Ford rolls out new Explorer with marketing bang

Ford Motor Co on Monday rolled out a redesigned version of its Explorer SUV with its flashiest launch since it began a restructuring five years ago.

The Detroit automaker also promised to hew to the cost-cutting discipline that has marked its comeback.

The introduction of the 2011 Explorer, the SUV that generated billions of dollars of profit for Ford a decade ago, came as analysts raised stock price targets and earnings estimates for Ford after it reported a second-quarter profit and forecast strong profits this year and in 2011.

The No. 2 US automaker used executive appearances in New York, Chicago and Washington, an employee rally at its Michigan headquarters and a campaign on Facebook with almost 50,000 fans to unveil a more fuel-efficient version of an SUV that had been the symbol of its success in the 1990s.

Ford chief executive Alan Mulally unwrapped an Explorer in an appearance on NBC's Today show and told reporters at a presentation in Manhattan's Herald Square that while sales would not near former levels, the SUV remained important.

"There's a very nice market for SUVs, still," Mulally said. "It's less than in the past, but people still want really high quality, fuel efficient SUVs."

In a return to the elaborate marketing productions that became a signature of the U.S. auto industry when it was near peak sales earlier this decade, Ford hauled mulch, dirt and more than 200 trees and shrubs to Herald Square. The event also featured mountain bikers and actors posing as hikers.

In Dearborn, Michigan, Ford emptied out its world headquarters and built a massive dirt ramp for the Explorer to climb under a banner that covered the top three floors of the building.

Explorer sales averaged more than 4,00,000 per year from 1995 through 2003 but tumbled to 52,000 in 2009 as consumers turned to lighter car-based utility vehicles. Competition across the SUV segment also ballooned after the Explorer's introduction.

The redesigned Explorer will be built on a modified car platform at Ford's Chicago assembly plant with a four-cylinder turbocharged engine available for the first time, aimed at more than 30% better fuel economy than its predecessor. A six-cylinder version will also be available.

The new Explorer will carry a base price about $1,000 lower than the previous version at $28,190, Ford said.

About one-third of Explorer sales are outside the United States and the new SUV is expected to be exported to 90 countries, Ford global marketing chief Jim Farley said.

Ford also expects to take on 1,200 workers to add a second production shift in Chicago for the Explorer. About 500 workers on long-term layoff were offered positions first under the automaker's contract with the United Auto Workers union.

"We want to be cautious"
More than 350 workers on long-term layoff have accepted positions so far and Ford expects to hire additional workers at a $14 per hour wage and reduced benefits, according to Jim Tetreault, vice president for North American manufacturing.

Executive chairman Bill Ford said he was encouraged by Ford''s financial results. Ford said he was hopeful the automaker could hire more new workers beyond the Chicago plant  but warned that the car market remained depressed.

"We want to be cautious and don't want to overproduce," Ford told reporters in Chicago. "We've been there before."

Ford expects to export SUVs from the Chicago plant. President Barack Obama is scheduled to tour the facility next week.

Ford posted a $2.6 billion profit on Friday and said it was on track for higher earnings and lower debt in 2011.

Ford has sold six million Explorers and about 140,000 are traded in each year, creating a ready-made pool of potential customers for the new version of the SUV.

Barclays Capital analyst Brian Johnson raised his price target on Ford stock to $15 from $13 on Monday, citing the stronger-than-expected second-quarter profit and debt reduction efforts that trimmed $7 billion of automotive debt.

"In the mid-term, we continue to expect Ford's strategy to consolidate global platforms to improve scale and volume to boost the company's earnings potential," Johnson said.

Deutsche Bank raised its price target on Ford shares by $1 to $14.50 and JPMorgan analyst Himanshu Patel raised his 2010 and 2011 earnings per share estimates to $2 from $1.60. JPMorgan has a "neutral" rating on Ford stock.

Shares of Ford rose 1.7% to $12.80 on Monday on the New York Stock Exchange. The stock is up almost 90% over the past year.