UPDATE 1-Ford invests $135 mln in Michigan plants, add jobs

* Ford adding 220 Michigan assembly and engineering jobs

* Ford $135 mln investment includes $62.7 mln DoE grant

* May US auto industry sales low to mid 11 mln annual rate (Combines details on Ford’s plant investments, jobs and May U.S. industry sales forecasts)

YPSILANTI, Mich, May 24 (Reuters) - Ford Motor Co F.N plans a $135 million investment in two Michigan-area plants to assemble battery packs and transaxles for new hybrid vehicles in 2012, adding 170 jobs, some likely at a new lower entry level wage.

Ford’s president of the Americas, Mark Fields, also said on Monday that U.S. auto industry sales were running in the low to mid 11 million-unit annualized rate favored by economists, a double digit increase from May 2009.

Ford, which has said it expects to be solidly profitable in 2010, plans to hire 130 workers at a plant in Sterling Heights, Michigan, to make electric drive transaxles now built in Japan. It will also add 40 positions at a plant in Ypsilanti, Michigan, to make battery packs now assembled in Mexico by suppliers.

The automaker further plans to hire more than 50 electric vehicle engineers in Dearborn and Livonia, Michigan, to develop battery packs and electric-drive transaxles for new lithium-ion battery powered hybrids planned for production in 2012.

In January, Ford said it would bring production of lithium-ion battery packs to Michigan from Mexico and bring in house the design and development of hybrid battery systems.

Ford has not disclosed the new lithium-ion battery powered hybrid vehicles for these components, but has said they will be on built on Focus- and Fusion-sized global platforms.

The hybrids are part of Ford’s plan to produce five electric, hybrid or plug-in hybrid vehicles in North America by 2012 and in Europe by 2013.

Ford plans to launch an electric Transit Connect small van in North America this year and electric Ford Focus compact car in 2011. The Focus will be built at its Michigan assembly plant that had produced sport-utility vehicles.

The automaker said it plans to invest $125 million at the Sterling Heights plant, including some $62.7 million of grants from the U.S. Department of Energy. Ford is investing $10 million at its Rawsonville plant in Ypsilanti.

The assembly jobs likely will be filled starting in late 2011 and first will be offered to workers who are on layoff. With that number slipping to about 450 currently, and Ford adding workers at other plants in North America before then, new hires at a negotiated lower entry level wage are possible.

Ford President of the Americas Fields said new hires at the lower wage were “probably likely” at the plants under its agreement with the United Auto Workers.

Separately, Fields told reporters after an event at Ford’s Rawsonville plant that the automaker expects May U.S. auto industry sales to have a “double-digit increase” year-over-year with the Memorial Day selling weekend still a wild card.

That would put sales in the low to mid 11 million unit annualized rate used by economists, including medium and heavy trucks, Fields said.

A rate at that level would mean that U.S. auto industry sales are running below Ford’s full-year forecast for 11.5 million to 12.5 million vehicles and have been for four of the first five months of the year.

“We’ve had a very balanced performance for most of this year between cars, trucks and utilities and crossovers,” he said of Ford’s sales. “I think we will see another balanced performance.” (Reporting by David Bailey; Editing by Steve Orlofsky)