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Ford - moving to create a center of excellence in Michigan for vehicle electrification - has announced it is investing $135 million to design, engineer and produce key components for the company’s next-generation hybrid-electric vehicles. Ford engineers in Dearborn will design the battery packs, while engineers in Livonia will design electric-drive transaxles.

Japanese electronics maker Hitachi has announced it will supply lithium-ion batteries for hybrid vehicles to General Motors from next year.

By Peter BohanU.S. auto sales dropped by 18 percent in 2008 to a 16-year low of 13.2 million, pushing financially strapped General Motors and Chrysler to the brink of collapse.