hey, give.

Us another shot.

And so we've done a lot of that work in twenty twenty three. Our plan as we go into twenty twenty four is to bump up our marketing efforts.

We think we're in a great position to be able to do that.

And then right after we do that, we'll be relaunching our loyalty platform to be much more exciting and much more rewarding for our guests.

And so you know where we are today, you know, with the.

Results we achieved in twenty twenty three, we believe we're slowly getting people to say, Hey, I'm going to give red Robin another shot, but we've got a long way to go. At the same time, when you look at our overall consumer sentiment scores and you align that with the work that we did in twenty twenty three, we're pleased to see nice bumps in all of those levels.

So people are starting to.

See it, but I will say that the frequency at a red Robin had dipped down, so we've got some work to do. So people may not necessarily see it because they haven't been in for quite a while. So this marketing effort we've got going into twenty twenty four here and the loyalty platform will really address that issue. And at that point, we think that with our plan and executing at the restaurant level, that we'll start to see those guests come back in.

Hey, GJ, how there are so many burger places out there, and you know that there's more that seem to be coming out every day, So there's I feel like the older guard like your own, and I understand like you guys are working on the transformation and kind of bringing it out differently, if you will, But how do you stand apart or how do you differentiate and who is the customer that you want in particular?

Yeah, so you're right, there's been a heck of a lot more competition. So first, let me address every one of our buildings, says Red Robin, gourmet burgers and brutes. And so one of the things that we that I really challenged our team is if we're going to have this promise of gourmet burgers. We've always done a great job from an innovation flavor profile, what you put with a burger, et cetera. But are we really confident that we can compete in the sea of burgerland today through all the different players that are out there. And the truth of the matter is Red Robin had sort of fallen behind, and so hence why we changed our total cooking platform mid year to a flattop of our flattop grill, which we believe is where you start with the right kind of burger to develop a gourmet burger, and so we made those changes. It's twenty percent bigger because it yields better, et cetera, versus having it cooked on a conveyor belt type cooking more fast food oriented. So we did that and we feel like that that really helped us to be able to compete in the gourmet burger space, and our guests and our again, our satisfaction scores tell us that that's true.

So I just want to jump in because we only have about a minute left here. We talk about ozepic and the weight loss drugs all the time on our program. How are you thinking about this new class of drugs being used for weight loss? Do you change the menu at all?

Well, first of all, you know, we do have some items on our menu.

You know, we've got a turkey burger and impossible burger, and so we have some of that addressed already. But at the end of the day, you know, we'll have to see what the consumer ultimately does.

Today.

When you look across the broad spectrum those the drug, weight loss, the whole situation, I think it's been slow to be adapted, and particularly in casual dining, because when people go out for an experience like that, they you know, they typically will fall back like, hey, it's an experience, So I'm not necessarily going to be worried about exactly what I eat now that's we have to say we're not paying attention to it. It's not to say we're not going to address it more so than what we already do on the menu.

But we'll see.

I mean, it's definitely something we're paying attention to.

All right, Well, so appreciate you stopping buy and spending some time with us.

GJ.

Hart, President and chief executive officer at Red Robin Gourmet Burgers joining us there in November.

I would like a burger right now.

Yeah, I would too. If you and I were both thinking about that yet Ida burger last night, I would take another one right now. This is Bloomberg Radio.

Well.

From US sanctions on Russia to tariffs on Chinese imports to America's ballooning debt load, policies that touch the Treasury Department are becoming fraught with politics. All of these pose at risks to the national asset the agency is supposed to protect at all costs, the US dollar.

Yeah, so, Tim, It's too early to tell whether the dollar status is the world's dominant currency is in imminent danger, but there's no question that America's privileged position at the center of the global financial system is increasingly being challenged by friends and foes alike.

Those words from an excerpt of Sileia Mosen's new book Paper Soldiers. How the weaponization of the Dollar changed the world order Sileia's Bloomberg new senior Washington correspondent. She joins us now from Washington, d C. Soleia, congratulations on the new book on Paper Soldiers. I do want to start at the beginning. How did the US dollar become a weapon of war? What's the point that we can trace that back to.

There's two points. One, we can trace it back to nineteen forty four, when during the Brettonwoods Conference, forty finance ministers and economic officials from forty four countries around the world got together and by design crowned the almighty buck King dollar as the world's reserve asset. But the other key point in the timeline is nine to eleven. The war on terror that George W. Bush launch did not start with military boots or a military tank rolling into a foreign country. It started with the Treasure Department action with the White House and the President giving the Treasure Department the authority to use the power of the dollar to follow the financial footprints of terrorists who had undertaken those attacks.

Yeah, it's kind of interesting in this idea of the dollar, the weaponization of the US currency. So the impact of that longer term, what has that been.

Well, we've seen the homeland protected national security interests in American foreign policy agenda and goals have been enforced through that. There are benefits to the US of having the world's reserve asset. We have stable and predictable inflation in normal times. We also can finance our federal deficit and our home and auto loans at the lowest rate possible because we have the credibility as the steward of the world's reserve asset. But now we're seeing with the Russian invasion and the US led sanctions on Russia in response to the invasion in Ukraine, that it's possible that the bite from American sanctions is not quite as harsh as one thought.

Interesting. So, like, you know what I find interesting is I feel like you've been doing this a while. Tim's been doing this a while. I've been doing this a while. Like there's so many times where you hear like, Okay, the domination of the dollar, it's about to come undone. You know, whether it's from China, whether it's from other you know, countries and so on and so forth.

Russia doesn't you know, Russia doesn't want it to be the reserve.

Currency exactly, and yet here we are still So I'm curious in writing this book, in your coverage and thinking about the dollar, I mean, how are you thinking about kind of that narrative and where it is today and whether there is some point in time when maybe the dollar isn't the dominant currency.

Carol, You're absolutely right. Every decade or so there is someone out there or many people out there saying that, oh, maybe the yen is going to now be the world's reserve asset. Maybe it's going to be the euro, maybe it's the Chinese yuan or a bitcoin. This comes and goes. The landscape Now twenty twenty four, as the de dollarization rhetoric amps up, is a little bit different because we are seeing for the first time since since World War Two and the economic integration that launched in the aftermath of that, we are seeing that fragmented that kind of coming apart with Russia's invasion of Ukraine and the US having to lead the charge on sanctioning a G twenty country. But what you're talking about is actually where I begin and I end the book. I end that we might not know if this is the moment that began true de dollarization, because a lot of it just has to do with American economic and democratic strength.

Is this moment a little different because of cryptocurrency in any way, or is that something we can dismiss just right off the bat.

I wouldn't dismiss it.

You know.

One thing I do layout in the book is how in eighteen sixty two, when Treasury Secretary Samon P. Chase talked about developing a paper currency, there were lawmakers who thought that would be quote immoral to do that and not have currency bench marked or marked against gold. And so you hear a lot of that record rhetoric. When a new technology emerges, a new type of currency emerges. So you don't want to dismiss that right away, But I don't until you see a challenger that is big enough, liquid enough, and backed by a central bank and a government. Until you see a challenger like that, there's really nowhere that the world can turn to outside the dollar.

But it's so interesting, right like we you know, we were kidding earlier about you know, we're a capitalistic society and so on and so forth in free markets, right, but if you start to weaponize a currency, right, you kind of detach it a little bit from maybe the economic underpinnings that really determine its value. Is that fair?

You know, if you open up unfurl a crumpled up dollar bill, it will say in God, we trust. But really what the buck represents is the world trust in America's integrity in our free and fair elections, rule of law, the stability of our democracy. So as long as we can keep that strong, that no one can really hest the dollar.

Well, we've got a quick, great question off there you want to go here. Okay, what I'm thinking is, all right, it's an election year, right, and we're all talking about it every day. It's now obviously factoring into every conversation, investment conversation, economic conversation, because we are assuming at this point it's going to be a rematch of Donald Trump and Joe Biden. So in an election year, how does the role of the dollar change on who's elected? Or as you talk about the faith in the United States.

Well, when it comes to the exchange rate value, investors seem to think that Trump will bring on a rally in the dollar if he wins. There's been some recent research that's revealed that in the past forty years, data shows that Republican administrations tend to have policies that trend the dollar in a weaker change rate direction. But I think what's different about those kinds of vets are that we are now for the first time in a quarter of a century or more, seeing both parties, Republicans and Democrats, talking about rebuilding and fortifying the industrial economy and manufacturing sector of the US, and those kinds of inward looking economic and trade policies actually rely on a weaker dollar policy. And we've seen you. In the Trump administration, it was Treasure Secretary Steve Devenusian and now in the Biden administration, Treasure Secretary Janet Yellen. Both have abandoned the strong dollar mantra, the strong dollar policy of the nineties and have welcomed a weaker currency.

Hey, we only have thirty seconds left, but Slaya, I just want to end the interview with the idea of the biggest threat out there to the domination of the dollar.

What is that? As we speak?

I think it's within our borders, if we can't get our fiscal house in order, and if we can't get bipartisanship in our electorate and in Congress. I think that's the biggest threat to the dollar.

Yeah, really fascinating.

Right.

We make an assumption around it, but there are things that can certainly deteriorate the trust in it.

And we hear this complaint a lot from guests, but it's not necessarily playing into financial markets right now. Concerns about the deficit, concerns about the fiscal house to do.

Wonder anyway, Sleiah, really great stuff, Seleiah mosaid, she has senior Washington correspondent Bloomberg News. Check out our new book paper Soldiers, How the Weaponization of the Dollar change the World order, a really great deep dive and understanding of the US currency. You are listening and watching Bloomberg BusinessWeek, and this is Bloomberg

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