TRENTON, MI – Chrysler Group’s new Phoenix Engine Plant will usher in the next level of manufacturing efficiency for the auto maker, a high-ranking executive says at a groundbreaking for the $730 million facility here.

The 822,000-sq.-ft. (76,364-sq.-m) plant will have capacity for 400,000-440,000 engines annually when production begins with a multi-shift operation sometime in 2009.

Employment at the facility will reach 485 people once fully operational, Chrysler says, about 30% of the total on the payroll at the adjacent, 55-year-old Trenton Engine Plant, which boasts 1,630 workers.

The Phoenix facility will employ “volume-bundled” parts-purchasing and capital-investment strategies, as well as standardized tooling, Chrysler says.

Work procedures and manufacturing processes will go a step beyond how the auto maker operates its Global Engine Mfg. Alliance plant in Dundee, MI, hailed as having one of the industry’s most innovative labor agreements with the United Auto Workers.

“This plant will be more CNC (computer-numerically-controlled machinery) based, more automated, than GEMA,” Frank Ewasyshyn, executive vice president-manufacturing, tells reporters following the groundbreaking ceremony. “It will be more flexible, have a different layout and different process and industrial controls than in the past.

“This is the first full implementation of our ‘Smart Manufacturing (system),’” he says.

The new Phoenix V-6 is a modular design that will be offered in several displacements and configurations, likely including both longitudinal and transverse versions for rear- and front-drive applications, respectively.

A second U.S. manufacturing plant is expected to build the engine, possibly Chrysler’s Kenosha, WI, facility. DaimlerChrysler AG is likely to produce the engine in Germany for Mercedes-Benz, as well.

The Phoenix facility will start with one version of the new engine, Ewasyshyn says, declining to identify the exact displacement or application for the powerplant. Whether additional versions are added into the mix will depend on where federal fuel-economy regulations head, how high gas prices go and “what the customer wants,” he says.

The Phoenix engine ultimately will replace the V-6s currently produced at Trenton, which includes the 4L used in the Chrysler Pacifica and Dodge Nitro and the 3.3L and 3.8L engines offered in Chrysler minivans.

Other V-6s in the Chrysler portfolio are the 3.5L and 2.7L engines manufactured at the Kenosha plant and available in the Chrysler 300. A 3.7L V-6 is made at Chrysler’s Mack Ave. plant in Detroit and used in several SUVs.

Chrysler isn’t saying when or how production of the older engines will be wound down, but once that happens the auto maker will have reduced its V-6 engine architectures from four to just one.

The new facility is located on the southwest corner of the existing Trenton plant property. It will house crankshaft, cylinder block and cylinder head machining operations, plus final assembly.

The groundbreaking ceremony was the second this week for Chrysler, which earlier launched construction of a $700 million axle plant in Marysville, MI. That facility will employ 900 people when it reaches full volume of 1.2 million axles annually in 2010. It replaces Chrysler’s 90-year-old Detroit Axle Plant that employs more than 1,600 workers.

The two investments are part of $1.78 billion Chrysler will pour into Michigan operations as part of its $3 billion powertrain strategy announced in February.

dzoia@wardsauto.com