* Morgan Stanley to run sale of traffic systems, solar units - source
* Citi to help sell postal automation and baggage handling - sources
* Transactions set to launch in second quarter
FRANKFURT, Feb 8 (Reuters) - Siemens AG is set to shortly start the sale of several units as part of its efforts to streamline operations and stay competitive in a weak global economy, people familiar with the matter said.
Siemens, which ranks as Germany's second-most valuable company and which makes products ranging from trains to hearing aids, has mandated banks for the disposal of its solar unit, its traffic system operations, as well as its postal automation and baggage handling businesses, they said.
The transactions are set to launch in the second quarter, the sources added.
The divestments are part of a plan announced last year to shed several units in a bid to focus on its most profitable businesses as Siemens aims to put itself in a better position to compete in core product areas with the likes of Switzerland's ABB and U.S.-based General Electric.
Morgan Stanley has been chosen to run the auction of the solar unit and the traffic system operations, one of the sources said.
Siemens picked Citi to organise the divestment of its postal automation and baggage handling businesses, other sources said.
Last month, Siemens mandated Goldman Sachs to handle the sale of its Water Technologies units and Rothschild to oversee the divestment of the security products arm.
The postal automation and baggage handling businesses have combined revenue of about 900 million euros ($1.2 billion), a mid-single-digit profit margin and around 3,600 employees. Siemens does not provide standalone figures for postal automation.
U.S. group Pitney Bowes, Northrop Grumman's French subsidiary Solystic and Dutch group Vanderlande are seen as possible bidders, the sources said.
The postal unit - which counts the U.S. Postal Service and Deutsche Post among its customers - has benefited from growing demand for parcel sorting equipment as consumers have been shifting more and more of their shopping to the internet from brick-and-mortar stores.
The baggage handling unit makes both software to track pieces of luggage and mechanical handling equipment such as conveyor belts used in airports. It has installed more than 300 baggage handling systems at airports all over the world.
The traffic systems unit makes control technology for traffic and car parks, it has annual sales of about 300 million euros. It is so far focused on Europe and North America, while biggest demand is expected from Asian countries which are experiencing strong urbanisation.
The solar energy operations up for sale are the solar thermal power plant maker Solel and the photovoltaics unit. They have a total 680 employees and made a loss of 241 million euros in the fiscal year 2012, on revenues of 199 million euros.