BELVIDERE, Ill. -- In the car industry, the Chrysler assembly plant here in the farmland west of Chicago is known for an infamous gaffe. In 2001, DaimlerChrysler AG's U.S. arm had a hot new model in the retro-styled PT Cruiser, built at a plant in Mexico. With orders pouring in, Chrysler hoped to boost output by assembling some in Belvidere, where it made the Dodge Neon, a small car that used many of the same parts.

But Belvidere could make only Neons. Chrysler engineers discovered that the PT Cruiser was an inch too tall to fit through the plant's paint shop. Chrysler, which was losing money at the time, ended up spending $300 million to expand the assembly line at the PT Cruiser plant in Toluca, Mexico.

Meanwhile, Chrysler took another hit at Belvidere: Because Neon sales were slow, it had to cut production there, leaving the Illinois plant's assembly line operating just eight hours a day. The rest of the time, hundreds of millions of dollars in equipment sat idle.

Determined not to make such a mistake again, Chrysler rethought how it assembles cars, looking at everything from the order in which door parts are welded together to whether it's cheaper to install windshields manually or by machine. The result is a new, flexible assembly system that Chrysler is betting can transform the company's economics. Its central feature is the ability to make more than one type of vehicle at a plant.

If the new system, which entails more robots, is successful, it should enable the Chrysler unit of DaimlerChrysler to increase profits despite a relatively high-cost unionized U.S. work force. Even as unionized rivals General Motors Corp. and Ford Motor Co. gush red ink in their North American operations and prepare to buy out or lay off a total of 60,000 workers, Chrysler is profitable and has been recalling some laid-off employees.

Belvidere ran at about half-capacity last year, with its fixed costs spread out over just 126,000 Neons, a car Chrysler stopped making last fall. With the new system, the plant makes two models, the Dodge Caliber and Jeep Compass, both new. Last month Belvidere added a second production shift. A third model will join the mix later this year, and Belvidere will be on course to produce twice as many vehicles as in 2005. That will slash each one's share of fixed costs.

Chrysler's move is part of a broad shift in thinking that has been rippling through the auto industry for years, but is now starting to bring big changes.

For decades, mainstream models such as the Ford Taurus sold in such large volumes they could keep a plant or two running at full capacity for years. Not only was the plant limited but so was its costly equipment, much of which had to be scrapped when the model was dropped.

But mega-selling cars now are rare, especially for Detroit's Big Three. Car companies are trying to tap into buyers' appetites by offering a wider array of models -- SUVs of all sizes and levels of luxury, sporty new roadsters and so forth. Ford replaced the Taurus not with one new model but three. The number of models of cars and light trucks in the U.S. market rose to 286 last year from 181 in 2000. Most passenger cars in the U.S. sell just 75,000 to 150,000 a year.

That's too few to keep a plant running full steam, and an argument for giving plants flexibility. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. were early in equipping many U.S. plants to build more than one model. But Ford and GM have been slow to do so. GM has four plants making small cars for its Chevrolet, Saturn and Pontiac brands, about 410,000 vehicles a year in all. It could conceivably produce that many with a single flexible plant.

The Detroit companies produce fewer than half their vehicles on flexible lines. The lowest level among the three big Japanese firms is Honda's 69 percent, says a report by Prudential Equity Group. Of Detroit's Big Three, Chrysler now is moving the fastest to adopt the Japanese approach.

Chrysler can use the cost edge it thus gains to be more competitive on price. The base price of its new Jeep Compass, a small sport-utility vehicle, will be $15,985, about $3,000 less than the competing Toyota RAV4. For the Dodge Caliber, a small hatchback that uses some of the same parts as the Compass, the starting price is $13,985. That's about $200 less than the Neon was even though the Caliber is more advanced, offering features such as side airbags and a beverage cooler in the glove compartment.

Chrysler, which went through its own profitability crisis in 2000 and 2001 and pulled out of it, still faces big challenges. It has had to offer big discounts on some slow-selling models this year. Its Jeep Commander, a seven-passenger SUV, had such a slow start that Chrysler had to store unsold ones at Detroit's airport.

The Caliber is selling well, but Detroit traditionally finds profits scarce in small vehicles such as this one, classed as a hatchback or compact wagon. With sales of full-size SUVs falling as a result of high fuel prices and shifting tastes, Chrysler needs to find a way to make money on small cars.

It will add another small Jeep, the just-unveiled Patriot, to the mix at Belvidere later this year. If any of the three models made there becomes a hit, Belvidere may go to round-the-clock production and generate substantial profits. "If we only did one of those three models, Belvidere wouldn't be here today," says Chrysler chief Thomas LaSorda.

Besides Belvidere, Chrysler plans a makeover later this year in a plant in Sterling Heights, Mich., that builds midsize cars. Its eventual goal is to be able to shift production back and forth between Belvidere and Sterling Heights to keep both at near capacity. When both have been retooled, Chrysler will have 78 percent of its capacity on flexible lines, more than Toyota and Honda and trailing only Nissan's 88 percent, according to Prudential.

The most noticeable elements at Belvidere are hundreds of bright orange robots. They look nothing like the humanoid machines of Hollywood films, nor are they much like the big house-sized mechanisms seen in auto plants a decade or more ago. About 15 feet tall, each robot is essentially a large mechanical arm attached to a base. Each arm has a kind of hand, a grid of metal bars designed to hold the parts.

The robots can quickly exchange one of these devices, or "end effectors," for another, the way a human being would put down a wrench and pick up a hammer. By switching end effectors, the robots can produce a different car.

The robots are a third less expensive than old-style tooling. And since they aren't designed to build a single vehicle, and discarded when it's dropped, the robots can be expected to stay in use about twice as long, perhaps 10 to 12 years.

"Watch," said Frank Faga, the executive in charge of setting up the system in Belvidere, shouting over the whir of a dozen robots assembling doors on a recent day. He pointed to a pole with four colored lights that told workers which car was being produced. A blue light came on. "That means Caliber," he shouted, and a worker set a reinforcing beam for the hatchback in a rack.

A robot picked up the beam, turned and held it against the inner panel of a door held by a second robot. A third robot leaned in and welded them together in a shower of sparks. Other robots brought in the outer panel, and more sparks flew. In 42 seconds, the door was done.

A yellow light came on. "Now we're doing Compass," Mr. Faga yelled. Each robot turned and hung up the Caliber "hand" on a stand and picked up a tool engineered to fit the creases and contours of Compass doors. Sparks flew again and a Compass door was produced.

"We just went from making one model to another," Mr. Faga said. "No changing the tools, no downtime."

Mr. Faga's path to Belvidere was convoluted. He began his career laying out plants at GM in the '80s, including a joint venture with Suzuki Motor Corp. in Canada where GM managers learned lessons about efficient Japanese methods. Next came a plant in Germany where GM put the lessons to use. At both, he worked under Mr. LaSorda, a manufacturing engineer then rising in the ranks at GM.

Mr. LaSorda jumped to Chrysler in 2000, and after the PT Cruiser blunder, he turned to a veteran Chrysler manufacturing executive, Frank Ewasyshyn, a fellow Canadian and college acquaintance. Mr. Ewasyshyn, now executive vice president for manufacturing, began touring auto factories and machinery makers around the world in search of a more flexible way to make cars.

Robots had long had a role in auto plants, but limited by their inability to handle larger parts and by their expense. By this time, industrial robots were becoming commoditized and their prices were falling. In 2003, Chrysler asked robot maker ABB Ltd., of Zurich, to set up an entire body shop for Belvidere using robots -- a total of 777. The job of coordinating it went to Mr. LaSorda's old GM colleague, Mr. Faga, who had come to Chrysler a few years before.

Climbing into a golf cart to tour the Belvidere plant, Mr. Faga said the new process sharply cuts costs. The plant's body shop, where the underbody is assembled and where the robots are used, cost Chrysler $419 million. A traditional body shop, company officials say, would have cost more like $600 million.

Another saving came from standardizing processes. Building more than one model on the same line means the cars all have to be assembled the same way even if their pieces are slightly different.

In the past, each plant had its own method, each with inefficiencies. For Belvidere, engineers hammered out a process that will become the template for almost all Chrysler plants. "If you put the doors on at the third step with one model, you have to put the doors on at the same place with the other, too," Mr. Faga said.

The engineers found that it's cheaper to have windshields installed by workers than with automated equipment. By contrast, instrument panels, which Belvidere used to assemble, now are outsourced. The plant installs the panels early, before a car's doors go on, reducing costs and production time.

At one workstation, several robots work together to fold over the metal edge of car doors, known as hemming. Amidst the robots is a platform in the shape of a plus sign that can shuttle doors from four different models into the center to be hemmed. In the past, a two-story-tall press costing several hundred thousand dollars did this job, and was dedicated to one model. To do more than one, Chrysler would have had to either get two of these giant machines or stop production to switch several heavy parts.

In all, the new robotic body shop has 180 workstations, about half as many as in the old process. Mr. Faga pulled up to a workstation where a cluster of 20 robots was welding, gluing together and sealing support beams, roofs and side panels. The task used to take five workers. "Now," he said, holding up an index finger, "I've got one. At this one workstation, that's an 80 percent reduction in labor."

That change underscores the other challenge of switching to flexible production: Persuading workers to accept it.

For them, the system brought dramatic changes. After the Belvidere plant cut back to one shift in 2001, its future was in doubt, particularly as Chrysler was closing plants at the time.

Along with new equipment, Chrysler wanted to install a new way of organizing workers. Years ago, it might have faced a big challenge in getting the United Auto Workers to go along. This time, union leaders at the plant were receptive to change if it held the hope of keeping the plant open. Now, workers at Belvidere are organized into teams of six or eight. They rotate among different jobs during the day and are responsible for how their work area is set up, something that in the past was dictated by management.

"Nobody wants to go back to the old way," said Maria Medina, part of Team 5 in the chassis area. Laid off for several years, she was called back on the second shift and named leader for her team.

The robotic process has cut by about 10 percent the number of workers in the Belvidere body shop. But total employment at the plant as a whole is up because of the 1,000 workers brought on for the second shift. Among them were Ms. Medina and more than 600 others who had been in the Jobs Bank, a program in which union workers draw their pay even if there's no work for them. Being back on the job, she said, "feels awesome."

Later, pausing over a salad during a short flight on the company jet, the Chrysler CEO framed the advantage of flexible production in a different way. If the Caliber doesn't sell well, he said, the Jeep Compass and Patriot could take up capacity, and eventually a fourth model will be built, too. Flexible production, he said, "gives us a wider margin of error."