That wire
Plugs into the back of the magnetic clutch assembly for the cooling fan.
In your picture the pins for the plug are on the right hand side of the "gold" coloured hub - on the side you can't see - right at the back. It is a bugger to reach.
The cooling fan is controlled by a thermostat in the head. Check that first.
Look in the FSM on startekinfo.com for the correct resistance values for the thermostat (see link in my signature for tips for getting startek to play nice - although the W201 FSM is pretty problem free and accessible)