DUNDEE, Mich. -- Few places in North America are so vital to Chrysler Group LLC's future as a former farm field just north of downtown Dundee, where the engines that will drive the once-bankrupt automaker's new small-car lineup are built in its most productive engine plant on the continent.
The Global Engine Manufacturing Alliance plant -- a mammoth 1.2 million-square-foot, six-year-old building that houses two distinct engine lines and was named for a now-dissolved partnership -- this summer is hiring workers, retooling an engine line, and preparing to single-handedly improve Chrysler's worst-in-class fuel-economy reputation.
"It's Chrysler's main four-cylinder engine plant, so that plant is obviously very important," said Jim Hall, a longtime auto industry analyst with 2953 Analytics in suburban Detroit. "Chrysler, like everybody else, knows that in America, there will be more and more four-cylinder engines replacing six-cylinder engines" because of new, stringent federal fuel-economy requirements.
In 2010, Chrysler was last among the eight largest automakers in the United States for corporate average fuel economy, a measurement of the combined fuel efficiency of the vehicles produced by each manufacturer. Chrysler's Italian partner, Fiat SpA, has promised to fix that by introducing new fuel-efficient small engines, advanced engine technology, and new small vehicles to Chrysler's product lineup by 2014. The bulk of that work is being and will be done in Dundee, where Global Engine is two engine plants under one roof.
It's original World Gas Engine line -- which produces 2.4-liter and 2.0-liter, four-cylinder versions of an engine originally developed among Hyundai, Mitsubishi, and what was then DaimlerChrysler Corp. -- is made in the northern half of the building and produces about 900 engines a day on each of its two 10-hour shifts.
The southern half of the building now produces about 400 copies per day of Fiat's 1.4-liter engine, a technology-laden four-cylinder currently used only in the North American version of the Fiat 500 subcompact being built in Mexico but expected to make its way into future Chrysler Group vehicles as well.
The 1.4-liter engine line now has about 100 employees, but the company will experiment this summer by adding half of a second shift on the line, with those workers expected to produce about half of the first shift's daily output.
The hiring is expected to be completed early next month, said Kevin Sell, who's been plant manager 18 months. Applicants should go to the plant's Web site, at www.gemaengine.com. In all, the Dundee facility has 380 employees.
Also this summer, the north plant will undergo a $150 million retooling to begin producing an improved, updated version of the 2.4-liter World Gas Engine. Chrysler officials wouldn't confirm details of the new engine, but analysts and the Chrysler-centric Web site Allpar.com indicate that it is to be called "Tigershark" and employ Fiat technology to boost the current 173-horsepower output by as much as 25 percent while improving fuel efficiency by as much as 25 percent in certain applications.
"We're retooling on the fly, which is a challenge," Mr. Sell said.
Global Engine "is a great manufacturing facility, with great technology and that's very flexible," said Jeff Jowett, auto analyst with IHS Automotive in suburban Detroit.
Mr. Jowett said Chrysler's refocusing on its four-cylinder power plants is similar to what's being done by other automakers to improve fuel economy.
"They're moving further away from six-cylinder to four-cylinder engines to pick up fuel economy, and because the engines are starting to get more high-tech, the consumer isn't necessarily sacrificing performance in the process," he said.
New hires at the Dundee plant are exempt from the two-tiered wage system in place in Chrysler's current national agreement with the United Auto Workers, Chrysler spokesman Jodi Tinson said. The jobs pay an average wage of about $28 an hour.
But to even be considered for employment at Global Engine, prospective workers must hold either a two-year associate's degree or a journeyman's card from a recognized trade -- a requirement that dates back to the beginning of the plant. They also don't have transfer privileges into other Chrysler plants, just as workers from other plants don't have transfer rights into the Dundee engine factories, Ms. Tinson said.
"It's a big advantage," said Pat Goik, resident engineering lead for Chrysler's 1.4-liter engine program, which launched last year. When issues arise at a workstation, those on the line either have the technical acumen to fix the issue themselves, or suggest innovative ways that it might be fixed.
A good example is the way that many parts are delivered to assemblers on the line at many workstations. As the engine block moves down the line, it stops in front of a worker and a motorized tray slides out, presenting within easy reach of the assembler the part or parts to be added. After the part is taken, the tray retracts, and the engine moves down the line, starting the whole process over again.
The automated parts presentation system was suggested by workers at the plant and has worked very well since its implementation, Mr. Goik said.
Mike Crawford, who has been at the plant since July, 2004 and now occupies one of its few management roles, said the adoption of Fiat's World Class Manufacturing system has produced remarkable quality and efficiency gains -- even in a plant that was twice named the most productive engine plant in North America under its previous owners.
"It's a complete culture change. We thought we were very good before. We're better now," Mr. Crawford said.
Production quality issues are dealt with quickly and systematically, he said, and as a result, the percentage of engines that don't pass initial testing has been reduced dramatically since the Fiat manufacturing system was adopted. "We've improved quality by 35 percent, and we've reduced scrap from the plant by 40 percent since starting WCM."
The Fiat system is a comprehensive way to both measure and improve manufacturing practices and is similar to the famous LEAN manufacturing system developed by Toyota Motor Corp. World Class Manufacturing focuses efforts on reducing waste and improving management, reducing costs, and reducing workplace injuries and strains.
Twice a year, every Chrysler and Fiat plant undergoes a "WCM audit" that measures productivity and adoption of its core principles and is issued a score. Plants that achieve scores higher than 50 achieve "bronze" status, those above 60 achieve "silver," and above 70 achieve "gold."
Mr. Sell said the Dundee plant was in first place among former Chrysler plants after the spring audit at 43 points and is racing with the Windsor Assembly plant -- where the Dodge Grand Caravan and Chrysler Town & Country minivans are assembled -- to be the first in North America to achieve bronze status. Chrysler's Toledo Assembly complex is currently tied for third with an assembly plant in Belvidere, Ill., Chrysler officials said.
Of course, the engines coming from Global Engine are only part of Chrysler's long-term efforts to improve engine performance and fuel economy in its vehicles.
Last year, the automaker introduced its 3.6-liter Pentastar engine in the 2011 Jeep Grand Cherokee. The six-cylinder engine is destined to replace an aging 3.8-liter six-cylinder in the 2012 Toledo-made Jeep Wrangler as well as in a number of other high-volume vehicles in Chrysler's product portfolio.
The Pentastar's broadening use caused Chrysler last week to make moves toward investing $114 million into its former Trenton North engine plant in downriver Detroit. It is expected add up to 250 employees to boost production of the popular V6 engine to keep up with demand. The automaker has another 6-cylinder-engine plant in Mexico.
The company also invested heavily with technology partner ZF Friedrichshafen AG, which will produce new eight-speed and nine-speed transmissions for a number of Chrysler vehicles to further boost fuel economy ratings.
"The whole idea of marrying [Chrysler] with Fiat was to supplement their larger vehicles with smaller vehicles," said Jay Baron, president of the Center for Automotive Research in Ann Arbor. "Within each individual [vehicle] segment, they're not the leader in terms of fuel economy."
Because Chrysler's current product portfolio is heavily weighted to light trucks and sport utility vehicles, Chrysler could be disadvantaged by federal regulators if the automaker doesn't change its product mix.
"They have some catching up to do," said Kristin Dziczek, director of labor and industry group at the Center for Automotive Research.
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