TOWER AUTOMOTIVE INC, S-3, 1997-02-18

TOWER AUTOMOTIVE INC
S-3, 1997-02-18
METAL FORGINGS & STAMPINGS

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 18, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------

TOWER AUTOMOTIVE, INC.

(Exact name of Registrant as specified in its charter)
--------------------------

<TABLE>
<S> <C>
DELAWARE 41-1746238
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>

4508 IDS CENTER
MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 342-2310

(Address, including zip code, and telephone number, including area code, of
Registrant's principal offices)

ANTHONY A. BARONE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
TOWER AUTOMOTIVE, INC.
6303 28TH STREET S.E.
GRAND RAPIDS, MICHIGAN 49546
TELEPHONE: (616) 954-7600

(Name, address, including zip code, and telephone number, including area code,
of agent for service)

COPIES TO:

<TABLE>
<S> <C>
CARTER W. EMERSON, ESQ. DEWEY B. CRAWFORD, ESQ.
Kirkland & Ellis Gardner, Carton & Douglas
200 East Randolph Drive 321 North Clark Street
Chicago, Illinois 60601 Chicago, Illinois 60610-4795
(312) 861-2052 (312) 245-8422
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
--------------------------

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
- ----------------

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
- ----------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
--------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1) REGISTRATION FEE
<S> <C> <C>
Common Stock, par value $.01 per share......................................... $496,049,625 $150,318
</TABLE>

(1) Estimated solely for the purposes of determining the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, and
based on the average of the high and low sales prices on February 14, 1997,
as reported on the Nasdaq National Market.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 18, 1997

PROSPECTUS
, 1997

10,090,000 SHARES

TOWER
AUTOMOTIVE

COMMON STOCK

Of the 10,090,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), being offered (the "Offering"), 8,500,000 shares are being sold
by Tower Automotive, Inc. (the "Company"), and 1,590,000 shares are being sold
by the Selling Stockholders. See "Selling Stockholders." The Company will not
receive any part of the proceeds from the sale of shares by the Selling
Stockholders. The Common Stock is traded on the Nasdaq National Market under the
symbol "TWER." On February 14, 1997, the last reported sale price of the Common
Stock on the Nasdaq National Market was $42.00 per share. Effective February 19,
1997, the Common Stock will begin trading on the New York Stock Exchange under
the symbol "TWR." See "Market Price of Common Stock."

SEE "RISK FACTORS" BEGINNING ON PAGE 10 OF THIS PROSPECTUS FOR INFORMATION
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRICE UNDERWRITING PROCEEDS PROCEEDS TO
TO THE DISCOUNTS AND TO THE THE SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
- --------------------------------------------------------------------------------
Per Share.............. $ $ $ $
Total(3)............... $ $ $ $
- --------------------------------------------------------------------------------
</TABLE>

(1) THE COMPANY AND THE SELLING STOCKHOLDERS HAVE AGREED TO INDEMNIFY THE
UNDERWRITERS AGAINST CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SEE "UNDERWRITING."

(2) BEFORE DEDUCTING ESTIMATED EXPENSES OF $ WHICH WILL BE PAID BY THE
COMPANY.

(3) THE COMPANY HAS GRANTED TO THE UNDERWRITERS AN OPTION, EXERCISABLE WITHIN 30
DAYS HEREOF, TO PURCHASE UP TO AN AGGREGATE OF 1,513,500 ADDITIONAL SHARES
OF COMMON STOCK AT THE PRICE TO THE PUBLIC, LESS UNDERWRITING DISCOUNTS AND
COMMISSIONS, SOLELY TO COVER OVER-ALLOTMENTS, IF ANY. IF SUCH OPTION IS
EXERCISED IN FULL, THE TOTAL PRICE TO THE PUBLIC, UNDERWRITING DISCOUNTS AND
COMMISSIONS AND PROCEEDS TO THE COMPANY WILL BE $ , $ AND
$ , RESPECTIVELY. SEE "UNDERWRITING."

The shares offered hereby are offered by the several Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that delivery of
the shares will be made in New York, New York, on or about , 1997.

DONALDSON, LUFKIN & JENRETTE PAINEWEBBER INCORPORATED
SECURITIES CORPORATION

ROBERT W. BAIRD & CO.
INCORPORATED

MORGAN STANLEY
& CO.
INCORPORATED

PIPER JAFFRAY INC.
<PAGE>
[Illustration depicting the principal products of the Company and APC]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE (THE "NYSE") OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS AND RELATED NOTES APPEARING ELSEWHERE OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL
INFORMATION IN THIS SUMMARY AND ELSEWHERE IN THIS PROSPECTUS ASSUMES THAT THE
UNDERWRITERS' OVER-ALLOTMENT OPTION HAS NOT BEEN EXERCISED. UNLESS THE CONTEXT
INDICATES OTHERWISE, AS USED IN THIS PROSPECTUS THE TERM "COMPANY" REFERS TO
TOWER AUTOMOTIVE, INC., ITS CONSOLIDATED SUBSIDIARIES AND THEIR RESPECTIVE
PREDECESSORS. THE COMPANY ACQUIRED TRYLON CORPORATION ("TRYLON") ON JANUARY 16,
1996 AND MASCOTECH STAMPING TECHNOLOGIES, INC. ("MSTI") ON MAY 31, 1996 AND
EXPECTS TO COMPLETE THE ACQUISITION OF SUBSTANTIALLY ALL OF THE ASSETS OF
AUTOMOTIVE PRODUCTS COMPANY ("APC"), A DIVISION OF A.O. SMITH CORPORATION ("A.O.
SMITH"), BY THE END OF APRIL 1997. SUCH ACQUISITIONS ARE REFERRED TO HEREIN AS
THE "TRYLON ACQUISITION," THE "MSTI ACQUISITION" AND THE "APC ACQUISITION,"
RESPECTIVELY. UNLESS OTHERWISE INDICATED, FINANCIAL AND OPERATING DATA PRESENTED
HEREIN FOR 1996 ON A PRO FORMA BASIS GIVE EFFECT TO THE MSTI ACQUISITION AND THE
APC ACQUISITION AS IF THEY HAD EACH OCCURRED ON JANUARY 1, 1996. SEE "UNAUDITED
PRO FORMA FINANCIAL STATEMENTS."

THE COMPANY

GENERAL

The Company is a leading designer and producer of high-quality body
structure components and assemblies used by the major North American automotive
original equipment manufacturers ("OEMs"), Ford, Chrysler and General Motors,
and certain foreign OEMs with manufacturing operations in North America
("Transplants"), including Honda, Toyota, Nissan and Mazda. The Company's
current products range from large structural stampings and assemblies, such as
body pillars, chassis, suspension and floor pan components and major housing
assemblies, to engineered assemblies, such as hood and deck lid hinges and brake
components. On January 27, 1997, the Company agreed to acquire A.O. Smith's APC
division, a leading manufacturer of light truck frames, automotive engine
cradles and other structural and suspension components, assemblies and modules
used by major North American OEMs and Transplants. Following the APC
Acquisition, the Company believes it will be the largest independent supplier of
structural components and assemblies to the North American automotive market.

Since its inception in April 1993, the Company's revenues have grown rapidly
through a focused strategy of internal growth and a highly disciplined
acquisition program. During the last three years, the Company has successfully
completed and fully integrated four acquisitions. As a result of such
acquisitions and internal growth, the Company's revenues have increased from
approximately $86 million in 1993 to approximately $474 million in 1996 (pro
forma only for the MSTI Acquisition), representing a compound annual growth rate
of approximately 76%. The Company's North American content per vehicle has
increased from $6.23 in 1993 to $26.74 in 1996 on an actual basis. The APC
Acquisition will be the Company's largest acquisition to date and will increase
the Company's pro forma revenues to approximately $1.3 billion and will increase
the Company's pro forma North American content per vehicle to $77.49 for 1996.

The Company operates in the large and highly fragmented structural segment
of the automotive supply industry, which has recently begun to undergo
significant consolidation. To lower costs and improve quality, OEMs are reducing
their supplier base by awarding sole-source contracts to full-service suppliers
who are able to supply larger portions of a vehicle on a global basis. OEMs'
criteria for supplier selection include not only cost, quality and
responsiveness, but also full-service design, engineering and program management
capabilities. OEMs are increasingly seeking suppliers capable of providing
complete systems or modules rather than suppliers who only provide separate
component parts. In addition, OEMs are increasingly requiring their suppliers to
have the capability to design and manufacture their products in multiple
geographic markets. As a full-service supplier with strong OEM relationships,
the Company

3
<PAGE>
expects to continue to benefit from these trends within the structural segment
of the automotive supply industry.

The Company's business objective is to capitalize on the consolidation,
globalization and system/ modular sourcing trends in the automotive supply
industry in order to enhance its position to be the leading provider of
structural and suspension components to OEMs worldwide. The Company's growth
strategy focuses on the identification and pursuit of (i) strategic
acquisitions; (ii) modular product opportunities; (iii) increased vehicle
penetration; and (iv) "world car" opportunities.

THE APC ACQUISITION

APC is a leading designer and producer of structural and suspension
components for the automotive, light truck and heavy truck markets. APC's
products include light truck frames, automotive engine cradles, suspension and
other components and heavy truck frame rails. In 1996, over 70% of APC's
revenues was derived from the sale of structural components for light trucks and
sport utility vehicles, a growing segment of the North American automotive
market. APC's customers include the three major North American OEMs as well as
certain Transplants, including Toyota, Nissan, Isuzu and Honda. APC's three
largest customers, Ford, General Motors and Chrysler, accounted for
approximately 46%, 23% and 20%, respectively, of APC's revenues in 1996.
Approximately 11% of APC's revenues in 1996 was derived from the production of
heavy truck frame rails for North American heavy truck OEMs. The Company
believes APC is the largest supplier in this segment, with a market share of
approximately 51% in 1996. APC conducts its operations through 15 facilities
which, when added to the Company's existing 19 facilities, will result in a
total of over seven million square feet of manufacturing floor space.

The Company believes that the APC Acquisition will provide the Company with
several strategic benefits, including the following:

EXPANDED PRODUCT OFFERINGS AND MODULAR PRODUCT OPPORTUNITIES. The APC
Acquisition will significantly expand the Company's product offerings by adding
lower body structural components to the Company's existing line of upper body
structural components. In addition, APC's products provide an ideal platform for
developing modular product offerings for the Company's customers. APC's frame
and engine cradle products can be combined with a number of the Company's
existing product offerings, including control arms, suspension components,
exhaust hanger assemblies and spring towers and hangers to deliver more complete
systems or modules to its OEM customers at a lower overall cost. The Company
believes that the APC Acquisition will enable it to supply its customers with
the broadest array of structural metal components in the automotive industry and
that its resulting ability to produce a larger portion of a vehicle will afford
it significant opportunities to increase revenues as OEMs continue to
consolidate their supplier base. See "Business--Industry Trends."

INCREASED CUSTOMER PENETRATION. The APC Acquisition will significantly
expand the Company's penetration within each of the three major North American
OEMs. Following the APC Acquisition, the Company believes it will be the largest
supplier of structural components to Chrysler, the largest supplier of metal
components to Ford and a major supplier of structural components to General
Motors. The APC Acquisition will also expand the Company's penetration within
certain Transplants by doubling the Company's sales to Toyota, expanding its
already significant position at Honda, increasing sales to Nissan and adding
Isuzu as a new customer.

INCREASED PENETRATION IN LIGHT TRUCK SEGMENT AND OTHER KEY MODELS. The APC
Acquisition will increase the Company's North American content per vehicle from
$26.74 in 1996 to $77.49 on a pro forma basis and will triple the Company's
content per vehicle in the expanding light truck/sport utility market segment,
which segment represented approximately 60% of the Company's pro forma revenues
for 1996. The APC Acquisition will increase the Company's content per vehicle on
key vehicles such as the Ford Explorer and Ranger and the Chrysler Dakota,
Durango and Ram as well as on high volume passenger

4
<PAGE>
cars such as the Ford Taurus/Sable and the Chrysler Intrepid/Concorde/Vision.
The Company believes that this increased model penetration will afford it
greater opportunities to supply additional parts and modules for such models.

COMPLEMENTARY NEW TECHNOLOGY. The APC Acquisition will provide the Company
with a variety of new and enhanced design and manufacturing technology,
including APC's patented three piece side rail frame and patented Simulform-TM-
forming technology, the latter of which may result in cost savings and quality
improvements over conventional stamping technology in certain specialized
applications. In addition, APC's existing hydroforming technology complements
the Company's initiatives in this area. The APC Acquisition will also provide
the Company with additional painting, coating and welding technologies and
advanced logistical parts management systems. The Company believes that these
acquired technologies will provide significant additional opportunities to serve
existing customers and obtain new business.

OPERATIONAL EFFICIENCIES. The APC Acquisition will provide the Company with
a number of opportunities to reduce costs and improve operational efficiency.
For example, APC currently outsources many of its stamping needs, some of which
will be able to be supplied by the Company's existing stamping facilities. In
addition, the Company's and APC's facilities are geographically located in such
a way as to allow the Company to optimize their management and logistical
capabilities on a regional basis. APC's facilities are strategically located
close to many of its and the Company's major customers, allowing for inventory
and freight cost-savings. The increased size of the Company may also improve the
Company's ability to negotiate more favorable terms on its purchasing and supply
contracts, as well as achieve other operational cost savings.

EXPANDED GLOBAL CAPABILITIES. OEMs are increasingly demanding that their
suppliers have global production capabilities. APC's presence in China, Japan
and South America complements the Company's current European initiatives to
provide expanded global production capabilities for both North American and
international OEMs. See "Business--Global Initiatives."

The aggregate purchase price of APC is approximately $625 million, plus an
additional $25 million for related fees and expenses and management's estimate
of certain post-closing adjustments. The Company expects to complete the APC
Acquisition by the end of April 1997. Pursuant to the terms of the purchase
agreement, the Company may elect not to complete the APC Acquisition if there is
a material adverse change in the operating results or financial condition of APC
prior to the closing date. If the APC Acquisition is not completed, the shares
of Common Stock offered hereby would represent an ownership interest in the
Company as it exists on the date hereof and not of the Company as combined with
APC. In such an event, the net proceeds of the Offering will be used for general
corporate purposes, which may include repayment of existing indebtedness,
acquisitions or capital expenditures. See "Risk Factors-- Consummation of the
APC Acquisition."

5
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered by the Company.... 8,500,000 shares(1)

Common Stock Offered by Selling
Stockholders......................... 1,590,000 shares
Total.............................. 10,090,000 shares

Common Stock to be Outstanding after
the Offering......................... 22,838,050 shares(2)

Use of Proceeds........................ The net proceeds to be received by the Company from
the Offering are expected to be used to pay a
portion of the cash purchase price of the APC
Acquisition. The Company will not receive any
proceeds from the sale of the shares by the
Selling Stockholders. See "Use of Proceeds."

New York Stock Exchange Symbol......... TWR(3)
</TABLE>

- --------------------------

(1) Does not include the Underwriters' over-allotment option granted by the
Company for an aggregate of 1,513,500 shares of Common Stock.

(2) Does not include: (i) 1,022,227 shares of Common Stock reserved for issuance
under the Company's stock option plans and employee stock discount purchase
plan, of which options to purchase 270,750 shares were outstanding; (ii)
102,984 shares issuable upon the exercise of stock options issued in
connection with the acquisition of Edgewood Tool and Manufacturing Company
and its affiliate; (iii) 407,743 shares issuable upon conversion of
convertible subordinated notes issued in connection with the acquisition of
Edgewood (the "Convertible Notes"); and (iv) 200,000 shares issuable upon
the exercise of outstanding warrants issued to MascoTech, Inc. ("MascoTech")
in connection with the MSTI Acquisition (the "Warrants").

(3) Effective February 19, 1997, the Company's Common Stock will begin trading
on the NYSE. Prior thereto, the Common Stock has traded on the Nasdaq
National Market under the symbol "TWER."

RISK FACTORS

In analyzing an investment in the Common Stock offered hereby, prospective
investors should carefully consider, along with other matters referred to
herein, the risk factors described herein under "Risk Factors."

6
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL AND OTHER DATA OF THE COMPANY

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
PRO FORMA
AS ADJUSTED
1994 1995 1996(1) 1996(2)
(IN THOUSANDS, EXCEPT PER SHARE AND PER VEHICLE
AMOUNTS)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................................... $ 165,526 $ 222,801 $ 399,925 $ 1,323,105
Gross profit........................................... 22,540 37,413 61,635 181,958
Operating income....................................... 14,302 21,920 39,440 114,078
Net income............................................. 7,361 12,071 20,637 52,680
Net income applicable to common stockholders........... 7,476 12,247 20,765 52,808
Net income per common and common equivalent share...... $ 0.86 $ 1.05 $ 1.55 $ 2.25
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
Weighted average common and common equivalent shares
outstanding.......................................... 8,720 11,697 13,423 23,432

OTHER DATA:
Capital expenditures, net.............................. $ 28,524 $ 26,148 $ 16,253 $ 167,787
EBITDA(3).............................................. 18,440 28,469 52,194 166,976
North American content per vehicle(4).................. 10.83 14.92 26.74 77.49
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
--------------------------
PRO FORMA
ACTUAL AS ADJUSTED(5)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital.................................................................... $ 81,535 $ 118,151
Total assets....................................................................... 398,607 1,203,073
Total debt......................................................................... 114,182 389,182
Stockholders' investment........................................................... 181,877 520,377
</TABLE>

- --------------------------

(1) Includes the results of operations of MSTI from the date of acquisition, May
31, 1996.

(2) The unaudited pro forma as adjusted statement of operations data reflect:
(i) the MSTI Acquisition (including related financing transactions); (ii)
the APC Acquisition; (iii) the sale by the Company of 2,232,900 shares of
Common Stock in June 1996 (the "1996 Offering") and the application of the
proceeds therefrom; (iv) the refinancing of the Company's existing credit
agreement (the "Existing Credit Agreement") and the redemption of the
Company's senior notes (the "Senior Notes") in connection with the APC
Acquisition; and (v) the Offering and the application of the net proceeds to
the Company as described in "Use of Proceeds," as if such transactions had
occurred on January 1, 1996. The Company acquired Trylon on January 16,
1996. Results of operations of Trylon for the period January 1, 1996 through
the acquisition date are not material and therefore have not been included
in the Company's pro forma results of operations for the year ended December
31, 1996. See "Use of Proceeds" and "Unaudited Pro Forma Financial
Statements." Net income, net income applicable to common stockholders and
net income per common and common equivalent share are presented before
extraordinary loss on early extinguishment of debt.

(3) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by generally accepted accounting
principles ("GAAP"). The Company, however, believes it is widely accepted
that EBITDA provides useful information regarding a company's ability to
service and/or incur indebtedness. EBITDA does not take into account the
Company's debt service requirements and other commitments and, accordingly,
is not necessarily

(FOOTNOTES CONTINUED ON FOLLOWING PAGE)

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<PAGE>
indicative of amounts that may be available for discretionary uses. Set
forth below is certain cash flow information for the Company for the periods
indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
(IN THOUSANDS)
<S> <C> <C> <C>
Cash provided by (used in):
Operating activities...................................................... $ (10,375) $ 13,905 $ 30,049
Investing activities...................................................... (73,266) (34,054) (88,924)
Financing activities...................................................... 82,848 21,051 97,514
</TABLE>

(4) "North American content per vehicle" on an actual basis is the Company's
revenues divided by total North American vehicle production, which is
comprised of car and light truck production in the United States, Canada and
Mexico, as estimated by the Company from industry sources. Pro forma as
adjusted "North American content per vehicle" also includes the automotive
revenues of APC (excluding APC's heavy truck revenues).

(5) The unaudited pro forma as adjusted balance sheet data reflect: (i) the APC
Acquisition; (ii) the refinancing of the Company's Existing Credit Agreement
and redemption of the Senior Notes; and (iii) the Offering and the
application of the net proceeds to the Company as described in "Use of
Proceeds," as if such transactions had occurred on December 31, 1996. See
"Use of Proceeds," "Capitalization" and "Unaudited Pro Forma Financial
Statements."

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<PAGE>
SUMMARY HISTORICAL FINANCIAL AND OTHER DATA OF APC

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1994 1995 1996
(IN THOUSANDS, EXCEPT PER VEHICLE
AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................................................... $ 722,718 $ 845,305 $ 862,977
Gross profit............................................................... 97,952 95,174 92,882
Operating income........................................................... 63,931 57,741 55,649
Income before provision for income taxes................................... 59,880 52,384 48,820

OTHER DATA:
Capital expenditures, net (1).............................................. $ 59,023 $ 78,908 $ 151,534
EBITDA (2)................................................................. 98,031 99,562 106,417
North American content per vehicle (3)..................................... 39.23 48.25 50.75
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
1996
<S> <C>
BALANCE SHEET DATA:
Working capital................................................................................... $ 63,822
Total assets...................................................................................... 601,311
Parent company investment......................................................................... 392,614
</TABLE>

- ------------------------------

(1) APC made capital expenditures of $4.3 million and $63.1 million in the years
ended December 31, 1995 and 1996, respectively, to finance the construction
of and to purchase equipment for its new Plymouth, Michigan and Roanoke,
Virginia manufacturing facilities.

(2) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by GAAP. The Company, however,
believes it is widely accepted that EBITDA provides useful information
regarding a company's ability to service and/or incur indebtedness. EBITDA
does not take into account APC's debt service requirements and other
commitments and, accordingly, is not necessarily indicative of amounts that
may be available for discretionary uses. Set forth below is certain cash
flow information for APC for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
(IN THOUSANDS)
<S> <C> <C> <C>
Cash provided by (used in):
Operating activities......................................................... $ 41,510 $ 40,089 $ 92,554
Investing activities......................................................... (59,023) (82,658) (168,436)
Financing activities......................................................... 17,513 42,569 75,882
</TABLE>

(3) "North American content per vehicle" is APC's automotive revenues (excluding
heavy truck revenues) divided by total North American vehicle production,
which is comprised of car and light truck production in the United States,
Canada and Mexico, as estimated by the Company from industry sources.

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<PAGE>
RISK FACTORS

THIS PROSPECTUS, INCLUDING THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN,
CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"). ALSO, DOCUMENTS
SUBSEQUENTLY FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION") AND INCORPORATED HEREIN BY REFERENCE WILL CONTAIN
FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON THE
BELIEFS OF THE COMPANY'S MANAGEMENT AS WELL AS ON ASSUMPTIONS MADE BY AND
INFORMATION CURRENTLY AVAILABLE TO THE COMPANY AT THE TIME SUCH STATEMENTS WERE
MADE. WHEN USED IN THIS PROSPECTUS, THE WORDS "ANTICIPATE," "BELIEVE,"
"ESTIMATE," "EXPECT," "INTENDS" AND SIMILAR EXPRESSIONS, AS THEY RELATE TO THE
COMPANY OR APC, ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH
INCLUDE STATEMENTS RELATING TO, AMONG OTHER THINGS, (I) THE CONSUMMATION OF THE
APC ACQUISITION; (II) THE INTEGRATION OF THE OPERATIONS OF APC WITH THOSE OF THE
COMPANY; AND (III) THE STRATEGIC BENEFITS OF THE APC ACQUISITION. ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS
AS A RESULT OF THE RISK FACTORS SET FORTH BELOW, THE MATTERS SET FORTH OR
INCORPORATED IN THE PROSPECTUS GENERALLY AND CERTAIN ECONOMIC AND BUSINESS
FACTORS, SOME OF WHICH MAY BE BEYOND THE CONTROL OF THE COMPANY. THE COMPANY
CAUTIONS THE READER, HOWEVER, THAT THIS LIST OF FACTORS MAY NOT BE EXHAUSTIVE,
PARTICULARLY WITH RESPECT TO FUTURE FILINGS WITH THE COMMISSION. IN ANALYZING AN
INVESTMENT IN THE COMMON STOCK OFFERED HEREBY, PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER, ALONG WITH THE OTHER MATTERS REFERRED TO HEREIN, THE RISK
FACTORS DESCRIBED BELOW.

CONSUMMATION OF THE APC ACQUISITION

The Company expects to complete the APC Acquisition by the end of April
1997. Pursuant to the terms of the purchase agreement, the Company may elect not
to complete the APC Acquisition if there is a material adverse change in the
operating results or financial condition of APC prior to the closing date.
Although the Company does not expect such a change to occur, there can be no
assurance as to whether or when the APC Acquisition will be completed. If the
APC Acquisition is not completed, the shares of Common Stock offered hereby
would represent an ownership interest in the Company as it exists on the date
hereof and not of the Company as combined with APC. Therefore, if the APC
Acquisition is not consummated, the information set forth in this Prospectus
giving effect to the APC Acquisition would not be relevant.

Prior to the Offering, there were 14,338,050 shares of Common Stock
outstanding. Upon consummation of the Offering, there will be 22,838,050 shares
of Common Stock outstanding. If the APC Acquisition is not consummated, the size
of the Company will not increase, but the number of outstanding shares will
have, and thus the value of each share of the Common Stock would be
significantly diluted. The Company's net income per common and common equivalent
share before extraordinary item ("EPS") for 1996 on a pro forma basis would have
been $2.25 per share. If the APC Acquisition is not completed, the Company's EPS
for 1996 on a pro forma basis would have been $1.17 per share. In addition, the
net proceeds to the Company from the Offering are expected to be used to pay a
portion of the cash purchase price of the APC Acquisition. In the event the APC
Acquisition is not consummated, the Company intends to use the net proceeds of
the Offering for general corporate purposes, which may include repayment of
existing indebtedness, acquisitions or capital expenditures.

In connection with the APC Acquisition, the Company expects to enter into a
new credit agreement (the "New Credit Agreement") to finance a portion of the
APC Acquisition. The commitments of its bank lender under the New Credit
Agreement expire if the APC Acquisition is not consummated on or prior to April
30, 1997. If such commitments expire and are not renewed by such lender, the
Company would be required to seek alternative sources of financing. Although the
Company had commitments from two other lenders to provide the financing for the
APC Acquisition, there can be no assurance that the Company would be able to
secure such alternative financing or that such financing, if available, would be
on terms acceptable to the Company. If the Company does not consummate the APC
Acquisition because it fails to secure financing, the Company is required to pay
A.O. Smith a fee of $15.0 million. In addition, if the APC Acquisition is not
consummated by June 30, 1997, A.O. Smith's obligation to consummate the APC

10
<PAGE>
Acquisition will lapse and there can be no assurance that the Company will be
able to purchase APC on the terms disclosed herein, on terms acceptable to the
Company or at all.

RISKS ASSOCIATED WITH LEVERAGE

The APC Acquisition will significantly increase the Company's debt service
obligations. As of December 31, 1996 on a pro forma basis, the Company would
have had total outstanding long-term indebtedness of approximately $388.5
million, or 42.7% of the Company's total capitalization. The degree to which the
Company is leveraged could make it more difficult for the Company to adjust to
rapidly changing market conditions and could make it more vulnerable in the
event of a downturn in general economic conditions or its business. See
"Description of New Credit Agreement."

RELIANCE ON MAJOR CUSTOMERS AND SELECTED MODELS

Ford, Chrysler and General Motors accounted for approximately 67%, 10% and
4%, respectively, of the Company's revenues during 1996 and approximately 53%,
17% and 17%, respectively, on a pro forma basis. Although the Company and APC
have contracts with many of their customers, such contracts provide for
supplying the customers' requirements for a particular model, rather than for
manufacturing a specific quantity of products. The loss of any one of their
major customers or a significant decrease in demand for certain key models or a
group of related models sold by any of their major customers could have a
material adverse effect on the Company and APC. There is substantial and
continuing pressure from OEMs to reduce costs, including the cost of products
purchased from outside suppliers such as the Company and APC. Management
believes that the Company's manufacturing and engineering expertise and its
ability to control costs will allow the Company to remain competitive. Certain
of the Company's products are sold under long-term agreements that require the
Company to provide annual cost reductions to such purchasers (directly through
price reductions or indirectly through suggestions regarding manufacturing
efficiencies or other cost savings) by certain percentages each year. Although
the Company has been able to achieve a portion of such reductions through
production cost savings, there can be no assurance that the Company will be able
to continue to generate such cost savings in the future. If the Company were
unable to generate sufficient production cost savings in the future to offset
such price reductions, the Company's gross margin could be adversely affected.
See "Business--Customers and Marketing."

INDUSTRY CYCLICALITY AND SEASONALITY

The automotive market is highly cyclical and is dependent on consumer
spending. Economic factors adversely affecting automotive production and
consumer spending could adversely impact the Company. In addition, the Company's
business is somewhat seasonal. The Company typically experiences decreased
revenue and operating income during the third quarter of each year due to the
impact of OEM plant shutdowns in July for vacations and model changeovers. The
Company expects such seasonality to continue following the APC Acquisition. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition--Seasonality."

FAILURE TO REALIZE BENEFITS OF APC ACQUISITION

The Company believes the APC Acquisition will significantly enhance its
competitive position and business prospects. There can be no assurance, however,
that such benefits will be realized or that the combination of the Company and
APC will be successful. In addition, the Company expects to achieve cost savings
through the integration of the operations of APC with those of the Company.
There can be no assurance that the Company will not experience difficulties in
integrating the operations of APC with those of the Company or that the expected
cost savings will be realized. The integration of APC will require the
experience and expertise of certain key managers of APC who are expected to be
retained by the Company. There can be no assurance that the APC managers
retained by the Company will remain with the Company for the time period
necessary to successfully integrate APC into the Company.

11
<PAGE>
IMPORTANCE OF BUSINESS RELATED TO NEW AND REDESIGNED MODEL INTRODUCTIONS

The Company and APC principally compete for new business both at the
beginning of the development of new models and upon the redesign of existing
models by their major customers. New model development generally begins two to
five years prior to the marketing of such models to the public. The Company and
APC have been successful in obtaining significant new business on new models and
in supplying additional parts for existing models as they are redesigned by
their customers. The Company and APC have been awarded replacement business on
all of their major platforms through 1999, except that APC was not awarded the
replacement business for the General Motors C/K platform frame program beginning
in the 1999 model year. There can be no assurance, however, that the Company and
APC will continue to obtain such new business. The failure of the Company and
APC to obtain new business on new models or to retain or increase business on
redesigned existing models could adversely affect the Company. See
"Business--Competition."

RISKS ASSOCIATED WITH ACQUISITION STRATEGY

Acquiring businesses that complement the Company's existing business has
been and will continue to be an important element of the Company's strategy for
achieving profitable growth. There can be no assurance that suitable acquisition
candidates will be identified and acquired in the future, that financing for any
such acquisitions will be available on satisfactory terms, that the Company will
be able to accomplish its strategic objectives as a result of any such
acquisition or that any business or assets acquired by the Company will be
integrated successfully into the Company's operations. The Company is
continually evaluating possible acquisitions and engages in discussions with
acquisition candidates from time to time. The Company is not presently a party
to any acquisition agreement other than with respect to the APC Acquisition. See
"Business--Strategy."

COMPETITION

The automotive components supply industry is highly competitive. Some of the
competitors of the Company and APC, including certain divisions of its OEM
customers, are larger and have greater financial and other resources than the
Company and APC. Although management believes that the Company is well
positioned to continue to supply its products to OEMs, there can be no assurance
that the Company will be able to maintain its current competitive position. See
"Business--Competition."

ANTI-TAKEOVER PROVISIONS

Certain provisions of the Company's Amended and Restated Certificate of
Incorporation, which permit the Board of Directors to issue up to 5,000,000
shares of preferred stock without further stockholder approval, as well as
certain provisions of the Delaware General Corporation Law, could have the
effect of delaying, deterring or preventing a change in control of the Company.

POSSIBLE VOLATILITY OF STOCK PRICE

The public offering price per share of the Common Stock has been determined
by negotiations among the Company and representatives of the Underwriters based
in part on the trading price of the Common Stock on the NYSE and may not be
indicative of the price at which the Common Stock will trade after completion of
the Offering. In addition, the stock markets have from time to time experienced
extreme price and volume volatility. These fluctuations may be unrelated to the
operating performance of particular companies whose shares are traded. Market
fluctuations may adversely affect the market price of the Common Stock. The
market price of the Common Stock could be subject to significant fluctuations in
response to the Company's operating results and other factors, some of which may
be beyond the Company's control. There can be no assurance that the market price
of the Common Stock will not decline below the price at which the shares of the
Common Stock are sold in this Offering.

12
<PAGE>
THE COMPANY

The Company was formed to acquire R.J. Tower Corporation (the
"Predecessor"), the acquisition of which was completed in April 1993 (the "R.J.
Tower Acquisition") for an aggregate cost of approximately $26 million. Since
the R.J. Tower Acquisition, the Company has successfully completed and fully
integrated four strategic acquisitions:

EDGEWOOD. In May 1994, the Company acquired Edgewood Tool and Manufacturing
Company and its affiliate, Ann Arbor Assembly Corporation (collectively,
"Edgewood") for approximately $30 million in aggregate consideration. Edgewood
is a leading supplier of hood and deck lid hinges as well as structural
stampings and assemblies. The acquisition of Edgewood: (i) added engineered
mechanical stampings, primarily hood and deck lid hinges, and additional
structural components to the Company's product offerings; (ii) increased model
penetration with the Company's existing customers; and (iii) provided the
Company with a significant new customer, Mazda.

KALAMAZOO. In June 1994, the Company acquired Kalamazoo Stamping and Die
Company ("Kalamazoo"), a supplier of structural stampings and assemblies, for
approximately $12 million in cash. The acquisition of Kalamazoo added additional
structural components to the Company's product offerings and increased model
penetration with Ford.

TRYLON. In January 1996, the Company acquired Trylon from MascoTech for
approximately $25 million in cash, including transaction costs. The Trylon
Acquisition: (i) broadened the Company's product offerings to include small,
precision metal stampings and assemblies, which were previously outsourced to
third parties; (ii) established a relationship between the Company and General
Motors; and (iii) increased content on Ford models, primarily the Villager.
Trylon generated $47.9 million in revenues in 1995.

MSTI. In May 1996, the Company acquired MSTI from MascoTech for
approximately $79 million (including the payment of related fees and expenses),
plus additional earn-out payments if certain operating targets are achieved by
the MSTI facilities in the first three years following the acquisition. The MSTI
Acquisition: (i) expanded the Company's product capabilities into chassis and
suspension components; (ii) provided chassis and suspension technology as well
as value-added processing technologies including assembling, painting and
welding; and (iii) increased the Company's content per vehicle on key light
truck and sport utility vehicles such as the Ford F-Series, Explorer and
Windstar and the Chrysler Ram and Dakota as well as on high volume passenger
cars such as the Ford Taurus/Sable. MSTI had revenues of $152.9 million in 1995.

The Company completed an initial public offering (the "IPO") of its Common
Stock in August 1994 and the sale of an additional 2,232,900 shares in June
1996. The Company's principal executive offices are located at 4508 IDS Center,
Minneapolis, Minnesota 55402, and its telephone number is (612) 342-2310.

APC ACQUISITION FINANCING

The Company expects to complete the APC Acquisition by the end of April
1997. The aggregate purchase price of APC is approximately $625 million, plus an
additional $25 million for related fees and expenses and management's estimate
of certain post-closing adjustments. The Company has executed a commitment
letter with its principal bank lender pursuant to which such lender has agreed,
subject to the satisfaction of certain conditions, to enter into the New Credit
Agreement. The Company anticipates that the New Credit Agreement will provide
for (i) a six and one-half year term loan of up to $340 million (the "Term
Loan") and (ii) a six and one-half year revolving credit facility of up to $325
million (the "Revolving Credit Facility"). The Company intends to finance the
APC Acquisition by using the proceeds from this Offering and a portion of its
available borrowings under the New Credit Agreement. In the event that the
Offering has not been completed at the time of the consummation of the APC
Acquisition, an additional loan of up to $200 million will be made available to
the Company under the New Credit Agreement. This

13
<PAGE>
loan would have a term of 18 months and would be fully repaid from the proceeds
of the Offering. See "Description of New Credit Agreement."

The following table sets forth the anticipated sources and uses of funds for
the APC Acquisition (dollars in thousands):

<TABLE>
<S> <C>
SOURCES:
Term Loan....................................................... $ 340,000
Proceeds from the Offering (1).................................. 341,500
Cash on hand.................................................... 37,400
---------
Total sources................................................. $ 718,900
---------
---------
USES:
Cash consideration for the APC Acquisition...................... $ 625,000
Redemption of Senior Notes, including prepayment costs (2)...... 68,900
Fees and expenses and estimated post-closing adjustments........ 25,000
---------
Total uses.................................................... $ 718,900
---------
---------
</TABLE>

- ------------------------------
(1) Assumes a public offering price of $42.00 per share and after deducting the
underwriting discounts and commissions and estimated offering expenses
payable by the Company.

(2) Includes the redemption of the Senior Notes in aggregate principal amount of
$65.0 million and a prepayment penalty of approximately $3.9 million. The
Senior Notes were issued by the Company in May 1996 to finance the cash
portion of the purchase price of MSTI.

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the
8,500,000 shares of Common Stock offered by the Company hereby (at an assumed
public offering price of $42.00 per share and after deducting the underwriting
discounts and commissions and estimated offering expenses payable by the
Company) are estimated to be $341.5 million ($402.5 million if the Underwriters'
over-allotment option is exercised in full). The Company expects to use the net
proceeds to pay a portion of the cash purchase price of the APC Acquisition.

In the event that the APC Acquisition is not consummated, the Company
intends to use the net proceeds of the Offering for general corporate purposes,
which may include repayment of existing indebtedness, acquisitions or capital
expenditures. Pending such uses, the Company expects that such proceeds will be
invested in short-term, interest bearing, investment grade securities. See "Risk
Factors-- Consummation of the APC Acquisition."

The Company will not receive any of the proceeds from the sale of Common
Stock by the Selling Stockholders. See "Selling Stockholders."

14
<PAGE>
MARKET PRICE OF COMMON STOCK

The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "TWER." The Common Stock commenced trading on the Nasdaq National Market
on August 12, 1994. Effective February 19, 1997, the Common Stock will begin
trading on the NYSE under the symbol "TWR." The following table sets forth, for
the periods indicated, the high and low closing sale prices for the Common Stock
on the Nasdaq National Market.

<TABLE>
<CAPTION>
HIGH LOW
<S> <C> <C>
1995
- ----------------------------------------------------------------------------
First Quarter............................................................... $ 10 5/8 $ 7 1/2
Second Quarter.............................................................. 10 1/2 8 1/4
Third Quarter............................................................... 14 1/2 10 3/8
Fourth Quarter.............................................................. 17 1/2 13 1/8

1996
- ----------------------------------------------------------------------------
First Quarter............................................................... $ 16 1/8 $ 14 1/8
Second Quarter.............................................................. 25 1/4 16
Third Quarter............................................................... 27 23 3/4
Fourth Quarter.............................................................. 32 1/8 24

1997
- ----------------------------------------------------------------------------
First Quarter (through February 14, 1997)................................... $ 45 1/16 $ 29 3/4
</TABLE>

The reported last sale price of the Common Stock on the Nasdaq National
Market as of a recent date is set forth on the cover page of this Prospectus.

As of December 31, 1996, there were approximately 125 holders of record of
the outstanding Common Stock. The Company believes it has a significantly larger
number of beneficial holders of its Common Stock.

DIVIDEND POLICY

The Company has not declared or paid any cash dividends on its Common Stock
in the past, currently intends to retain its earnings to support its growth
strategy and does not anticipate paying dividends in the foreseeable future. Any
future payment of dividends is within the discretion of the Company's Board of
Directors and will depend upon, among other factors, the capital requirements,
operating results and financial condition of the Company from time to time. In
addition, the Company's ability to pay cash dividends is expected to be limited
by the terms of the New Credit Agreement. As of December 31, 1996, under the
most restrictive terms of the New Credit Agreement as currently proposed, the
Company would not have been permitted to pay any dividends. See "Management's
Discussion and Analysis of Results of Operations and Financial
Condition--Liquidity and Capital Resources Following the APC Acquisition."

15
<PAGE>
CAPITALIZATION

The following table sets forth: (i) the actual consolidated capitalization
of the Company at December 31, 1996; and (ii) the pro forma as adjusted
capitalization of the Company giving effect to (a) the APC Acquisition, (b) the
refinancing of the Existing Credit Agreement and redemption of the Senior Notes,
and (c) the sale by the Company of 8,500,000 shares of Common Stock in the
Offering and the application of the net proceeds therefrom to the Company as
described under "Use of Proceeds," as if such transactions had occurred on such
date. See "APC Acquisition Financing," "Use of Proceeds" and "Unaudited Pro
Forma Financial Statements." This table should be read in conjunction with the
consolidated financial statements of the Company and notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AT DECEMBER 31, 1996
----------------------
PRO FORMA
ACTUAL AS ADJUSTED
(IN THOUSANDS, EXCEPT
SHARE AMOUNTS)
<S> <C> <C>
Cash and cash equivalents................................................................. $ 39,596 $ 2,196
--------- -----------
--------- -----------
Long-term debt:
Existing Credit Agreement............................................................... $ -- $ --
New Credit Agreement:
Revolving Credit Facility............................................................. -- --
Term Loan............................................................................. -- 340,000
Senior Notes............................................................................ 65,000 --
Industrial development revenue bonds(1)................................................. 46,643 46,643
Convertible Notes....................................................................... 2,508 2,508
Other................................................................................... 31 31
Less: current maturities................................................................ (722) (722)
--------- -----------
Total long-term debt.................................................................. 113,460 388,460
--------- -----------
Stockholders' investment:
Preferred stock, par value $1.00; 5,000,000 shares authorized; no shares issued or
outstanding........................................................................... -- --
Common stock, par value $.01; 30,000,000 shares authorized; 14,283,793 shares on an
actual basis; and 22,783,793 shares on a pro forma as adjusted basis(2)............... 143 228
Additional paid-in capital.............................................................. 136,759 478,174
Warrants(3)............................................................................. 2,000 2,000
Retained earnings....................................................................... 43,150 40,150
Common stock subscriptions receivable................................................... (175) (175)
--------- -----------
Total stockholders' investment........................................................ 181,877 520,377
--------- -----------
Total capitalization.................................................................. $ 295,337 $ 908,837
--------- -----------
--------- -----------
</TABLE>

- --------------------------

(1) Long-term debt includes an aggregate of $43.8 million of indebtedness from
the issuance of industrial development revenue bonds ("IRBs") to finance the
construction of the Company's Bardstown facility and the purchase of related
equipment. The $10.8 million of uncommitted proceeds from these IRBs is
reflected as "restricted cash" on the Company's balance sheet as of December
31, 1996.

(2) Does not include: (i) 48,655 shares of Common Stock issued since December
31, 1996 under the Company's employee stock purchase plan; (ii) 5,602 shares
of Common Stock issued since December 31, 1996 upon the conversion of
certain of the Convertible Notes; (iii) 1,022,227 shares of Common Stock
reserved for issuance under the Company's stock option plans and employee
stock purchase plan, of which options to purchase 270,750 shares were
outstanding as of December 31, 1996; (iv) 102,984 shares issuable upon the
exercise of stock options issued in connection with the acquisition of
Edgewood; (v) 407,743 shares issuable upon conversion of the Convertible
Notes; or (vi) 200,000 shares issuable upon the exercise of the Warrants.

(3) Valued as of the time of the MSTI Acquisition using the Black-Scholes option
pricing model.

16
<PAGE>
UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following Unaudited Pro Forma Statement of Operations for the year ended
December 31, 1996 gives effect to: (i) the MSTI Acquisition (including related
financing transactions); (ii) the 1996 Offering and the application of the net
proceeds therefrom; (iii) the APC Acquisition; (iv) the refinancing of the
Existing Credit Agreement and redemption of the Senior Notes; and (v) the
Offering and the application of the net proceeds therefrom to the Company as
described in "Use of Proceeds," as if such transactions had occurred on January
1, 1996. The Company acquired Trylon on January 16, 1996. Results of operations
of Trylon for the period from January 1, 1996 through the acquisition date are
not material and therefore have not been included in the Company's results of
operations for the year ended December 31, 1996 on a pro forma basis.

The information set forth under the heading Pro Forma As Adjusted included
in the Unaudited Pro Forma Balance Sheet as of December 31, 1996 reflects: (i)
the APC Acquisition; (ii) the refinancing of the Existing Credit Agreement and
redemption of the Senior Notes; and (iii) the Offering and the application of
the net proceeds therefrom to the Company as described under "Use of Proceeds,"
as if such transactions had occurred on such date. The historical balance sheet
of the Company as of December 31, 1996 already reflects the Trylon Acquisition,
the MSTI Acquisition and the 1996 Offering.

The Company expects to achieve cost savings through the integration of the
operations of APC with those of the Company. See "Business--APC Acquisition."
The Unaudited Pro Forma Financial Statements set forth herein do not reflect any
of these anticipated cost savings.

The unaudited pro forma financial data presented herein are based on the
assumptions and adjustments described in the accompanying notes. The Unaudited
Pro Forma Statement of Operations does not purport to represent what the
Company's results of operations actually would have been if the events described
above had occurred as of the dates indicated or what such results will be for
any future periods. The Unaudited Pro Forma Financial Statements are based upon
assumptions and adjustments that the Company believes are reasonable. The
Unaudited Pro Forma Financial Statements and the accompanying notes should be
read in conjunction with the historical financial statements of the Company and
of APC, including the notes thereto, included elsewhere in this Prospectus.

17
<PAGE>
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1996

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
HISTORICAL
---------------------------------- PRO FORMA PRO FORMA
COMPANY(1) MSTI(2) APC(3) ADJUSTMENTS AS ADJUSTED
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................................... $ 399,925 $ 73,803 $ 862,977 $ (13,600)(4) $ 1,323,105
Cost of sales................................. 338,290 64,224 770,095 (31,462)(5) 1,141,147
----------- --------- ---------- --------------- ------------
Gross profit.................................. 61,635 9,579 92,882 17,862 181,958
Selling, general and administrative
expenses.................................... 20,004 3,404 37,233 -- 60,641
Amortization expense.......................... 2,191 683 -- 4,365(6) 7,239
----------- --------- ---------- --------------- ------------
Operating income.............................. 39,440 5,492 55,649 13,497 114,078
Interest expense, net......................... 5,103 37 6,829 14,309(7) 26,278
----------- --------- ---------- --------------- ------------
Income before provision for income taxes...... 34,337 5,455 48,820 (812) 87,800
Provision for income taxes.................... 13,700 1,640 20,000 (220)(8) 35,120
----------- --------- ---------- --------------- ------------
Income before extraordinary item.............. 20,637 3,815 28,820 (592) 52,680
Extraordinary loss on early extinguishment of
debt, net of income taxes................... -- -- -- (3,000) (9) (3,000)
----------- --------- ---------- --------------- ------------
Net income.................................. $ 20,637 $ 3,815 $ 28,820 $ (3,592) $ 49,680
----------- --------- ---------- --------------- ------------
----------- --------- ---------- --------------- ------------
Income applicable to common stockholders:
Before extraordinary item................. $ 20,765 $ 52,808
----------- ------------
----------- ------------
Net income................................ $ 20,765 $ 49,808
----------- ------------
----------- ------------
Income per common and common equivalent
share:
Before extraordinary item................. $ 1.55 $ 2.25
----------- ------------
----------- ------------
Net income................................ $ 1.55 $ 2.13
----------- ------------
----------- ------------
Weighted average common and common
equivalent shares outstanding............. 13,423 10,009 (10 23,432
</TABLE>

See accompanying Notes to Unaudited Pro Forma Statement of Operations.

18
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)

(1) Represents the results of operations of the Company for the year ended
December 31, 1996 and the results of operations of Trylon and MSTI from the
dates of their respective acquisitions.

(2) Represents the results of operations for MSTI from January 1, 1996 through
the date of acquisition, May 31, 1996.

(3) Represents the results of operations for APC for the year ended December
31, 1996.

(4) To eliminate sales of stampings from the Company to APC during 1996.

(5) To eliminate purchases made by APC from the Company during 1996 of $13,600
(See Note 4) and to reflect the change in depreciation expense resulting
from adjustments to the depreciable lives of property, plant and equipment
of MSTI and APC to their estimated useful lives at the time of their
acquisition and from adjustments to value such property, plant and equipment
at fair value as of the dates of acquisition ($17,862).

(6) Represents the amortization of goodwill arising from the acquisition of
MSTI ($415) and APC ($4,633), net of amortization of goodwill previously
recorded by MSTI ($683) which has been eliminated. Goodwill will be
amortized on a straight-line basis over a forty-year period.

(7) Represents incremental interest expense arising from indebtedness incurred
in connection with the acquisitions of MSTI ($2,368) and APC ($41,757), net
of the reduction in interest expense which results from the application of
the proceeds from the 1996 Offering ($896) and the Offering ($28,920).

(8) To adjust the provision for income taxes on a pro forma basis to reflect
the Company's incremental tax rate of 40%.

(9) Represents the payment of a prepayment penalty of $3,900 on the redemption
of the Senior Notes and the write-off of $1,100 of related deferred
financing costs, net of the related income tax effect of $2,000.

(10) Represents the pro forma effect from the shares issued to MascoTech in
connection with the MSTI Acquisition, the 2,232,900 shares issued in the
1996 Offering, including shares issued upon the exercise of the
underwriters' over-allotment option, and the issuance of 8,500,000 shares of
the Common Stock in the Offering.

19
<PAGE>
UNAUDITED PRO FORMA BALANCE SHEET
AS OF DECEMBER 31, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
HISTORICAL
---------------------- PRO FORMA PRO FORMA AS
COMPANY APC ADJUSTMENTS ADJUSTED
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $ 39,596 $ -- $ (37,400)(5) $ 2,196
Accounts receivable...................................... 61,073 68,827 -- 129,900
Inventories.............................................. 21,864 32,883 15,763(1) 70,510
Prepaid tooling and other................................ 14,433 69,432 (7,600)(2) 76,265
---------- ---------- -------------- ------------
Total current assets................................... 136,966 171,142 (29,237) 278,871
Property, plant and equipment, net......................... 156,248 407,549 48,197(3) 611,994
Restricted cash............................................ 10,833 -- -- 10,833
Goodwill and other intangible assets, net.................. 85,638 -- 185,326(4) 270,964
Other assets............................................... 8,922 22,620 (1,131)(5) 30,411
---------- ---------- -------------- ------------
$ 398,607 $ 601,311 $ 203,155 $ 1,203,073
---------- ---------- -------------- ------------
---------- ---------- -------------- ------------

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities:
Accounts payable......................................... $ 32,280 $ 69,485 $ -- $ 101,765
Accrued liabilities...................................... 22,429 37,835 (2,031)(5) 58,233
Current maturities of long-term debt..................... 722 -- -- 722
---------- ---------- -------------- ------------
Total current liabilities.............................. 55,431 107,320 (2,031) 160,720
Long-term debt, net of current maturities.................. 113,460 -- 275,000(5) 388,460

Other noncurrent liabilities............................... 47,839 101,377 (15,700)(6) 133,516
---------- ---------- -------------- ------------
Stockholders' investment:
Preferred stock.......................................... -- -- -- --
Common stock............................................. 143 -- 85(5) 228
Additional paid-in capital............................... 136,759 -- 341,415(5) 478,174
Warrants................................................. 2,000 -- -- 2,000
Retained earnings........................................ 43,150 -- (3,000)(5) 40,150
Net assets to be acquired................................ -- 392,614 (392,614)(7) --
Subscriptions receivable................................. (175) -- -- (175)
---------- ---------- -------------- ------------
Total stockholders' investment......................... 181,877 392,614 (54,114) 520,377
---------- ---------- -------------- ------------
$ 398,607 $ 601,311 $ 203,155 $ 1,203,073
---------- ---------- -------------- ------------
---------- ---------- -------------- ------------
</TABLE>

See accompanying Notes to Unaudited Pro Forma Balance Sheet.

20
<PAGE>
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(DOLLARS IN THOUSANDS)

(1) To record inventories at estimated fair value, including the elimination of
APC's historical LIFO reserve.

(2) To write off APC's historical deferred tax benefit.

(3) To state property, plant and equipment acquired in the APC Acquisition at
estimated fair value and eliminate historical accumulated depreciation.

(4) To adjust goodwill to the amount recognized in connection with the APC
Acquisition. The goodwill will be amortized on a straight-line basis over
forty years.

(5) To reflect the financing transactions related to the APC Acquisition and the
application of the net proceeds to the Company of the Offering. Upon the
consummation of the APC Acquisition, the Company intends to refinance the
Existing Credit Agreement and retire certain other indebtedness with
borrowings under the New Credit Agreement. In connection with the retirement
of certain indebtedness, the Company will write off $1,100 of previously
capitalized deferred financing costs and expects to pay a prepayment penalty
of $3,900 on the redemption of the Senior Notes. This will result in a
reduction in current income taxes payable of $2,000 and an extraordinary
loss, net of income taxes, of $3,000.

The following table sets forth the sources and uses of funds in the APC
Acquisition:

<TABLE>
<S> <C>
SOURCES:
Term Loan....................................................... $ 340,000
Proceeds from the Offering...................................... 341,500
Cash on hand.................................................... 37,400
---------
Total sources................................................. $ 718,900
---------
---------
USES:
Cash consideration for the APC Acquisition...................... $ 625,000
Redemption of Senior Notes, including prepayment costs.......... 68,900
Fees and expenses and estimated post-closing adjustments. 25,000
---------
Total uses.................................................... $ 718,900
---------
---------
</TABLE>

(6) To write off historical deferred taxes of $35,700 and to record management's
preliminary estimate of reserves to be established in connection with the
APC Acquisition, including $15,500 of losses to be incurred on the sale of
products which have costs in excess of selling prices and $4,500 of costs to
be incurred to rationalize certain facilities of APC. These reserves have
been established based on preliminary estimates.

(7) To eliminate the historical stockholder's investment of APC.

21
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
OF THE COMPANY

The consolidated financial data for the year ended December 31, 1992 and the
three and one-half month period ended April 14, 1993 are derived from the
audited consolidated financial statements of the Predecessor. The consolidated
financial data for the eight and one-half month period ended December 31, 1993
has been derived from the audited consolidated financial statements of the
Company. The consolidated financial data for the years ended December 31, 1994,
1995 and 1996 have been derived from the audited consolidated financial
statements of the Company, which are included as part of this Prospectus. The
financial data for the combined year ended December 31, 1993 have been derived
from the financial statements of the Predecessor and the Company and are
unaudited. The selected financial data below should be read in conjunction with
the consolidated financial statements and the notes thereto of the Company
included elsewhere in this Prospectus and "Management's Discussion and Analysis
of Results of Operations and Financial Condition."
<TABLE>
<CAPTION>

PREDECESSOR(1) THE COMPANY
-------------------------- -----------------------------------------------------------
JANUARY 1 APRIL 15 YEAR ENDED DECEMBER 31,
YEAR ENDED THROUGH THROUGH --------------------------------------------
DECEMBER 31, APRIL 14, DECEMBER 31, COMBINED
1992 1993 1993 1993(2) 1994 1995 1996(3)
(IN THOUSANDS, EXCEPT PER SHARE AND PER VEHICLE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................... $ 80,830 $ 25,037 $ 61,297 $ 86,334 $ 165,526 $ 222,801 $ 399,925
Cost of sales...................... 70,431 20,426 51,941 72,367 142,986 185,388 338,290
------------- ----------- ------------- ----------- --------- --------- ---------
Gross profit..................... 10,399 4,611 9,356 13,967 22,540 37,413 61,635
Selling, general and administrative
expenses......................... 4,440 1,223 3,155 4,378 7,435 14,308 20,004
Amortization expense............... -- -- 197 197 803 1,185 2,191
------------- ----------- ------------- ----------- --------- --------- ---------
Operating income................. 5,959 3,388 6,004 9,392 14,302 21,920 39,440
Interest expense, net.............. 539 93 636 729 1,899 1,799 5,103
Other income, net.................. (229) (25) -- (25) -- -- --
------------- ----------- ------------- ----------- --------- --------- ---------
Income before provision for
income taxes................... 5,649 3,320 5,368 8,688 12,403 20,121 34,337
Provision for income taxes......... 2,395 1,392 2,287 3,679 5,042 8,050 13,700
------------- ----------- ------------- ----------- --------- --------- ---------
Net income....................... $ 3,254 $ 1,928 $ 3,081 $ 5,009 $ 7,361 $ 12,071 $ 20,637
------------- ----------- ------------- ----------- --------- --------- ---------
------------- ----------- ------------- ----------- --------- --------- ---------
Net income applicable to common
stockholders................... $ 3,254 $ 1,928 $ 3,081 $ 5,009 $ 7,476 $ 12,247 $ 20,765
------------- ----------- ------------- ----------- --------- --------- ---------
------------- ----------- ------------- ----------- --------- --------- ---------
Net income per common and common
equivalent share............... $ 0.45 $ 0.74 $ 0.86 $ 1.05 $ 1.55
Weighted average common and
common equivalent shares
outstanding.................... 6,812 6,812 8,720 11,697 13,423

OTHER DATA:
Capital expenditures, net.......... $ 3,066 $ 5,156 $ 28,524 $ 26,148 $ 16,253
EBITDA(4).......................... 7,851 12,143 18,440 28,469 52,194
North American content per
vehicle(5)....................... NA 6.23 10.83 14.92 26.74

<CAPTION>
DECEMBER 31,
-----------------------------------------------------------
BALANCE SHEET DATA: 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C>
Working capital.................... $ 1,440 $ 33,145 $ 32,245 $ 81,535
Total assets....................... 51,358 178,398 209,476 398,607
Total debt......................... 14,433 50,403 71,079 114,182
Stockholders' investment........... 10,823 73,139 85,585 181,877
</TABLE>

(SEE FOOTNOTES ON FOLLOWING PAGE)

22
<PAGE>
- --------------------------

(1) On April 15, 1993, the Company acquired the Predecessor. Accordingly,
certain information provided for the year ended December 31, 1992, and the
three and one-half month period ended April 14, 1993, is not comparable to
the Statement of Operations Data of the Company due to the effects of
certain purchase accounting adjustments and the financing of the R.J. Tower
Acquisition. See "Management's Discussion and Analysis of Results of
Operations and Financial Condition."

(2) Operating data for the Predecessor for the period January 1, 1993 to April
14, 1993 have been combined for presentation purposes with the operating
data of the Company for the eight and one-half month period ended December
31, 1993, without giving effect to purchase accounting or the impact of the
financing of the R.J. Tower Acquisition.

(3) Includes the results of operations of MSTI from the date of acquisition, May
31, 1996.

(4) "EBITDA" is operating income plus amortization and depreciation. EBITDA does
not represent and should not be considered an alternative to net income or
cash flow from operations as determined by GAAP. The Company, however,
believes it is widely accepted that EBITDA provides useful information
regarding a company's ability to service and/or incur indebtedness. EBITDA
does not take into account the Company's debt service requirements and other
commitments and, accordingly, is not necessarily indicative of amounts that
may be available for discretionary uses. Set forth below is certain cash
flow information for the Company for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
APRIL 15 --------------------------------------------
THROUGH COMBINED
DECEMBER 31, 1993 1993 1994 1995 1996
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Cash provided by (used in):
Operating activities.......... $ 4,682 $ 9,241 $ (10,375) $ 13,905 $ 30,049
Investing activities.......... (23,344) (24,434) (73,266) (34,054) (88,924)
Financing activities.......... 18,510 15,024 82,848 21,051 97,514
</TABLE>

(5) "North American content per vehicle" is the Company's revenues divided by
total North American vehicle production, which is comprised of car and light
truck production in the United States, Canada and Mexico, as estimated by
the Company from industry sources.

23
<PAGE>
SELECTED COMBINED FINANCIAL DATA OF APC

The combined financial data for the years ended December 31, 1994, 1995 and
1996 are derived from the audited combined financial statements of APC, which
are included as a part of this Prospectus. The financial data for the years
ended December 31, 1992 and 1993 are unaudited. The selected financial data
below should be read in conjunction with the combined financial statements of
APC and the notes thereto included elsewhere in this Prospectus and
"Management's Discussion and Analysis of Results of Operations and Financial
Condition--Results of Operations--APC."

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1992 1993 1994 1995 1996
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER VEHICLE AMOUNTS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................................................... $ 527,617 $ 606,303 $ 722,718 $ 845,305 $ 862,977
Cost of sales................................................. 465,645 522,924 624,766 750,131 770,095
--------- --------- --------- --------- ---------
Gross profit................................................ 61,972 83,379 97,952 95,174 92,882
Selling, general and administrative expenses.................. 26,374 28,796 34,021 37,433 37,233
--------- --------- --------- --------- ---------
Operating income............................................ 35,598 54,583 63,931 57,741 55,649
Interest expense, net......................................... 6,190 3,677 4,051 5,357 6,829
--------- --------- --------- --------- ---------
Income before provision for income taxes.................... $ 29,408 $ 50,906 $ 59,880 $ 52,384 $ 48,820
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------

OTHER DATA:
Capital expenditures, net(1).................................. $ 25,400 $ 31,500 $ 59,023 $ 78,908 $ 151,534
EBITDA(2)..................................................... 65,198 84,383 98,031 99,562 106,417
North American content per vehicle(3)......................... 34.75 35.64 39.23 48.25 50.75
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
BALANCE SHEET DATA: 1996
<S> <C>
Working capital..................................................................................... $ 63,822
Total assets........................................................................................ 601,311
Parent company investment........................................................................... 392,614
</TABLE>

- ------------------------------

(2) "EBITDA" is operating income plus amortization and depreciation. EBITDA does
not represent and should not be considered an alternative to net income or
cash flow from operations as determined by GAAP. The Company, however,
believes it is widely accepted that EBITDA provides useful information
regarding a company's ability to service and/or incur indebtedness. EBITDA
does not take into account APC's debt service requirements and other
commitments and, accordingly, is not necessarily indicative of amounts that
may be available for discretionary uses. Set forth below is certain cash
flow information for APC for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
(IN THOUSANDS)
<S> <C> <C> <C>
Cash provided by (used in):
Operating activities............................................. $ 41,510 $ 40,089 $ 92,554
Investing activities............................................. (59,023) (82,658) (168,436)
Financing activities............................................. 17,513 42,569 75,882
</TABLE>

24
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION

GENERAL

The Company was organized to effect the R.J. Tower Acquisition, which was
financed with a combination of common equity and secured indebtedness. Since the
R.J. Tower Acquisition, the Company has successfully completed and fully
integrated four strategic acquisitions. See "The Company." The Company expects
to complete the APC Acquisition by the end of April 1997.

The Company's four previous acquisitions have affected, and the APC
Acquisition will prospectively affect, the Company's results of operations in
certain significant respects. As a result of the APC Acquisition, the Company
will increase the historical book value of APC's assets, including intangible
assets such as goodwill, which will significantly increase the amount of
amortization expense reported in the Company's ongoing operations. In addition,
the Company's interest expense will increase significantly due to increased
borrowings to finance the APC Acquisition. The Company expects to achieve cost
savings through the integration of the operations of APC with those of the
Company.

The Company believes that its overall gross margin has been slightly higher
than that of APC, primarily because the Company has historically sold a greater
percentage of complex, high value-added products than APC. In addition, APC's
overall gross margin has been negatively impacted in recent years as a result of
APC's beginning production of certain products that require a greater proportion
of components purchased from outside suppliers and higher launch costs and
depreciation expense related to the new production. The Company expects that, as
a result of the APC Acquisition, its overall gross margin will be lower in
future periods.

RESULTS OF OPERATIONS--THE COMPANY

The following table sets forth the percentage relationship of certain items
to revenues for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
PRO FORMA
1994 1995 1996 1996
<S> <C> <C> <C> <C>
Revenues............................................. 100.0% 100.0% 100.0% 100.0%
Cost of sales........................................ 86.4 83.2 84.6 86.2
--------- --------- --------- -----
Gross profit....................................... 13.6 16.8 15.4 13.8
Selling, general and administrative expenses......... 4.5 6.4 5.0 4.6
Amortization expense................................. 0.5 0.5 0.5 0.6
--------- --------- --------- -----
Operating income................................... 8.6 9.8 9.9 8.6
Interest and other expense........................... 1.1 0.8 1.3 2.0
--------- --------- --------- -----
Income before provision for income taxes........... 7.5 9.0 8.6 6.6
Provision for income taxes........................... 3.0 3.6 3.4 2.6
--------- --------- --------- -----
Net income before extraordinary item............... 4.5% 5.4% 5.2% 4.0%
--------- --------- --------- -----
--------- --------- --------- -----
</TABLE>

COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995

REVENUES. Revenues for the year ended December 31, 1996 increased by $177.1
million, or 79.5%, to $399.9 million compared to $222.8 million for the year
ended December 31, 1995. Approximately $134.3 million of the increase in
revenues over 1995 is attributable to the acquisitions of MSTI in May 1996 and
Trylon in January 1996. The remaining increase is due to new business awarded to
the Company, including business relating to the Ford Escort, Econoline and
Expedition, Dodge Ram Club Cab pick-up and Toyota Camry. These increases were
partially offset by production decreases in the first half of the year on key

25
<PAGE>
models served by the Company, including the Ford Aerostar, Villager, Econoline
and Chrysler Intrepid/ Concorde/Vision.

COST OF SALES. Cost of sales as a percentage of revenues for the year ended
December 31, 1996 was 84.6% compared to 83.2% for the year ended December 31,
1995. The decrease in gross margin was due to a higher proportion of components
purchased from outside suppliers as a result of the Trylon and MSTI Acquisitions
and launch costs associated with new business. These decreases were partially
offset by operating efficiencies and enhanced productivity.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased to $20.0 million, or 5.0% of revenues, for the
year ended December 31, 1996 compared to $14.3 million, or 6.4% of revenues, for
the year ended December 31, 1995. The percentage decrease related to revenues
reflects the economies of scale of higher gross sales. The increased expense was
due primarily to incremental costs associated with the Company's acquisitions of
MSTI and Trylon in 1996.

AMORTIZATION EXPENSE. Amortization expense for the year ended December 31,
1996 was $2.2 million compared to $1.2 million for the year ended December 31,
1995. The increase was due to incremental goodwill amortization related to the
acquisitions of MSTI and Trylon.

INTEREST EXPENSE. Interest expense for the year ended December 31, 1996 was
$5.1 million compared to $1.8 million for the year ended December 31, 1995. The
increase was due principally to increased borrowings incurred to fund the
acquisitions of MSTI and Trylon, partially offset by the application of the
proceeds from the 1996 Offering, and the absence of capitalization of interest
costs for the new Bardstown, Kentucky plant which was under construction during
1995.

INCOME TAXES. The effective income tax rate was 39.9% for the year ended
December 31, 1996 and 40.0% for the year ended December 31, 1995. The effective
rates differed from the statutory rates primarily as a result of state taxes and
nondeductible goodwill amortization.

COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994

REVENUES. Revenues for the year ended December 31, 1995 increased $57.3
million, or 34.6% to $222.8 million compared to $165.5 million for the year
ended December 31, 1994. Revenues increased despite significant production
decreases on key vehicles served by the Company including the Ford Escort,
Taurus/Sable, and Econoline and Chrysler Intrepid/Concorde/Vision. These
decreases were offset by new business that began production during the year and
the full year effects of the Company's acquisitions of Edgewood in May 1994 and
Kalamazoo in June 1994.

COST OF SALES. Cost of sales, as a percentage of revenues, decreased to
83.2% for the year ended December 31, 1995 compared to 86.4% for the year ended
December 31, 1994. The improvement in gross margin was a result of the
productivity improvement initiatives in place and synergies realized from the
acquisitions of Edgewood and Kalamazoo. These were partially offset by higher
raw material costs.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased to $14.3 million, or 6.4% of revenues, for the
year ended December 31, 1995 compared to $7.4 million, or 4.5% of revenues, for
the year ended December 31, 1994. The increased expense was due in part to the
full year effect of the acquisitions of Edgewood and Kalamazoo combined with the
incremental engineering, technical and development costs associated with future
programs.

OTHER. Amortization expense increased to $1.2 million for the year ended
December 31, 1995 from $0.8 million for the year ended December 31, 1994 due to
incremental goodwill amortization related to the Company's 1994 acquisitions.
Interest expense decreased to $1.8 million in 1995 from $1.9 million in 1994.
The decrease is due to the effect of the application of the proceeds from the
Company's IPO to reduce indebtedness. The provision for income taxes was at an
effective rate of 40.0% for the years ended

26
<PAGE>
December 31, 1995 and 1994. The effective rates were higher than federal
statutory rates as a result of nondeductible goodwill amortization and state
income taxes.

RESULTS OF OPERATIONS--APC

The following table sets forth the percentage relationship of certain items
to revenues for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
<S> <C> <C> <C>
Revenues.............................................................................. 100.0% 100.0% 100.0%
Cost of sales......................................................................... 86.4 88.7 89.2
--------- --------- ---------
Gross profit........................................................................ 13.6 11.3 10.8
Selling, general and administrative expenses.......................................... 4.7 4.5 4.3
--------- --------- ---------
Operating income.................................................................... 8.9% 6.8% 6.5%
--------- --------- ---------
--------- --------- ---------
</TABLE>

COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995

REVENUES. Revenues for the year ended December 31, 1996 increased $17.7
million, or 2.1%, to $863.0 million compared to $845.3 million for the year
ended December 31, 1995. This increase in revenue is attributable to new
business associated with the redesigned Nissan pick-up and the effects of the
full year's production of the Dodge Ram Club Cab pick-up, as well as overall
production increases on key vehicles served by APC, including the Ford
Taurus/Sable and the General Motors Yukon/Chevrolet Tahoe. These increases were
partially offset by lower production of the Dodge Dakota pick-up as a result of
the launch of a redesigned version of this vehicle during 1996.

COST OF SALES. Cost of sales, as a percentage of revenues, was 89.2% for
the year ended December 31, 1996, compared to 88.7% for the year ended December
31, 1995. APC's gross margin was negatively impacted by higher incremental costs
associated with the launch of new products during 1996, along with relative
increases in depreciation expense associated with capital equipment placed in
service during 1995 and 1996 related to this new business. These increases were
partially offset by improved labor efficiencies and productivity.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $37.6 million, or 4.3% of revenues, for the year
ended December 31, 1996 compared to $37.4 million for the prior year, an
increase of approximately 0.4%. The overall increase in these costs reflects
incremental design and engineering expenditures associated with new business to
be introduced in future periods, including the Ford Ranger, which was launched
late in 1996, the Dodge Durango, Chrysler's entry into the sport utility market,
and the front and rear suspension modules for the Chrysler
Intrepid/Concorde/Vision. These higher incremental costs were offset by lower
overall general and administrative costs.

COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994

REVENUES. Revenues for the year ended December 31, 1995 increased $122.6
million, or 17.0%, to $845.3 million compared to $722.7 million for the year
ended December 31, 1994. This increase was attributable to new business
associated with the launches of the redesigned Ford Explorer and General Motors
Yukon/Chevrolet Tahoe, as well as the effect of the full year's production of
the Ford Contour/ Mercury Mystique, which was launched during 1994.

COST OF SALES. Cost of sales, as a percentage of revenues, was 88.7% for
the year ended December 31, 1995, compared to 86.4% for the year ended December
31, 1994. Higher costs associated with the launch of new products during 1995
contributed to the overall increase in these costs. In addition, APC also

27
<PAGE>
experienced higher relative labor costs as a result of the increase in overall
product demand during 1995. Higher depreciation expense associated with capital
equipment used in the production of new products launched during 1994 and 1995
also contributed to these higher costs. Gross margin was also negatively
impacted as a result of APC's beginning production of certain products that
require a greater proportion of components purchased from outside suppliers.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $37.4 million, or 4.5% of revenues, for the year
ended December 31, 1995 compared to $34.0 million, or 4.7% of revenues, for the
prior year, an increase of approximately 10.0%. Higher design and engineering
costs associated with products to be launched in future periods, including the
redesigned Ford Ranger and Dodge Dakota pick-ups, contributed to this increase.
In addition, selling and general administrative costs increased to support the
overall higher revenues in 1995 compared to 1994.

SEASONALITY

The Company's performance is dependent on automotive vehicle production,
which is seasonal in nature. The third calendar quarter is historically the
weakest, due to the impact of OEM plant shutdowns in July for vacation and model
changeovers. Additionally, general industry levels are only a partial
explanation of volume changes throughout the year. Individual vehicle platforms
are also a cause of variations in revenues depending upon market response and
acceptance of the specific platform models.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1996, the Company had no indebtedness outstanding under the
revolving credit facility portion of its Existing Credit Agreement. The Existing
Credit Agreement consists of a revolving credit facility with a committed amount
of $75.0 million (subject to eligible accounts receivable and inventory, as
defined in the Existing Credit Agreement, which exceeded $75.0 million at
December 31, 1996). The Existing Credit Agreement matures in January 2001 and
bears interest at variable rates equal to, at the Company's option, either a
prime-based rate or LIBOR plus a variable margin. The Existing Credit Agreement
provides for the issuance of up to $50 million in letters of credit to
collateralize the outstanding IRBs described below.

At December 31, 1996, the Company also had $43.8 million of indebtedness
outstanding pursuant to IRBs issued with the City of Bardstown, Kentucky.
Proceeds from these IRBs were used to finance construction of a 240,000 square
foot manufacturing facility and the related purchase of equipment. The Bardstown
IRBs, which mature on June 1, 2024 and March 1, 2025, are collateralized by a
letter of credit. As of December 31, 1996, $34.2 million of the proceeds had
been expended or committed for the first phase of the facility and related
equipment. The unexpended proceeds from the Bardstown IRBs of $10.8 million at
December 31, 1996, are invested in treasury securities and will be used to
finance the second phase of the facility. These IRBs bear interest at a floating
rate which is adjusted weekly as determined by the bond remarketing agent (5.8%
at December 31, 1996). The second phase of the facility, which includes the
purchase and installation of additional processing equipment, is anticipated to
be completed by the end of 1998.

At December 31, 1996, the Company had $2.9 million in outstanding
indebtedness relating to IRBs issued in connection with the construction of its
Auburn, Indiana plant. The Auburn IRBs are collateralized by a letter of credit,
certain equipment and a mortgage on the Company's Auburn, Indiana plant. The
Auburn IRBs are payable in annual installments of $720,000 through September
2000 and bear interest at a floating rate which is adjusted weekly as determined
by the bond remarketing agent (4.4% at December 31, 1996).

28
<PAGE>
On January 16, 1996, the Company acquired all of the outstanding common
stock of Trylon for total cash consideration of approximately $25 million, which
included transaction costs. To finance the acquisition, the Company incurred a
$25.0 million term loan, which was repaid in May 1996 using a portion of the
proceeds from the sale of the Senior Notes and borrowings under the Existing
Credit Agreement.

On May 31, 1996, the Company purchased all of the outstanding common stock
of MSTI from MascoTech for an aggregate purchase price of approximately $79
million (including payment of related fees and expenses). Pursuant to the terms
of the acquisition, the Company is required to make additional earn-out payments
to MascoTech if certain operating targets are achieved by the MSTI facilities in
the first three years following the acquisition. If all such operating targets
are met, the total payments will not exceed $30.0 million.

The Company financed the cash portion of the purchase price of MSTI through
the issuance in two series of Senior Notes having an aggregate principal amount
of $65.0 million. The $40.0 million of Series A Senior Notes have a final
maturity on June 1, 2006 and require annual principal payments commencing on
June 1, 2000 and continuing every year thereafter until their final maturity.
The $25.0 million of Series B Senior Notes have a final maturity on June 1, 2008
and require annual principal payments commencing on June 1, 2004 and continuing
every year thereafter until their final maturity. The Senior Notes require the
Company to make semi-annual interest payments commencing December 1, 1996. Net
proceeds from the sale of the Senior Notes in excess of the amounts used to
finance the cash portion of the MSTI Acquisition were used, together with
borrowings under the revolving credit facility, to repay in full the remaining
balance outstanding on the $25.0 million term loan incurred by the Company in
connection with the Trylon Acquisition.

In June 1996, the Company completed an offering of 2,232,900 shares of
Common Stock at an offering price of $24.50 per share. Approximately $32 million
of the net proceeds from the 1996 Offering were used by the Company to retire
borrowings under its Existing Credit Agreement. The remaining proceeds are
included in cash and cash equivalents in the December 31, 1996 consolidated
balance sheet and will be used for other general corporate purposes, which may
include prepayment of other indebtedness, acquisitions or capital expenditures.

During the year ended December 31, 1996, the Company generated $30.0 million
of cash from operations, which was partially used to fund capital expenditures.

The Company has made substantial investments in manufacturing technology and
product design capability to support its products. The Company made capital
expenditures of approximately $16.3 million for the year ended December 31,
1996, primarily for equipment and dedicated tooling purchases related to new or
replacement programs.

LIQUIDITY AND CAPITAL RESOURCES FOLLOWING THE APC ACQUISITION

The aggregate purchase price of the APC Acquisition is approximately $625
million, plus an additional $25 million for related fees and expenses and
management's estimates of certain post-closing adjustments. The Company expects
to complete the APC Acquisition by the end of April 1997. This acquisition will
be accounted for as a purchase and, accordingly, APC's assets and liabilities
will be recorded at fair value as of the acquisition date, with any excess
purchase price recorded as goodwill.

In connection with the APC Acquisition, the Company expects to enter into
the New Credit Agreement. The New Credit Agreement will provide a total
financing commitment of up to $865 million, consisting of term borrowings of up
to $340 million payable over six and one-half years and a revolving credit
facility which allows for borrowings of up to $325 million over six and one-half
years. In addition, up to $200 million in borrowings, payable within 18 months,
will be made available in the event the APC Acquisition is completed prior to
the completion of the Offering. Interest will be payable on borrowings under the
New Credit Agreement at the bank's Base Rate plus 1% or the reserve adjusted
LIBOR Rate

29
<PAGE>
plus 2%. The New Credit Agreement will also include certain restrictive
covenants, which the Company expects will be similar in nature to those in the
Existing Credit Agreement. The New Credit Agreement will become effective
contemporaneously with the completion of the APC Acquisition.

Proceeds from borrowings under the New Credit Agreement will be used to: (i)
finance the APC Acquisition; (ii) refinance existing indebtedness of the
Company, including the redemption of the Senior Notes; and (iii) pay transaction
fees and expenses associated with the APC Acquisition. In connection with the
redemption of the Senior Notes, the Company will record an extraordinary loss of
approximately $3.0 million, net of income taxes, related to prepayment penalties
and the write-off of previously capitalized deferred financing costs.

Proceeds from this Offering will be used to fund a portion of the purchase
price related to the APC Acquisition or to repay indebtedness incurred under the
New Credit Agreement in the event that the APC Acquisition is consummated prior
to the completion of the Offering.

APC's capital expenditures for the year ended December 31, 1996 were
approximately $152 million, of which approximately $63 million was used to
finance the construction and to purchase equipment for its new Plymouth,
Michigan and Roanoke, Virginia manufacturing facilities. APC's remaining capital
expenditures were used primarily to purchase equipment and dedicated tooling
related to new or replacement programs. The Company's capital expenditures for
the year ended December 31, 1996 on a pro forma basis were approximately $168
million. After completing the APC Acquisition, the Company expects its budget
for capital expenditures during the remainder of 1997 to be approximately $75
million. Capital expenditures in 1997 are expected to be financed either with
cash generated from operations or borrowings under the New Credit Agreement.

The Company believes the borrowing availability under the New Credit
Agreement, together with funds generated by operations, should provide the
Company with the liquidity and capital resources to pursue its business strategy
through 1997, with respect to working capital, capital expenditures and other
operating needs. Under present conditions, management does not believe access to
funds will restrict its ability to pursue its acquisition strategy.

EFFECTS OF INFLATION

Inflation generally affects the Company by increasing the interest expense
of floating rate indebtedness and by increasing the cost of labor, equipment and
raw materials. Management believes that inflation has not significantly impacted
the Company's business over the past 12 months. However, because selling prices
generally cannot be increased until a model changeover, the effects of inflation
must be offset by productivity improvements and volume from new business awards.

30
<PAGE>
BUSINESS

MARKET DATA USED THROUGHOUT THIS PROSPECTUS WERE OBTAINED FROM INDUSTRY
PUBLICATIONS AND INTERNAL COMPANY SURVEYS. INDUSTRY PUBLICATIONS GENERALLY
STATED THAT THE INFORMATION CONTAINED THEREIN HAS BEEN OBTAINED FROM SOURCES
BELIEVED TO BE RELIABLE, BUT THAT THE ACCURACY AND COMPLETENESS OF SUCH
INFORMATION ARE NOT ASSURED. THE COMPANY HAS NOT INDEPENDENTLY VERIFIED THESE
MARKET DATA. SIMILARLY, INTERNAL COMPANY SURVEYS, WHILE BELIEVED BY THE COMPANY
TO BE RELIABLE, HAVE NOT BEEN VERIFIED BY ANY INDEPENDENT SOURCES.

GENERAL

The Company is a leading designer and producer of high-quality body
structure components and assemblies used by the major North American automotive
OEMs, Ford, Chrysler and General Motors, and certain Transplants, including
Honda, Toyota, Nissan and Mazda. The Company's current products range from large
structural stampings and assemblies, such as body pillars, chassis, suspension
and floor pan components and major housing assemblies, to engineered assemblies,
such as hood and deck lid hinges and brake components. On January 27, 1997, the
Company agreed to acquire A.O. Smith's APC division, a leading manufacturer of
light truck frames, automotive engine cradles and other structural and
suspension components, assemblies and modules used by major North American OEMs
and Transplants. Following the APC Acquisition, the Company believes it will be
the largest independent supplier of structural components and assemblies to the
North American automotive market.

Since its inception in April 1993, the Company's revenues have grown rapidly
through a focused strategy of internal growth and a highly disciplined
acquisition program. During the last three years, the Company has successfully
completed and fully integrated four acquisitions. As a result of such
acquisitions and internal growth, the Company's revenues have increased from $86
million in 1993 to approximately $474 million in 1996 (pro forma only for the
MSTI Acquisition), representing a compound annual growth rate of approximately
76%. The Company's North American content per vehicle has increased from $6.23
in 1993 to $26.74 in 1996 on an actual basis. The APC Acquisition will be the
Company's largest acquisition to date and will increase the Company's pro forma
revenues to approximately $1.3 billion and will increase the Company's pro forma
North American content per vehicle to $77.49 for 1996.

INDUSTRY TRENDS

The Company's performance and growth is directly related to certain trends
within the automotive market, including the consolidation of the component
supply industry, the increase in global sourcing and the growth of
system/modular sourcing.

SUPPLIER CONSOLIDATION. The automotive supply industry has recently begun
to undergo significant consolidation. To lower costs and improve quality, OEMs
are reducing their supplier base by awarding sole-source contracts to
full-service suppliers who are able to supply larger segments of a vehicle.
OEMs' criteria for supplier selection include not only cost, quality and
responsiveness, but also full-service design, engineering and program management
capabilities. For full-service suppliers such as the Company, the new
environment provides an opportunity to grow by obtaining business previously
provided by other non-full service suppliers and by acquiring suppliers that
further enhance product, manufacturing and service capabilities. OEMs rigorously
evaluate suppliers on the basis of product quality, cost control, reliability of
delivery, product design capability, financial strength, new technology
implementation, quality and condition of facilities and overall management.
Suppliers that obtain superior ratings are considered for sourcing new business.
Although these new supplier policies have already resulted in significant
consolidation of component suppliers in certain segments, the Company believes
that consolidation within the structural and suspension component segments of
the automotive industry will continue to provide attractive opportunities to
acquire high-quality companies that complement its existing business.

GLOBAL SOURCING. Regions such as Asia, Latin America, Mexico and Eastern
Europe are expected to experience significant growth in vehicle demand over the
next ten years. OEMs are positioning themselves

31
<PAGE>
to reach these emerging markets in a cost-effective manner by seeking to design
and produce "world cars" which can be designed in one vehicle center to a single
global standard but produced and sold in different geographic markets, thereby
allowing OEMs to reduce design costs, take advantage of low-cost manufacturing
locations and improve product quality and consistency. OEMs increasingly are
requiring their suppliers to have the capability to design and manufacture their
products in multiple geographic markets.

SYSTEM/MODULAR SOURCING. OEMs are increasingly seeking suppliers capable of
providing complete systems or modules rather than suppliers who only provide
separate component parts. A system is a group of component parts which operate
together to provide a specific engineering driven functionality whereas a module
is a group of systems and/or component parts which are assembled and shipped to
the OEM for installation in a vehicle as a unit. By outsourcing complete systems
or modules, OEMs are able to reduce their costs associated with the design and
integration of different components and improve quality by enabling their
suppliers to assemble and test major portions of the vehicle prior to beginning
production. As a result of the APC Acquisition, the Company will be in an
improved position to capitalize on this trend by designing its products to
function together and by providing designs that are integrated into the design
of the entire vehicle.

STRATEGY

The Company's business objective is to capitalize upon the consolidation,
globalization and system/ modular sourcing trends in the automotive supply
industry in order to enhance its position to be the leading provider of
structural and suspension components to OEMs on a worldwide basis. Key elements
of the Company's operating and growth strategies are outlined below:

OPERATING STRATEGY

FULL-SERVICE TECHNICAL DESIGN, ENGINEERING AND PROGRAM MANAGEMENT
CAPABILITIES. The Company strives to maintain a competitive advantage through
investment in research and product development, advanced engineering and program
management. The Company works with OEMs throughout the product development
process from concept vehicle and prototype development through the design and
implementation of manufacturing processes to provide full-service capabilities
to its customers. In some cases, the Company places design engineers at customer
facilities to coordinate its product design efforts with those of its OEM
customers.

EFFICIENT MANUFACTURING/CONTINUOUS IMPROVEMENT PROGRAMS. In response to
OEMs' increasingly stringent demands, the Company has implemented manufacturing
practices designed to maximize product quality and timeliness of delivery and
eliminate waste and inefficiency. The Company has continued to upgrade its
manufacturing equipment and processes through substantial investment in new
equipment, maintenance of existing equipment and utilization of manufacturing
engineering personnel.

GLOBAL PRESENCE. The Company strives to offer manufacturing and support
services to its customers on a global basis through a combination of
international wholly owned facilities and by entering into joint ventures and
partnerships with foreign suppliers. Since 1993, in furtherance of its global
expansion strategy, the Company has opened a European sales and engineering
office to service U.K. and German OEM customers and has established an
industrial partnership with The Kirchhoff Group ("Kirchhoff") in Germany. With
the APC Acquisition, the Company will further expand its ability to service OEMs
on a global basis. The Company also has relocated certain technical personnel
resources to locations where OEMs are developing "world cars."

DECENTRALIZED, PARTICIPATIVE CULTURE. The Company's decentralized approach
to managing its manufacturing facilities encourages decision making and employee
participation in areas such as manufacturing processes and customer service. The
Company's management team meets frequently at various Company locations in order
to maintain a unified Company culture. To increase employee productivity, the
Company

32
<PAGE>
utilizes incentive programs for all salaried and hourly employees and provides
incentives for employees who take advantage of its continuous improvement
programs and who provide cost savings ideas.

GROWTH STRATEGY

STRATEGIC ACQUISITIONS. The Company continues to believe that consolidation
in the automotive supply industry will provide further attractive opportunities
to acquire high-quality companies that complement its existing business. The
Company seeks to make acquisitions that (i) provide additional product,
manufacturing and technical capabilities; (ii) broaden the Company's geographic
coverage domestically and strengthen its ability to supply products on a global
basis; (iii) increase the number of models for which the Company supplies
products and the content supplied for existing models; and (iv) add new
customers. With the consummation of the APC Acquisition, the Company will have
acquired five businesses since 1993. The Company intends to seek future
acquisitions or develop strategic alliances that will strengthen the Company's
ability to supply its products on a global basis.

MODULAR PRODUCT OPPORTUNITIES. The Company has capitalized on the
system/modular sourcing trend among OEMs by offering customers higher
value-added supply capabilities through an increasing focus on the production of
assemblies consisting of multiple component parts that are welded or otherwise
fastened together by the Company. The APC Acquisition will significantly expand
the Company's ability to supply OEMs with modules consisting of integrated
assemblies and component parts that can be installed as a unit in a vehicle at
the OEM assembly plant.

INCREASE VEHICLE PENETRATION. The Company has developed strong
relationships with certain OEM engineering and purchasing personnel which allow
it to identify business opportunities and to react to customer needs in the
early stages of vehicle design. The Company believes that these relationships
give it a competitive advantage over smaller and less capable suppliers in
marketing its broad range of products and in developing new product concepts,
such as expanded use of modules, that complement its existing product lines.

PURSUIT OF "WORLD CAR" OPPORTUNITIES. The Company has been working closely
with certain customers on the development of "world cars," which are designed by
OEMs in one vehicle center to a single global standard but produced and sold in
different geographic markets. Suppliers for a specific "world car" are often
required to provide their products on a worldwide basis. The Company believes
that it has a competitive advantage in potentially supplying certain world cars
given its international presence, full-service capabilities and existing
position as a leading supplier on the Ford Escort and DEW98 luxury car, as well
as on other existing vehicle platforms which may eventually evolve into world
cars.

THE APC ACQUISITION

33
<PAGE>
The Company believes that the APC Acquisition will provide the Company with
several strategic benefits, including the following:

INCREASED PENETRATION IN LIGHT TRUCK SEGMENT AND OTHER KEY MODELS. The APC
Acquisition will increase the Company's North American content per vehicle from
$26.74 in 1996 to $77.49 on a pro forma basis and will triple the Company's
content per vehicle in the expanding light truck/sport utility market segment,
which segment represented approximately 60% of the Company's pro forma revenue
for 1996. The APC Acquisition will increase the Company's content per vehicle on
key vehicles such as the Ford Explorer and Ranger and the Chrysler Dakota,
Durango and Ram as well as on high volume passenger cars such as the Ford
Taurus/Sable and the Chrysler Intrepid/Concorde/Vision. The Company believes
that this increased model penetration will afford it greater opportunities to
supply additional parts and modules for such models.

COMPLEMENTARY NEW TECHNOLOGY. The APC Acquisition will provide the Company
with a variety of new and enhanced design and manufacturing process technology,
including APC's patented three piece side rail frame and patented Simulform-TM-
forming technology, the latter of which may result in cost savings and quality
improvements over conventional stamping technology in certain specialized
applications. In addition, APC's existing hydroforming technology complements
the Company's initiatives in this area. The APC Acquisition will also provide
the Company with additional painting, coating and welding technologies and
advanced logistical parts management systems. The Company believes that these
acquired technologies will provide significant additional opportunities to serve
existing customers and obtain new business.

34
<PAGE>
EXPANDED GLOBAL CAPABILITIES. OEMs are increasingly demanding that their
suppliers have global production capabilities. APC's presence in China, Japan
and South America complements the Company's current European initiatives to
provide expanded global production capabilities for both North American and
international OEMs. See "--Global Initiatives."

PRODUCTS

GENERAL. The Company's current products consist of a broad array of
stamped, formed, welded and assembled metal components, many of which are
critical to the structural integrity of a vehicle. As a result of the APC
Acquisition, the Company will expand its product offerings and will be able to
manufacture and supply its customers with, among other products, light truck
frames, automotive engine cradles, trailing axles and heavy truck frame rails.
These additional products will complement the Company's existing base of
products, many of which are currently attached directly to the frame of a
vehicle at the OEM assembly plant. Following the APC Acquisition, the Company's
products will generally include structural components, suspension components and
engineered assemblies.

STRUCTURAL COMPONENTS. The Company's current structural component products
form the basic upper body structure of the vehicle and include large metal
stampings such as body pillars, roofrails, side sills, parcel shelves and
intrusion beams. APC's structural component products form the basic lower body
structure of the vehicle and include light truck frames, automotive engine
cradles and heavy truck frame rails. Critical to the strength and safety of
vehicles, structural products carry the load of the vehicle and provide crash
integrity.

SUSPENSION COMPONENTS. The Company's current suspension component products
include stamped, formed and welded products such as control arms, suspension
links, track bars and spring/shock towers. APC's suspension components include
control arms, suspension links and trailing axles. Critical to the ride,
handling and noise characteristics of a vehicle, suspension components are a
natural extension of the Company's larger structural components.

ENGINEERED ASSEMBLIES. The Company's current engineered assemblies include
a broad array of highly engineered parts such as hood and deck lid hinges, brake
components and fuel filler assemblies. Such engineered assemblies are a natural
extension to the Company's other products in that they are attached to both
structural and suspension components. The APC Acquisition will not add
materially to the Company's existing array of engineered assembly products.

OTHER. In addition to the Company's and APC's structural, suspension and
mechanical component products, each of the Company and APC manufactures a
variety of other products, including heat shields and other precision stampings,
for their OEM customers.

The following table sets forth the percentage of revenues derived from the
sale of certain products in 1996:

PERCENTAGE OF REVENUES BY PRODUCT

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-----------------------------------
PRODUCT CATEGORY COMPANY APC PRO FORMA
<S> <C> <C> <C>
Structural components....................................... . 48.6% 90.9% 77.5%
Suspension components....................................... . 22.7 5.0 10.6
Engineered assemblies....................................... . 16.1 -- 5.1
Other......................................................... 12.6 4.1 6.8
----- --------- -----
Total..................................................... 100.0% 100.0% 100.0%
----- --------- -----
----- --------- -----
</TABLE>

35
<PAGE>
Although a portion of the Company's products are sold directly to OEMs as
finished products, most are used by the Company to produce assemblies consisting
of multiple parts that are welded or otherwise fastened together by the Company.
Systems and assemblies currently produced by the Company include front and rear
structural suspension systems comprised of control arms, suspension links and
axle assemblies consisting of stamped metal trailing axles, assembled brake
shoes, hoses and tie rods. As a result of the APC Acquisition, the Company will
significantly expand its ability to supply OEMs with systems and modules
consisting of integrated assemblies and component parts that can be installed as
a unit in a vehicle at the OEM assembly plant.

CUSTOMERS AND MARKETING

The North American automotive market is dominated by General Motors, Ford
and Chrysler, with Transplants representing approximately 20% of this market in
1996. The Company currently supplies its products primarily to Ford, Chrysler,
Honda, General Motors, Toyota, Nissan and Mazda. The APC Acquisition will
significantly expand the Company's penetration within each of the three major
North American OEMs. In addition, the APC Acquisition will also expand the
Company's penetration with certain Transplants, including doubling the Company's
sales to Toyota, expanding its already significant position at Honda, increasing
sales to Nissan and adding Isuzu as a new customer. APC sells its heavy truck
products primarily to Ford, Freightliner Corporation, PACCAR Inc., Volvo/GM
Heavy Truck Corp. and Navistar International Corp.

The following table sets forth the percentage of revenues derived from the
sale of products to certain customers in 1996:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-----------------------------------
CUSTOMER COMPANY APC PRO FORMA
<S> <C> <C> <C>
Ford.......................................................... 66.9% 46.4% 52.9%
Chrysler...................................................... 10.2 20.0 16.9
General Motors................................................ 3.5 23.1 16.9
Honda......................................................... 9.2 -- 2.9
Other......................................................... 10.2 10.5 10.4
----- --------- -----
Total..................................................... 100.0% 100.0% 100.0%
----- --------- -----
----- --------- -----
</TABLE>

OEMs typically award contracts that cover parts to be supplied for a
particular car model. Such contracts range from one year to over the life of the
model, which is generally three to seven years and do not require the purchase
by the customer of any minimum number of parts. The Company and APC also compete
for new business to supply parts for successor models and therefore are subject
to the risk that the OEM will not select the Company to produce parts on a
successor model. The Company and APC supply parts for a broad cross-section of
both new and mature models, thereby reducing their reliance on any particular
model. For example, the Company supplies parts for substantially all models
produced by Ford,

36
<PAGE>
Honda and Chrysler and APC currently supplies Chrysler with substantially all of
its full frame requirements. The following table presents an overview of the
major models for which the Company and APC supply products:

<TABLE>
<CAPTION>
CUSTOMER CAR MODELS LIGHT TRUCK MODELS
<S> <C> <C>
Ford............ Taurus/Sable, Contour/Mystique, Explorer, Ranger, F-Series,
Mustang, Escort, Crown Victoria, Econoline, Villager, Windstar,
Grand Marquis, Probe, Continental Medium Trucks, Expedition

Chrysler........ Concorde/Intrepid/Vision, Neon, Ram Pick-up, Dakota, Grand Cherokee,
Viper, Stratus/Cirrus/Breeze Voyager, Caravan, Ram Van, Wrangler,
Durango

General Cavalier, Sunfire, Grand Am, Lumina, C/K Pick-up, Blazer, Suburban,
Motors...... . Grand Prix Tahoe, Yukon, Astro, Safari, Chevy
Van

Honda........... Accord, Civic, Acura Integra

Mazda........... 626, MX6

Toyota.......... Avalon, Camry Mini-van

Nissan.......... Sentra Quest, Pick-up

Isuzu........... Rodeo, Amigo
</TABLE>

Most of the parts the Company and APC produce have a lead time of two to
five years from product development to production. See "--Design and Engineering
Support." Since 1988, the Company has been the leading supplier for hood and
deck hinges at Ford and Chrysler and is responsible for the design and
production of such products. The selling prices of these products are generally
negotiated between the Company and its customers and are typically not subject
to a competitive bid process. APC is currently the largest supplier of
structural components to Chrysler.

The Company and APC have been awarded new business (i.e., parts not
previously supplied by either) for the calendar year indicated for the models
set forth below:

<TABLE>
<CAPTION>
MODEL YEAR MODELS
<S> <C>
1997............... Ford Escort Coupe, Ranger, Continental; Honda Accord; Toyota Mini-van,
Corolla; Chrysler LH, Prizm, B-Van, Durango; Isuzu Rodeo, Amigo
1998............... Ford Medium Truck, Lincoln, Probe, DEW98; General Motors Saturn,
Innovate, GMT800 (C/K platform); Acura
1999............... Ford Escort, Mini-Explorer, Jaguar X200
</TABLE>

Sales of the Company's and APC's products to OEMs are made directly by their
respective sales and engineering forces, each headquartered in their respective
technical centers located in Farmington Hills, Michigan. Through their technical
centers, the Company and APC service their OEM customers and manage their
continuing programs of product design improvement and development. The Company
and APC each periodically place engineering staff at various customer facilities
to facilitate the development of new programs. After the APC Acquisition, the
Company's sales and engineering force will consist of approximately 460
individuals.

DESIGN AND ENGINEERING SUPPORT

The Company strives to maintain a technological advantage through investment
in product development and advanced engineering capabilities. The Company's
manufacturing engineering capabilities

37
<PAGE>
enable it to design and build high-quality and efficient manufacturing systems,
processes and equipment and to continually improve its production processes and
equipment. The Company's manufacturing engineers are located at each of its
manufacturing facilities.

As a result of the APC Acquisition, the Company's engineering staff will
increase from approximately 140 to approximately 400 full-time engineers, whose
responsibilities range from research and development, advanced product
development, product design, testing and initial prototype development to the
design and implementation of manufacturing processes.

Because assembled parts must be designed at an early stage in the
development of new vehicles or model revisions, the Company is increasingly
given the opportunity to utilize its product engineering resources early in the
planning process. Advanced development engineering resources create original
engineering designs, computer-aided designs, feasibility studies, working
prototypes and testing programs to meet customer specifications. The Company's
advanced development capabilities have resulted in several innovations in hinge
design that have provided significant benefits to the Company's customers. The
Company also has full service design capability for chassis components. APC has
a long history of developing innovative new designs both to improve the quality
and to lower the cost of its designs. Recent innovations include the patented
three piece side rail, the use of aluminum and other alternative material
applications in its structural components and the use of high-performance
alternative coatings for its structural components, including epoxy coated
primer, two-coat water-reducible coatings, ultrasolids and hybrid coatings.

GLOBAL INITIATIVES

The Company has formed, or is in the process of forming, strategic alliances
with other suppliers throughout the world, including in Europe, Asia and Latin
America. The Company has recently opened a European sales and engineering office
to service its U.K. and German OEM customers. In addition, the Company has a
joint manufacturing and marketing agreement with Kirchhoff, a German automobile
parts supplier, pursuant to which the Company and Kirchhoff have agreed to
provide manufacturing and marketing services to each other when and as required
by each company's OEM customers. A current focus of the Company's acquisition
strategy is to acquire European suppliers, which would provide the Company with
a manufacturing presence in Europe and afford the Company access to new customer
opportunities.

The APC Acquisition will significantly expand the Company's global
initiatives. In addition to a Japanese sales office, APC has a 60% ownership
interest in a joint venture located in Changchun, China, which will manufacture
automobile parts for Volkswagen A.G. APC also has a Brazilian subsidiary, which
will be supplying frame components for the Dodge Dakota and has a manufacturing
arrangement to provide cross beams for the Ford Fiesta. Prior to entering into
negotiations with APC, the Company had been investigating the possibility of
opening a sales office in Japan and acquiring an interest in a Brazilian
operation.

MANUFACTURING

After the APC Acquisition, the Company's manufacturing operations will
consist primarily of stamping operations, system and modular assembly
operations, roll-forming and hydroforming operations and associated coating and
other ancillary operations. The APC Acquisition will provide the Company with
significant additional stamping and assembly capacity.

Stamping involves passing metal through dies in a stamping press to form the
metal into three-dimensional parts. The Company produces stamped parts using
over 240 precision single-stage, progressive and transfer presses, ranging in
size from 150 to 2,000 tons, which perform multiple functions as raw material
proceeds through the press and is converted into a finished product. The Company
continually invests in its press technology to increase flexibility, improve
safety and minimize die changeover time. The

38
<PAGE>
APC Acquisition will broaden the Company's stamping capabilities by adding over
400 stamping presses ranging from 200 to 4,000 tons in size.

After forming is completed, stampings that are to be used in assemblies are
placed in work-in-progress staging areas from which they are fed into
cell-oriented assembly operations that produce complex, value-added assemblies
through the combination of multiple parts that are welded or fastened together.
The Company's assembly operations are performed on either dedicated, high-volume
welding/fastening machines or on flexible-cell oriented robotic lines for units
with lower volume production runs. The assembly machines attach additional
parts, fixtures or stampings to the original metal stampings. In addition to
standard production capabilities, the Company's assembly machines are also able
to perform various statistical control functions and identify improper welds and
attachments. The Company continually works with manufacturers of fixed/robotic
welding systems to develop faster, more flexible machinery. Several of the
Company's welding systems were designed by the Company.

APC's manufacturing and assembly processes are state-of-the-art. Using
highly-automated assembly processes, APC's new Plymouth, Michigan light truck
frame assembly facility requires no changeover time between the six frame models
it assembles for Chrysler's new Dodge Dakota. Line programmable controllers
adjust assembly equipment to accommodate various frame wheelbase configurations
at various stages of assembly, while robotic welding and material handling
processes are responsible for 99 percent of the facility's frame welding. In
comparison, conventional light truck frame assembly requires equipment and tool
reconfiguration to accommodate various frame models. APC's patented
Simulform-TM- forming process, currently being tested for production use,
simultaneously forms, pierces and joins components of an engine cradle assembly,
resulting in cost savings over traditional stamping techniques, due to a
reduction in the number of presses and operators required and the enhanced
quality and lighter weight of the products manufactured through this method. In
addition, APC's solid state welding capabilities allow it to weld at lower
temperatures which results in less structural distortion of products,
exceptional weld quality and higher production rates than conventional welding
processes. APC also utilizes a significant number of robots in its frame
riveting processes and automated transfer systems in addition to their use in
welding operations.

The products manufactured by the Company and APC use various grades and
thicknesses of steel and aluminum, including hot and cold rolled, galvanized,
organically coated, stainless and aluminized steel. Neither the Company nor APC
produces exposed sheet metal components, such as exterior body panels. See
"--Suppliers and Raw Materials."

OEMs have established quality rating systems involving rigorous inspections
of suppliers' facilities and operations. OEMs' factory rating programs provide a
quantitative measure of a company's success in improving the quality of its
operations. The Company and APC have each received quality awards from Ford (Q1)
and Chrysler (Pentastar) and the Company has consistently received one of Ford's
highest commercial ratings for suppliers in the stamping segment. The automotive
industry has recently adopted a quality rating system known as QS-9000. The
Company has recently received QS-9000 certification and APC expects to receive
such certification by the end of 1997.

COMPETITION

The Company operates in a highly competitive, fragmented market segment of
the automotive supply industry, with a limited number of competitors generating
revenues in excess of $200 million. The number of the Company's competitors has
decreased in recent years and is expected to continue to decrease due to the
supplier consolidation resulting from changing OEM policies. The Company's
largest competitors include The Budd Company, a subsidiary of Thyssen AG
("Budd"), Magna International Inc. ("Magna"), Midway Products Corp., Modern Tool
& Die Co., L&W Engineering and divisions of OEMs with internal stamping and
assembly operations, all of which have substantial financial resources. The
Company

39
<PAGE>
competes with Magna across most of the Company's product lines, and with its
other significant competitors in various segments of its product lines. For
example, the Company competes with Budd for large stampings, while it competes
with ITT Automotive for hinge business. Aetna Industries, Active Tool & Die Co.,
AG Simpson, Lobdell-Emory Mfg. Co. and L&W Engineering compete with the Company
for medium-size structural stampings.

APC also operates in a highly competitive market segment that is
significantly less fragmented than the Company's market segment. APC's principal
competitors include Dana Corporation, Magna and internal divisions of OEMs, all
of which are large and have substantial resources. APC also competes with
Midland Corporation across its heavy truck product lines.

The Company and APC principally compete for new business both at the
beginning of the development of new models and upon the redesign of existing
models. New model development generally begins two to five years before the
marketing of such models to the public. Once a producer has been designated to
supply parts for a new program, an OEM usually will continue to purchase those
parts from the designated producer for the life of the program, although not
necessarily for a redesign. Competitive factors in the market for the Company's
and APC's products include product quality and reliability, cost and timely
delivery, technical expertise and development capability, new product innovation
and customer service.

SUPPLIERS AND RAW MATERIALS

The primary raw material used to produce the majority of the Company's
products is steel. The Company purchases hot and cold rolled, galvanized,
organically coated, stainless and aluminized steel from a variety of suppliers.
The Company employs just-in-time manufacturing and sourcing systems enabling it
to meet customer requirements for faster deliveries while minimizing its need to
carry significant inventory levels. The Company has not experienced any
significant shortages of raw materials and normally does not carry inventories
of raw materials or finished products in excess of those reasonably required to
meet production and shipping schedules. Raw materials costs represented
approximately 53% of the Company's revenues in 1996, and steel represented
approximately 70% to 75% of raw material costs in 1996.

Honda and Chrysler currently purchase all of the steel used by the Company
for their models directly from steel producers. Ford is in the process of
implementing a similar program. As a result, the Company will have minimal
exposure to changes in steel prices for parts supplied to Ford, Honda and
Chrysler, which collectively represented 86% of the Company's revenues in 1996.
APC currently purchases substantially all of the steel used in its manufacturing
operations from steel manufacturers, either directly or through distributors.
The Company expects that APC will adopt a similar arrangement with such
customers following the APC Acquisition.

The Company expects that the content level of metal in cars and light trucks
will remain constant or increase slightly due to the trend toward increased
vehicle size and a greater emphasis on metal recycling. Although the search for
improved fuel economy and weight reduction has resulted in attempts to reduce
the sheet metal content of light vehicles, an efficient, cost-effective
substitute for steel used in the Company's structural products has not been
found. While various polymers have been used recently for fenders, hoods and
decks, such products do not have the inherent strength or structural integrity
on a cost-effective basis to be used for structural components. The Company and
APC are involved in ongoing evaluations of the potential for the use of aluminum
and of specialty steel in their products.

Other raw materials purchased by the Company include dies, fasteners,
tubing, springs, rivets and rubber products, all of which are available from
numerous sources. APC currently outsources many of its stamping needs, some of
which can be supplied by the Company's existing stamping facilities.

40
<PAGE>
FACILITIES

The Company maintains several manufacturing facilities located in close
proximity to many of the high-volume vehicle assembly plants in the United
States. In addition, APC has located its facilities close to its major OEM
customers in order to facilitate the just-in-time delivery requirements of its
customers and to minimize freight delivery costs. The Company's and APC's
facilities are geographically located in such a way as to enable the Company to
optimize their management and logistical capabilities on a regional basis.

The following table provides information regarding the Company's and APC's
principal facilities:
<TABLE>
<CAPTION>
TOWER AUTOMOTIVE
SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
Bardstown, Kentucky.................... 240,000 Owned(1) Manufacturing
<S> <C> <C> <C>
Kalamazoo, Michigan
(3 locations)........................ 222,000 Mixed Manufacturing/Warehouse/Office
Traverse City, Michigan
(4 locations)........................ 220,000 Owned Manufacturing
Greenville, Michigan................... 160,000 Owned Manufacturing/Office
Auburn, Indiana........................ 132,000 Owned(1) Manufacturing/Office
Kendallville, Indiana.................. 132,000 Owned Manufacturing
Romulus, Michigan...................... 115,000 Leased Manufacturing/Office
Bluffton, Ohio......................... 102,000 Owned Manufacturing
Rochester Hills, Michigan.............. 89,000 Leased Office/Engineering/Design
Manchester, Michigan................... 61,000 Owned Manufacturing
Upper Sandusky, Ohio................... 56,000 Owned Manufacturing
Grand Rapids, Michigan................. 23,000 Leased Operating Headquarters
Farmington Hills, Michigan............. 12,000 Leased Engineering/Design/Sales
Minneapolis, Minnesota................. 5,700 Leased Corporate Headquarters

APC

<CAPTION>
SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
<S> <C> <C> <C>
Milwaukee, Wisconsin................... 3,527,000 Owned Manufacturing
Milan, Tennessee....................... 533,000 Owned(1) Manufacturing
Granite City, Illinois................. 458,000 Owned Manufacturing
Plymouth, Michigan..................... 221,000 Leased Manufacturing
Roanoke, Virginia...................... 185,000 Owned Manufacturing
Corydon, Indiana....................... 155,000 Leased Manufacturing
Rockford, Illinois..................... 140,000 Leased Manufacturing
Belcamp, Maryland...................... 68,000 Owned Manufacturing
Bellevue, Ohio......................... 66,000 Owned Manufacturing
Farmington Hills, Michigan............. 47,000 Leased Engineering/Design/Sales
Fenton, Missouri....................... 40,000 Leased Warehouse
Barrie, Ontario........................ 40,000 Leased Manufacturing
Bowling Green, Kentucky................ 39,000 Owned Manufacturing
Yokohama, Japan........................ 800 Leased Sales
Changchun, China....................... 140,500 Leased(2) Manufacturing
</TABLE>

- ------------------------------

(1) Facility is subject to an IRB financing arrangement pursuant to which the
Company or APC makes periodic lease payments and has the option to acquire
such facility for nominal consideration at the end of the term.

(2) Facility is leased by a joint venture in which APC holds a 60% equity
interest.

Management believes that substantially all of the Company's and APC's
property and equipment is in good condition. In order to increase efficiency,
the Company expects to make capital expenditures for equipment upgrades at the
facilities recently acquired in the MSTI Acquisition. See "Management's
Discussion and Analysis of Results of Operations and Financial
Condition--Liquidity and Capital Resources."

41
<PAGE>
The Company believes that its existing facilities will be adequate to meet
its production demands for the foreseeable future. The Company's facilities were
specifically designed for the manufacturing of the Company's products. The
utilization and capacity of such facilities are dependent upon the mix of
products being produced by the Company.

EMPLOYEES

The Company currently has approximately 2,700 employees, of whom
approximately 1,100 are covered under collective bargaining agreements, one of
which expires in July 1997, with the remainder expiring in 1999. The Company
believes that its future success will depend in part on its ability to continue
to recruit, retain and motivate qualified personnel at all levels of the
Company. The Company has instituted a large number of employee programs to
increase employee morale and expand the employees' participation in the
Company's business. The Company has not experienced any work stoppages and
considers its relations with its employees to be good.

APC currently has approximately 5,300 employees, of whom approximately 2,900
are covered under several collective bargaining agreements, the earliest of
which expires in September 1998. The Company believes APC's relations with its
employees are generally good. The Company expects to retain APC's employees on
substantially the same terms and conditions of employment as were in place prior
to the APC Acquisition.

ENVIRONMENTAL MATTERS

The Company believes it conducts its operations in substantial compliance
with applicable environmental and occupational health and safety laws. The
Company does not expect to incur material capital expenditures for environmental
compliance during its current or succeeding fiscal year. However, as is the case
with manufacturers in general, if a release of hazardous substances occurs on or
from the Company's properties or at any associated offsite disposal location, if
contamination from prior activities is discovered at any of the Company's
properties or if non-compliance with environmental regulations or permits is
discovered, the Company may be held liable and the amount of such liability
could be material. In connection with the Trylon and MSTI Acquisitions,
MascoTech has agreed to indemnify the Company for certain environmental matters,
including replacement of underground storage tanks at the Traverse City
facilities and any remediation that may be required at the Kendallville
facility.

In connection with the APC Acquisition, A.O. Smith has agreed, subject to
certain limitations, to indemnify the Company for environmental matters relating
to APC arising from events occurring, or conditions arising, prior to the date
of the APC Acquisition. This indemnification obligation applies to claims to the
extent exceeding $250,000 submitted by the Company within three years of the
acquisition date. To the extent that such claims exceed $5.0 million in the
aggregate, A.O. Smith will indemnify 70% of such losses, up to A.O. Smith's
maximum $75.0 million indemnification obligation under the purchase agreement.
In addition, A.O. Smith has agreed to retain certain environmental liabilities
for, among other things, liabilities arising from offsite disposal of hazardous
substances prior to the APC Acquisition.

LEGAL PROCEEDINGS

The Company is not currently involved in any material lawsuits. The Company
believes it maintains adequate insurance, including product liability coverage.
The Company historically has not been required to pay any material liability
claims. APC is subject to a number of outstanding lawsuits arising in the
ordinary course of its business. A.O. Smith has agreed, however, to retain
responsibility for all material lawsuits and to indemnify the Company for any
losses it may incur in connection therewith.

A.O. Smith is a party to a lawsuit alleging that APC misappropriated trade
secrets from one of its competitors in developing its hydroforming technology.
In connection with the APC Acquisition, A.O. Smith has retained the liability
relating to this litigation and has agreed to indemnify the Company for any
monetary damages it may incur as a result of such litigation. A.O. Smith has
informed the Company that it believes this suit to be without merit and is
asserting various defenses to such allegations. The Company's ability to utilize
APC's hydroforming technology may be impaired in the event that A.O. Smith is
found liable in such suit.

42
<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the
executive officers of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
<S> <C> <C>
S. A. Johnson.......................... 56 Chairman and Director
Adrian Vander Starre................... 64 Vice Chairman and Director
Dugald K. Campbell..................... 50 President, Chief Executive Officer and Director
James R. Lozelle....................... 51 Executive Vice President and Director
Michael W. Doherty..................... 54 Vice President
Anthony A. Barone...................... 47 Vice President and Chief Financial Officer
Paul D. Rysenga........................ 55 Vice President
Ronald E. Gavalis...................... 58 Vice President
Scott D. Rued.......................... 40 Vice President, Corporate Development and Director
Luigi Candusso......................... 47 Vice President
</TABLE>

S. A. (TONY) JOHNSON has served as Chairman and a Director of the Company
since April 1993. Mr. Johnson is the founder, Chief Executive Officer and
President of Hidden Creek Industries ("Hidden Creek"), a private industrial
management company based in Minneapolis which has provided certain management
and other services to the Company. Mr. Johnson is also the Managing Partner of
J2R Partners ("J2R"). Prior to forming Hidden Creek, Mr. Johnson served from
1985 to 1989 as Chief Operating Officer of Pentair, Inc., a diversified
industrial company. From 1981 to 1985, Mr. Johnson was President and Chief
Executive Officer of Onan Corp., a diversified manufacturer of electrical
generating equipment and engines for commercial, defense and industrial markets.
Mr. Johnson currently serves as Chairman and a director of Dura Automotive
Systems, Inc., a manufacturer of mechanical assemblies and integrated systems
for the automotive industry, and served as Chairman and a director of Automotive
Industries Holding, Inc., a supplier of automotive interior trim components,
from May 1990 until its sale to Lear Corporation in August 1995.

ADRIAN VANDER STARRE has served as Vice Chairman and a Director of the
Company since April 1993. Mr. Vander Starre served as President, Chief Executive
Officer and a director of the Predecessor from 1978 to 1993. Mr. Vander Starre
originally joined the Predecessor in 1965 as Controller and later served as
Treasurer from 1974 to 1978. Mr. Vander Starre has entered into a consulting
agreement with the Company under which he performs such duties as may be
assigned by the Board of Directors.

DUGALD K. CAMPBELL has served as President, Chief Executive Officer and a
Director of the Company since December 1993. From 1991 to 1993, Mr. Campbell
served as a consultant to Hidden Creek. From 1988 to 1991, he served as Vice
President and General Manager of the Sensor Systems Division of Siemens
Automotive, a manufacturer of engine management systems and components. From
1972 to 1988, he held various executive, engineering and marketing positions
with Allied Automotive, a manufacturer of vehicle systems and components and a
subsidiary of Allied Signal Corporation.

JAMES R. LOZELLE has served as Executive Vice President for the Tower
Automotive Technical Centers, with responsibility for advanced product
development and customer service, and a Director of the Company since the
Company's acquisition of Edgewood in May 1994. Mr. Lozelle served as President
of Edgewood from 1982 until it was acquired by the Company. Mr. Lozelle joined
Edgewood in 1970 and served as Vice President from 1971 to 1982. Mr. Lozelle is
chairman of the Near Zero Stamping research project of the Autobody Consortium.

MICHAEL W. DOHERTY has served as Vice President, with responsibility for
program management and overall business planning including global strategy,
since April 1993. From October 1992 until April 1993, Mr. Doherty served as
Senior Vice President of the Predecessor, with responsibility for sales and

43
<PAGE>
engineering. From 1978 to 1992, Mr. Doherty served as the Predecessor's Vice
President, Sales and Engineering.

ANTHONY A. BARONE has served as Vice President and Chief Financial Officer
since May 1995. From 1984 to 1995, Mr. Barone served as Chief Financial Officer
of O'Sullivan Corporation, a manufacturer of interior trim components for the
automotive industry.

PAUL D. RYSENGA has served as Vice President of the Company, with
responsibility for the Company's operations in Kendallville, Indiana, Bluffton
and Upper Sandusky, Ohio and Traverse City, Michigan, since August 1996. From
October 1995 to August 1996, Mr. Rysenga had responsibility for the Company's
operations in Greenville, Romulus and Traverse City, Michigan. Mr. Rysenga is
also responsible for the MSTI operating facilities. From June 1994 to October
1995, Mr. Rysenga had responsibility for the Company's operations in Auburn,
Indiana. From July 1991 to June 1994, Mr. Rysenga served as Executive Vice
President and General Manager at Kalamazoo. From 1988 to July 1991, Mr. Rysenga
was Executive Director of Eastman Sterling Pharmaceutical, a division of Eastman
Kodak.

RONALD E. GAVALIS has served as Vice President of the Company, with
responsibility for capacity planning, quality operating systems and QS-9000
certification, since April 1995. From June 1994 to April 1995, Mr. Gavalis had
responsibility for the Company's Greenville, Michigan operations. Mr. Gavalis
joined the Predecessor in 1983 as Director of Manufacturing, and served as the
Predecessor's Vice President, Manufacturing, from 1985 until 1989 and as its
Vice President, Operations, from 1989 until June 1994.

SCOTT D. RUED has served as Vice President, Corporate Development, and a
Director of the Company since April 1993. Mr. Rued served as Vice President,
Chief Financial Officer and a Director of Automotive Industries Holding, Inc.
from April 1990 until its sale to Lear Corporation in August 1995. Mr. Rued, a
partner of J2R, has also served as Executive Vice President and Chief Financial
Officer of Hidden Creek since January 1994 and served as its Vice
President-Finance and Corporate Development from June 1989 through 1993. Mr.
Rued is also a director of The Rottlund Company, Inc., a corporation engaged in
the development and sale of residential real estate.

LUIGI CANDUSSO has served as Vice President of the Company, with
responsibility for the Company's operations in Kalamazoo, Michigan and
Bardstown, Kentucky, since April 1995 and Romulus, Michigan since August 1996.
From October 1995 to August 1996, Mr. Candusso also had responsibility for the
Company's operations in Auburn, Indiana. From 1990 to April 1995, Mr. Candusso
served as Vice President and General Manager of the Sensor Systems Division of
Siemens Automotive, a manufacturer of engine management systems and components.
From 1988 to 1990, Mr. Candusso served as Vice President of Operations of
Fabricated Steel Products (FABCO), a division of Indal Canada.

After the consummation of the APC Acquisition, the Company expects to retain
the services of certain key executives of APC. The Company is currently in the
process of identifying such key executives, determining what positions such
executives would hold with the Company and determining the terms and conditions
upon which it will retain such executives.

44
<PAGE>
PRINCIPAL STOCKHOLDERS

Unless otherwise noted, the following table sets forth certain information
regarding ownership of the Common Stock as of February 14, 1997 and after
completion of the Offering by (i) the beneficial owners of more than 5% of the
Common Stock of the Company, (ii) each Director and executive officer of the
Company and (iii) all Directors and executive officers of the Company as a
group. To the knowledge of the Company, each of such stockholders has sole
voting and investment power as to the shares shown unless otherwise noted.
Beneficial ownership of the Common Stock listed in the table has been determined
in accordance with the applicable rules and regulations promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act").

<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
NUMBER OF SHARES BENEFICIALLY OWNED(1)
BENEFICIALLY OWNED -----------------------------
PRIOR TO THE PRIOR TO THE AFTER THE
5% STOCKHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS OFFERING OFFERING OFFERING
<S> <C> <C> <C>
Onex U.S. Investments, Inc.(2)(3).................................... 3,119,620 21.8% 2.2%
RCM Capital Management, L.L.C.(4).................................... 1,002,800 7.0 4.4
First Union Corporation(5)........................................... 765,204 5.3 3.4
Chancellor Entities(6)............................................... 717,400 5.0 3.1
S. A. Johnson(7)..................................................... 659,182 4.6 3.3
Adrian Vander Starre(8).............................................. 19,351 * *
Dugald K. Campbell(9)................................................ 226,276 1.6 1.0
James R. Lozelle(10)................................................. 314,492 2.1 1.4
Michael W. Doherty(11)............................................... 158,020 1.1 *
Anthony A. Barone.................................................... 9,700 * *
Paul D. Rysenga...................................................... 7,150 * *
Ronald E. Gavalis.................................................... 71,444 * *
Scott D. Rued(12).................................................... 590,836 4.1 3.0
Luigi Candusso....................................................... 12,750 * *
W. H. Clement(13).................................................... 696,926 4.9 3.5
Eric J. Rosen(2)..................................................... 10,000 * *
Matthew O. Diggs, Jr.(14)............................................ 8,500 * *
Kim B. Clark......................................................... 2,500 * *
F. J. Loughrey....................................................... 4,500 * *
All Directors and executive officers as a group (15 persons)......... 1,644,623 11.2 9.3
</TABLE>

- ------------------------

* Less than one percent.

(1) Does not reflect the exercise of the Underwriters' over-allotment option and
does not give effect to any purchases, if any, by such persons in the
Offering other than Onex U.S. Investments, Inc. ("Onex"). See Footnote 2. In
the event the over-allotment option is exercised in full, the Company will
sell an additional 1,513,500 shares in the Offering.

(2) Prior to the Offering, Onex had shared voting power of 3,119,620 shares and
sole dispositive power of 1,486,778 shares. Onex has indicated its intention
to sell an aggregate of 1,486,778 shares of Common Stock in the Offering. In
addition, Onex has indicated its intention to purchase an aggregate of
500,000 shares in the Offering. See "Selling Stockholders." Eric J. Rosen, a
Director of the Company, is a Managing Director of Onex Investment Corp. and
disclaims beneficial ownership of all shares of Common Stock owned by Onex.
The record holder of such shares listed in the table as owned by Onex is
ONEX DHC LLC, an affiliate of Onex ("Onex DHC"). Onex DHC and Onex
Investment Corp. are both wholly owned subsidiaries of Onex Corporation. The
address for Onex, Onex DHC and Mr. Rosen is c/o Onex Investment Corp., 712
Fifth Avenue, 40th Floor, New York, New York 10019.

(3) Onex, Messrs. Johnson, Vander Starre, Campbell, Lozelle, Doherty, Gavalis,
Rued, Clement and certain of the Company's other existing stockholders have
entered into agreements pursuant to which such stockholders agreed to vote
their shares of the Company's voting stock in the same manner as

45
<PAGE>
Onex votes its shares on all matters presented to the Company's stockholders
for a vote and, to the extent permitted by law, granted to Onex a proxy to
effectuate such agreement. These voting arrangements will terminate upon
completion of the Offering.

(4) RCM Capital Management, L.L.C. ("RCM Capital") reported as of December 31,
1996 sole voting power with respect to 897,800 shares of Common Stock and
sole dispositive power with respect to 1,002,800 shares of Common Stock. RCM
Limited L.P., as the Managing Agent of RCM Capital, and RCM General
Corporation, as the General Partner of RCM Limited L.P., also reported
beneficial ownership of such shares. The address for such entities is Four
Embarcadero Center, Suite 2900, San Francisco, California 94111.

(5) First Union Corporation reported as of December 31, 1996 sole voting and
dispositive power with respect to 765,204 shares of Common Stock, which
represented approximately 5.4% of the outstanding Common Stock at that time.
The address for First Union Corporation is One First Union Center,
Charlotte, North Carolina 28288.

(6) Chancellor LGT Asset Management, Inc. ("Chancellor Asset") and Chancellor
LGT Trust Company ("Chancellor Trust"), as investment advisors for various
fiduciary accounts, and LGT Asset Management, Inc. ("Asset Management") as
the holding company for Chancellor Asset, reported as of December 31, 1996
the sole power to vote and dispose of an aggregate of 717,400 shares of
Common Stock, which represented approximately 5.4% of the outstanding Common
Stock at that time. The address for Chancellor Asset and Chancellor Trust is
1166 Avenue of the Americas, New York, New York 10036 and the address for
Asset Management is 50 California Street, San Francisco, California 94111.

(7) Includes the shares owned by J2R, of which Mr. Johnson is Managing Partner,
and 82,700 shares owned by Mr. Johnson.

(8) Includes: 19,351 shares held in an irrevocable trust for the benefit of Mr.
Vander Starre's children as to all of which Mr. Vander Starre's children are
the trustees. Mr. Vander Starre disclaims beneficial ownership of the shares
held in trust.

(9) Includes: (i) 3,195 shares owned by Mr. Campbell's wife; (ii) 350 shares
owned by Mr. Campbell's child; (iii) 74,805 shares held in an annuity trust,
of which Mr. Campbell is the trustee; and (iv) 15,000 shares issuable upon
the exercise of currently exercisable options held by Mr. Campbell. Mr.
Campbell disclaims beneficial ownership of the shares held by his wife, his
child and in trust.

(10) Includes 266,600 shares of Common Stock issuable upon the conversion of
Convertible Notes and 44,578 shares issuable upon the exercise of currently
exercisable options held by Mr. Lozelle.

(11) Includes 150,816 shares owned by Mr. Doherty and 7,000 shares issuable upon
the exercise of currently exercisable options held by Mr. Doherty.

(12) Includes the shares owned by J2R, of which Mr. Rued is a partner, and
14,354 shares owned by Mr. Rued. Mr. Rued disclaims beneficial ownership of
those shares owned by J2R in which he does not have a pecuniary interest.

(13) Includes the shares owned by J2R, of which Mr. Clement is a partner, 89,744
shares owned by Mr. Clement and an aggregate of 30,700 shares held in trusts
for the benefit of Mr. Clement's grandchildren, as to all of which trusts
Mr. Clement serves as the sole trustee. Mr. Clement disclaims beneficial
ownership of those shares owned by J2R and the shares held in trust in which
he does not have a pecuniary interest.

(14) Includes 6,000 shares owned by EJJM Partnership, of which Mr. Diggs is the
General Partner and 2,500 shares issuable upon the exercise of currently
exercisable options held by Mr. Diggs. Mr. Diggs disclaims beneficial
ownership of the shares owned by EJJM Partnership in which he does not have
a pecuniary interest.

46
<PAGE>
SELLING STOCKHOLDERS

The following table sets forth certain information regarding the Common
Stock beneficially owned by the Selling Stockholders, before and after this
Offering, and the number of shares of Common Stock to be sold in this Offering.
To the knowledge of the Company, each of such stockholders has sole voting and
investment power as to the shares shown unless otherwise noted. Beneficial
ownership of the Common Stock listed in the table has been determined in
accordance with the applicable rules and regulations promulgated under the
Exchange Act.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING AFTER THE OFFERING
------------------------ ------------------------
NO. OF PERCENT OF NO. OF SHARES NO. OF PERCENT OF
SELLING STOCKHOLDERS SHARES CLASS OFFERED HEREBY SHARES CLASS
<S> <C> <C> <C> <C> <C>
Onex (1).............................................. 3,119,620 21.8% 1,486,778 500,000 2.2%
J2R Partners (2).................................... . 576,482 4.0 103,222 473,260 2.1
</TABLE>

- ------------------------

(1) Prior to the Offering, Onex had shared voting power of 3,119,620 shares and
sole dispositive power of 1,486,778 shares. Onex has informed the Company of
its intention to purchase an aggregate of 500,000 shares in the Offering. As
a result, the Company has requested the Underwriters reserve up to 500,000
shares for sale to Onex at the public offering price. Upon completion of the
Offering, Onex is expected to have sole voting and sole dispositive power of
500,000 shares. See "Underwriting."

(2) The partners of J2R are S. A. Johnson, Scott D. Rued, W. H. Clement, Robert
R. Hibbs, Mary L. Johnson and Carl E. Nelson.

Set forth below are the material relationships which existed between the
Company and the Selling Stockholders during the last three years:

The Company, Onex and certain stockholders, including J2R and its partners,
are parties to a registration agreement pursuant to which the Company has
granted such stockholders rights to register their shares of Common Stock.
Pursuant to the terms of such agreement, the Company will pay all expenses of
the Offering attributable to the Selling Stockholders other than underwriting
discounts and commissions and legal fees and expenses that may be incurred by
them.

The Company, Onex, J2R and its partners and certain other investors, who
collectively own 2,355,836 shares of Common Stock (prior to the Offering), are
parties to an Investor Stockholders Agreement pursuant to which each party has
agreed to vote his or its shares in the same manner that Onex votes its shares
of Common Stock. In addition, certain members of management, who collectively
own 763,784 shares of Common Stock, have executed irrevocable proxies that grant
Onex the right to vote such shares on all matters presented to the Company's
stockholders for a vote. These voting arrangements will terminate upon
completion of the Offering.

In 1994, Hidden Creek, a partnership affiliated with Onex and J2R, received
$333,000 for providing strategic direction, management and financial services to
the Company. In addition, in 1994 the Company paid Hidden Creek an aggregate of
$500,000 for services rendered in connection with the acquisitions of Edgewood
and Kalamazoo. In 1996, the Company paid Hidden Creek an aggregate of $750,000
for services in connection with the acquisitions of Trylon and MSTI. The Company
expects to pay Hidden Creek an aggregate of $ for services rendered in
connection with the APC Acquisition.

In May 1994, Onex acquired 788,831 shares of Common Stock for aggregate
consideration of $2,543,599 and J2R acquired 197,207 shares of Common Stock for
aggregate consideration of $4,176. Onex and J2R are parties to a Co-Investment
Agreement pursuant to which they have agreed to an allocation of the purchase
price of their investments. As a result of this allocation, the combined price
per share paid by Onex and J2R in connection with the purchase of the
above-described shares is the same price per share paid by all other
stockholders acquiring shares at such time.

47
<PAGE>
DESCRIPTION OF NEW CREDIT AGREEMENT

In connection with the APC Acquisition, the Company's principal operating
subsidiary expects to enter into the New Credit Agreement. Proceeds from
borrowings under the New Credit Agreement will be used to (i) pay a portion of
the cash purchase price of the APC Acquisition; (ii) redeem the Senior Notes;
and (iii) pay transaction fees and expenses associated with the APC Acquisition.
In the event that this Offering has not been completed at the time of the
consummation of the APC Acquisition, the Company will finance the entire APC
Acquisition with the proceeds from borrowings under the New Credit Agreement.
The Company anticipates that the New Credit Agreement will provide for (i) a six
and one-half year Term Loan of up to $340 million; and (ii) a six and one-half
year Revolving Credit Facility of up to $325 million. In addition, an additional
loan of up to $200 million will be made available to the Company in the event
the APC Acquisition is consummated prior to the receipt of the proceeds of the
Offering. This loan would have a term of 18 months and would be fully repaid
from the proceeds of the Offering. The following description of the material
terms of the New Credit Agreement is qualified in its entirety by reference to
the executed letter agreement relating to the New Credit Agreement, which has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part.

Indebtedness under the New Credit Agreement will be guaranteed by the
Company and certain of its subsidiaries (with exceptions for foreign
subsidiaries to be mutually agreed upon) and is secured by all existing and
after-acquired personal property of the Company and its subsidiaries, including
all outstanding capital stock of the Company's domestic subsidiaries and any
intercompany debt obligations.

The loans under the New Credit Agreement will bear interest at a rate per
annum equal to, at the Company's option, (i) the Base Rate plus 1.0% or (ii) the
reserve adjusted LIBOR Rate plus 2.0% (as each term will be defined in the New
Credit Agreement). Adjustments to the interest rates set forth above will be
made according to the pricing matrix that will be attached to the New Credit
Agreement.

Proceeds from excess cash flow as well as from certain events, including
certain asset sales, debt financings and issuances of equity, must be used to
prepay outstanding indebtedness under the New Credit Agreement. Such prepayments
will first be applied to reduce amounts outstanding under the Term Loans and
thereafter to the permanent reduction of the Revolving Credit Facility.

The New Credit Agreement will require the Company to meet certain financial
tests, including but not limited to minimum interest coverage, minimum net worth
and maximum leverage ratio. The New Credit Agreement will also contain covenants
which, among other things, will limit (i) the incurrence of additional
indebtedness; (ii) the creation of liens and encumbrances; (iii) the payment of
dividends; (iv) additional capital expenditures; (v) prepayments of other
indebtedness; (vi) asset sales, acquisitions, mergers and consolidations; and
(vii) other matters customarily restricted in such agreements.

The New Credit Agreement will contain customary events of default including
but not limited to (i) payment defaults; (ii) breach of representations and
warranties; (iii) noncompliance with covenants; (iv) bankruptcy; (v) judgments
in excess of specified amounts; (vi) failure of any guaranty or security
agreement supporting the New Credit Agreement to be in full force and effect;
(vii) defaults under other instruments or agreements of indebtedness; and (viii)
a Change of Control (as such term will be defined in the New Credit Agreement).

48
<PAGE>
UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement among the
Company, the Selling Stockholders and the Underwriters named below (the
"Underwriting Agreement"), Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ"), PaineWebber Incorporated, Robert W. Baird & Co. Incorporated ("Baird"),
Morgan Stanley & Co. Incorporated and Piper Jaffray Inc. (the "Underwriters")
have severally agreed to purchase from the Company and the Selling Stockholders
the respective number of shares of Common Stock set forth opposite their names
below:

<TABLE>
<CAPTION>
NUMBER OF SHARES OF
UNDERWRITER COMMON STOCK
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation......................
PaineWebber Incorporated.................................................
Robert W. Baird & Co. Incorporated.......................................
Morgan Stanley & Co. Incorporated........................................
Piper Jaffray Inc........................................................
-------------------
Total................................................................ 10,090,000
-------------------
-------------------
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of the Common Stock
offered hereby are subject to approval of certain legal matters by counsel and
to certain other conditions. The Underwriters are obligated to take and pay for
all the shares of the Common Stock if any are taken.

The Company has been advised that the Underwriters propose to offer the
shares of the Common Stock in part directly to the public initially at the
public offering price set forth on the cover page of this Prospectus and in part
to certain dealers at such price less a concession not in excess of $.__ per
share; that the Underwriters may allow, and such dealers may reallow, a
concession not in excess of $.__ per share on sales to other dealers; and that
after the initial public offering, the public offering price and other selling
terms may be changed by the Underwriters. The Underwriters have informed the
Company that they do not intend to confirm sales to any accounts over which they
exercise discretionary authority.

The Company has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus, to purchase up to an aggregate of
1,513,500 additional shares of Common Stock at the price to the public less
underwriting discounts and commissions. The Underwriters may exercise such
option only for the purpose of covering over-allotments, if any, incurred in
connection with the sales of Common Stock offered hereby. To the extent that the
Underwriters exercise such option, each Underwriter will become obligated,
subject to certain conditions, to purchase the same percentage of such
additional shares as the number of other shares to be purchased by that
Underwriter bears to the total number of shares set forth on the cover page of
this Prospectus.

The Company, its Directors and executive officers, the Selling Stockholders
and certain other stockholders have agreed with the Underwriters not to offer,
sell, contract to sell, grant any other option to purchase or otherwise dispose
of any shares of the Common Stock or any securities convertible into or
exercisable for, or warrants, rights or options to acquire, shares of Common
Stock for a period of 90 days without the prior written consent of DLJ, other
than sales of Common Stock under the Underwriting Agreement, the issuance of
shares of Common Stock upon the exercise of outstanding options and certain
transfers to affiliates.

At the request of the Company, the Underwriters have reserved up to 500,000
shares of Common Stock for sale at the public offering price to Onex. The number
of shares of Common Stock available to the general public will be reduced to the
extent Onex purchases any of the reserved shares. Any reserved shares of Common
Stock that are not so purchased by Onex at the closing of the Offering will be
offered by the Underwriters to the general public on the same terms as the other
shares in the Offering.

49
<PAGE>
The Company, its principal operating subsidiaries and the Selling
Stockholders have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that they may be required to make in respect thereof.

In connection with the Offering and pursuant to Regulation M under the
Exchange Act, the Underwriters may engage in transactions that stabilize or
maintain the market price of the Common Stock at levels above those which might
otherwise prevail in the open market. Such stabilizing, if commenced, may be
discontinued at any time.

DLJ was retained by the Company to deliver a fairness opinion to the Board
of Directors of the Company in connection with the APC Acquisition and received
usual and customary compensation for such services. Baird will receive an
advisory fee for services as financial advisor to the Company in connection with
the APC Acquisition. DLJ, Baird and the other Underwriters have in the past
provided and may continue to provide investment banking services to the Company
and its affiliates, and have received usual and customary compensation for their
services.

LEGAL MATTERS

Certain legal matters regarding the issuance of the shares of Common Stock
being offered hereby have been passed upon for the Company by Kirkland & Ellis,
Chicago, Illinois (a partnership which includes professional corporations).
Certain legal matters will be passed upon for the Underwriters by Gardner,
Carton & Douglas, Chicago, Illinois. A partner of Gardner, Carton & Douglas
holds 2,000 shares of Common Stock.

EXPERTS

The audited financial statements included in this Prospectus and elsewhere
in the Registration Statement, to the extent and for the periods indicated in
their reports, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.

AVAILABLE INFORMATION

The Company has filed with the Commission a registration statement (the
"Registration Statement," which term shall include any amendments thereto) on
Form S-3 under the Securities Act, with respect to the shares of Common Stock
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement and the exhibits and schedules thereto, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission and to which reference is hereby made. Statements made in this
Prospectus as to the contents of any document referred to are not necessarily
complete. With respect to each such document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved and each such statement shall be deemed
qualified in its entirety by such reference. The Registration Statement may be
inspected and copied at the public reference facilities maintained by the
Commission referred to below.

The Company is subject to the informational requirements of the Exchange
Act, and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and information
filed by the Company with the Commission pursuant to the informational
requirements of the Exchange Act may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices located at Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained at prescribed rates by
writing the Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material may also be accessed electronically by
means of the Commission's home page on the Internet at http://www.sec.gov. Any
reports, proxy

50
<PAGE>
statements and other information filed with the Commission prior to February 19,
1997 can be inspected at the offices of the Nasdaq National Market, 1735 K
Street, N.W., Washington, D.C. 20006. Reports, proxy statements and other
information filed with the Commission after such date will be available for
inspection at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus
and shall be deemed to be a part hereof:

1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as amended.

2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.

3. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996.

4. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996.

5. The Company's Current Report on Form 8-K, dated January 29, 1996, as
amended by its Form 8-K/A filed on March 29, 1996.

6. The Company's Current Report on Form 8-K, dated May 31, 1996, as
amended by its Form 8-K/A No. 1 filed on June 4, 1996.

7. The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed on August 8, 1994.

All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the Offering shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from their respective
dates of filing. Any statement contained herein or in any document incorporated
or deemed to be incorporated shall be deemed to be modified or superseded for
all purposes of this Prospectus to the extent that a statement contained in this
Prospectus or in any subsequently filed document which also is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon written or oral request of such person,
a copy of any and all of the information that has been incorporated by reference
in this Prospectus (other than exhibits thereto, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates). Requests should be directed to: Tower Automotive, Inc., 4508 IDS
Center, Minneapolis, Minnesota 55402, Attention: Shareholder Services (telephone
number (612) 342-2310).

51
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

Report of Independent Public Accountants................................................................. F-2

Consolidated Balance Sheets as of December 31, 1995 and 1996............................................. F-3

Consolidated Statements of Operations for the years ended December 31, 1994, 1995 and 1996............... F-4

Consolidated Statements of Stockholders' Investment for the years ended December 31, 1994, 1995 and
1996................................................................................................... F-5

Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1995 and 1996............... F-6

Notes to Consolidated Financial Statements............................................................... F-7

AUTOMOTIVE PRODUCTS COMPANY, A DIVISION OF A. O. SMITH CORPORATION

Report of Independent Public Accountants................................................................. F-21

Combined Statements of Net Assets to be Acquired as of December 31, 1995 and 1996........................ F-22

Combined Statements of Revenues and Expenses for the years ended December 31, 1994, 1995 and 1996........ F-23

Combined Statements of Cash Flows for the years ended December 31, 1994, 1995 and 1996................... F-24

Notes to Combined Financial Statements................................................................... F-25
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Tower Automotive, Inc.:

We have audited the accompanying consolidated balance sheets of Tower
Automotive, Inc. (a Delaware corporation) and Subsidiaries as of December 31,
1995 and 1996, and the related consolidated statements of operations,
stockholders' investment and cash flows for each of the three years in the
period ended December 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Tower
Automotive, Inc. and Subsidiaries as of December 31, 1995 and 1996, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996 in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota,

February 18, 1997

F-2
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1996
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................................... $ 957 $ 39,596
Accounts receivable..................................................................... 39,133 61,073
Inventories............................................................................. 11,398 21,864
Prepaid tooling and other............................................................... 10,338 14,433
---------- ----------
Total current assets.................................................................. 61,826 136,966
---------- ----------
Property, plant and equipment, at cost:
Land.................................................................................... 984 1,989
Buildings and improvements.............................................................. 22,934 34,417
Machinery and equipment................................................................. 56,826 118,567
Construction in progress................................................................ 17,034 21,839
---------- ----------
97,778 176,812
Less-Accumulated depreciation........................................................... (10,191) (20,564)
---------- ----------
Net property, plant and equipment..................................................... 87,587 156,248
Restricted cash........................................................................... 14,385 10,833
Other assets:
Goodwill................................................................................ 40,027 89,429
Other................................................................................... 7,836 9,507
Less-Accumulated amortization........................................................... (2,185) (4,376)
---------- ----------
Net other assets...................................................................... 45,678 94,560
---------- ----------
$ 209,476 $ 398,607
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term debt.................................................... $ 779 $ 722
Accounts payable........................................................................ 19,022 32,280
Accrued liabilities..................................................................... 9,780 22,429
---------- ----------
Total current liabilities............................................................. 29,581 55,431
---------- ----------
Long-term debt, net of current maturities................................................. 70,300 113,460
Deferred income taxes..................................................................... 1,305 12,302
Other noncurrent liabilities.............................................................. 22,705 35,537
---------- ----------
Commitments and contingencies (Notes 3, 4 and 8)
Stockholders' investment:
Preferred stock, par value $1; 5,000,000 shares authorized; no shares issued or
outstanding........................................................................... -- --
Common stock, par value $.01; 30,000,000 shares authorized; 10,830,389 and 14,283,793
issued and outstanding................................................................ 108 143
Warrants to acquire common stock........................................................ -- 2,000
Additional paid-in capital.............................................................. 63,461 136,759
Retained earnings....................................................................... 22,513 43,150
Common stock subscriptions receivable................................................... (497) (175)
---------- ----------
Total stockholders' investment........................................................ 85,585 181,877
---------- ----------
$ 209,476 $ 398,607
---------- ----------
---------- ----------
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-3
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1994 1995 1996
<S> <C> <C> <C>
Revenues..................................................................... $ 165,526 $ 222,801 $ 399,925
Cost of sales................................................................ 142,986 185,388 338,290
---------- ---------- ----------
Gross profit............................................................... 22,540 37,413 61,635
Selling, general and administrative expenses................................. 7,435 14,308 20,004
Amortization expense......................................................... 803 1,185 2,191
---------- ---------- ----------
Operating income........................................................... 14,302 21,920 39,440
Interest expense, net........................................................ 1,899 1,799 5,103
---------- ---------- ----------
Income before provision for income taxes................................... 12,403 20,121 34,337
Provision for income taxes................................................... 5,042 8,050 13,700
---------- ---------- ----------
Net income................................................................. $ 7,361 $ 12,071 $ 20,637
---------- ---------- ----------
---------- ---------- ----------
Net income applicable to common stockholders............................... $ 7,476 $ 12,247 $ 20,765
---------- ---------- ----------
---------- ---------- ----------
Net income per common and common equivalent share.......................... $ 0.86 $ 1.05 $ 1.55
---------- ---------- ----------
---------- ---------- ----------
Weighted average common and common equivalent shares outstanding........... 8,720 11,697 13,423
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-4
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT

(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL COMMON STOCK WARRANTS TO
------------------------- PAID-IN RETAINED SUBSCRIPTIONS ACQUIRE COMMON
SHARES AMOUNT CAPITAL EARNINGS RECEIVABLE STOCK
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993............. 4,358,708 $ 44 $ 8,137 $ 3,081 $ (439) $ --
Retirement of common stock............. (5,327) -- (14) -- 5 --
Private placement of common stock...... 1,585,365 15 4,081 -- (404) --
Initial public offering of common
stock, net........................... 4,887,500 49 51,223 -- -- --
Net income............................. -- -- -- 7,361 -- --
------------ ----- ---------- --------- ----- ------
Balance, December 31, 1994............. 10,826,246 108 63,427 10,442 (838) --
Sales of stock under Employee Stock
Discount Purchase Plan............... 4,143 -- 34 -- -- --
Collection of common stock
subscriptions receivable............. -- -- -- -- 341 --
Net income............................. -- -- -- 12,071 -- --
------------ ----- ---------- --------- ----- ------
Balance, December 31, 1995............. 10,830,389 108 63,461 22,513 (497) --
Conversion of subordinated notes....... 410,529 4 2,488 -- -- --
Exercise of options.................... 6,625 -- 48 -- -- --
Sales of stock under Employee Stock
Discount Purchase Plan............... 18,350 1 262 -- -- --
Collection of common stock
subscriptions receivable............. -- -- -- -- 322 --
Public offering of common stock, net... 2,232,900 22 51,275 -- -- --
Issuance of shares and warrants in
acquisition of MSTI.................. 785,000 8 19,225 -- -- 2,000
Net income............................. -- -- -- 20,637 -- --
------------ ----- ---------- --------- ----- ------
Balance, December 31, 1996............. 14,283,793 $ 143 $ 136,759 $ 43,150 $ (175) $ 2,000
------------ ----- ---------- --------- ----- ------
------------ ----- ---------- --------- ----- ------
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-5
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------
1994 1995 1996
<S> <C> <C> <C>
Operating activities:
Net income............................................................. $ 7,361 $ 12,071 $ 20,637
Adjustments to reconcile net income to net cash provided by (used for)
operating activities:
Depreciation and amortization........................................ 4,138 6,549 12,754
Deferred income tax provision........................................ 2,149 5,659 6,326
Changes in other operating items--
Accounts receivable................................................ (9,923) (4,124) 5,967
Inventories........................................................ (551) 468 (693)
Prepaid tooling and other.......................................... (4,248) (922) (1,091)
Accounts payable and accrued liabilities........................... (6,411) 2,323 (3,354)
Other assets and liabilities....................................... (2,890) (8,119) (10,497)
----------- ------------ ------------
Net cash provided by (used for) operating activities............. (10,375) 13,905 30,049
----------- ------------ ------------
Investing activities:
Capital expenditures, net.............................................. (28,524) (26,148) (16,253)
Acquisitions, net of cash acquired..................................... (38,263) -- (76,223)
Change in restricted cash.............................................. (6,479) (7,906) 3,552
----------- ------------ ------------
Net cash used for investing activities........................... (73,266) (34,054) (88,924)
----------- ------------ ------------
Financing activities:
Proceeds from issuance of debt......................................... 51,313 183,103 197,813
Repayments of debt..................................................... (23,420) (162,427) (152,229)
Proceeds from sale of stock, net....................................... 54,964 -- 51,297
Proceeds from sales of stock under Employee Stock Discount Purchase
Plan................................................................. -- 34 263
Other, net............................................................. (9) 341 370
----------- ------------ ------------
Net cash provided by financing activities........................ 82,848 21,051 97,514
----------- ------------ ------------
Net change in cash and cash equivalents.................................. (793) 902 38,639
Cash and cash equivalents:
Beginning of period.................................................... 848 55 957
----------- ------------ ------------
End of period.......................................................... $ 55 $ 957 $ 39,596
----------- ------------ ------------
----------- ------------ ------------
Supplemental cash flow information:
Cash paid for--
Interest, net of amounts capitalized................................. $ 1,914 $ 2,993 $ 7,372
----------- ------------ ------------
----------- ------------ ------------
Income taxes......................................................... $ 2,338 $ 1,702 $ 6,091
----------- ------------ ------------
----------- ------------ ------------
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-6
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION:

Tower Automotive, Inc. (the Company) designs and manufactures structural
metal stampings and assemblies for use by original equipment manufacturers in
the North American automotive industry and has manufacturing facilities located
in Michigan, Indiana, Kentucky and Ohio.

2. SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION:

The accompanying consolidated financial statements include the accounts of
Tower Automotive, Inc. and its wholly owned subsidiaries. All material
intercompany accounts and transactions have been eliminated in consolidation.

CASH EQUIVALENTS:

Cash equivalents consist of highly liquid investments with an original
maturity of three months or less. Cash equivalents are stated at cost which
approximates fair value.

INVENTORIES:

Inventories are valued at the lower of first-in, first-out (FIFO) cost or
market.

Inventories consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
<S> <C> <C>
Raw materials........................................................... $ 4,836 $ 9,517
Work in process......................................................... 3,431 5,949
Finished goods.......................................................... 3,131 6,398
--------- ---------
$ 11,398 $ 21,864
--------- ---------
--------- ---------
</TABLE>

CUSTOMER TOOLING AND OTHER DESIGN COSTS:

Customer tooling represents costs incurred by the Company in the development
of new tooling used in the manufacture of the Company's products. Once customer
approval is obtained for the manufacture of a new product, the Company is
reimbursed by its customers for the cost of certain of the tooling, at which
time the tooling becomes the property of the customers.

In addition, the Company has certain other tooling and design costs related
to previously proven product designs which are reimbursed by the Company's
customers as the related product is sold through an incremental increase in each
product's unit selling price. Such costs are capitalized and amortized using the
unit of production method over the life of the related tool. Amounts capitalized
and included in other assets were $3.8 million at December 31, 1995 and $3.7
million at December 31, 1996. If the Company forecasts that the amount of
capitalized tooling and design costs exceeds the amount to be realized through
the sale of product, a loss is recognized currently.

F-7
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment acquired in the acquisitions discussed in Note
3 was recorded at its fair value, determined based on appraisals, as of the
respective acquisition dates. Additions to property, plant and equipment
following the acquisitions are stated at cost. For financial reporting purposes,
depreciation and amortization are provided using the straight-line method over
the following estimated useful lives:

<TABLE>
<S> <C>
15 to 30
Buildings and improvements................................... years
Machinery and equipment...................................... 3 to 20 years
</TABLE>

Accelerated depreciation methods are used for tax reporting purposes.

Start-up costs related to major facilities and new platforms are capitalized
and amortized over the life of the related platform, generally five years. The
unamortized start-up cost balance was $876,000 at December 31, 1995 and
$1,011,000 at December 31, 1996.

Interest is capitalized during the construction of major facilities and is
amortized over the related estimated useful lives. Interest costs of $1,157,000
were capitalized during the year ended December 31, 1995. No interest was
capitalized during the year ended December 31, 1996.

Maintenance and repairs are charged to expense as incurred. Major
betterments and improvements which extend the useful life of the related item
are capitalized and depreciated. The cost and accumulated depreciation of
property, plant and equipment retired or otherwise disposed of are removed from
the related accounts, and any residual values are charged or credited to income.

OTHER ASSETS:

Goodwill represents the excess of the purchase price over the fair value of
the net assets acquired and is being amortized on a straight-line basis over 40
years. Debt issue costs are amortized on a straight-line basis over the term of
the related obligations.

The Company periodically evaluates whether events and circumstances have
occurred which may affect the estimated useful life or the recoverability of the
remaining balance of its goodwill and other long-lived assets. If such events or
circumstances were to indicate that the carrying amount of these assets were not
recoverable, the Company would estimate the future cash flows expected to result
from the use of the assets and their eventual disposition. If the sum of the
expected future cash flows (undiscounted and without interest charges) were less
than the carrying amount of goodwill, the Company would recognize an impairment
loss.

INCOME TAXES:

The Company accounts for income taxes under the liability method, whereby
deferred income taxes are recognized at currently enacted income tax rates to
reflect the tax effect of temporary differences between the financial reporting
and tax bases of assets and liabilities.

NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE:

Net income per common and common equivalent share is computed by dividing
net income applicable to common stockholders by the weighted average number of
common and common stock equivalent shares

F-8
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
outstanding during each period presented. Common stock issued and common stock
options granted within one year immediately preceding the initial public
offering of common stock (Common Stock) discussed in Note 4 at prices below the
public offering price have been reflected in the net income per share
calculation as if they had been outstanding for all periods presented. Net
income for purposes of computing net income per common and common equivalent
share reflects the elimination of interest expense on the convertible
subordinated notes, net of the related income tax benefit.

USE OF ESTIMATES:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. The ultimate results could differ from those estimates.

3. ACQUISITIONS:

On May 4, 1994, the Company acquired the operating assets and assumed
certain operating liabilities and indebtedness of Edgewood Tool and
Manufacturing Company (Edgewood), a manufacturer of hood and deck lid hinges and
structural metal components for the automotive industry, for total consideration
of $24.6 million in cash and assumed indebtedness and the issuance of $5.0
million of Convertible Subordinated Notes. In addition, the Company entered into
a five year employment agreement with Edgewood's former president and issued an
option to acquire 102,984 shares of Common Stock at an exercise price of $6.55
per share.

On June 29, 1994, the Company acquired the capital stock of Kalamazoo
Stamping and Die Company (Kalamazoo), a supplier of structural metal stampings
and assemblies for the automotive industry, for net consideration of
approximately $12.3 million in cash.

On January 16, 1996, the Company acquired all of the outstanding common
stock of Trylon Corporation (Trylon) for total consideration of approximately
$25 million. The acquisition was financed with the proceeds of a $25 million
term loan. Trylon manufactures metal stampings and assemblies for the North
American automotive industry from four facilities in Traverse City, Michigan.

On May 31, 1996, the Company acquired all of the outstanding common stock of
MascoTech Stamping Technologies, Inc. (MSTI), a wholly owned subsidiary of
MascoTech, Inc. (MascoTech). Consideration consisted of $55 million in cash,
785,000 shares of the Company's Common Stock and warrants to acquire 200,000
shares of the Company's Common Stock at an exercise price of $18 per share. The
Company may also make additional payments of up to $30 million to MascoTech if
certain operating targets are achieved by the MSTI facilities in the first three
years following the acquisition. Based on results of operations of the MSTI
facilities through December 31, 1996, no contingent payments are due. MSTI
manufactures metal chassis and suspension components and assemblies for the
North American automotive industry from facilities in Ohio, Indiana and
Michigan.

These acquisitions have been accounted for using the purchase method of
accounting and, accordingly, the assets acquired and liabilities assumed have
been recorded at fair value as of the dates of the acquisitions. The assets and
liabilities of Trylon and MSTI have been recorded based upon preliminary
estimates of fair value as of the dates of acquisition. The Company does not
believe the final allocations of

F-9
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. ACQUISITIONS: (CONTINUED)
the purchase price will be materially different than the preliminary
allocations. The excess of the purchase price over the fair value of the assets
acquired and liabilities assumed has been recorded as goodwill. Results of
operations for these acquisitions have been included in the accompanying
consolidated financial statements since the dates of acquisition. The
accompanying unaudited consolidated pro forma results of operations for the
years ended December 31, 1995 and 1996 give effect to the Offering (as defined
in Note 4) and the acquisitions of Trylon and MSTI as if they were completed at
the beginning of the respective periods. The unaudited pro forma financial
information does not purport to represent what the Company's results of
operations would actually have been if such transactions in fact had occurred at
such date or to project the Company's results of future operations (in
thousands, except per share data):

<TABLE>
<CAPTION>
PRO FORMA YEARS ENDED
DECEMBER 31,
----------------------
1995 1996
<S> <C> <C>
Revenues.............................................................. $ 423,607 $ 473,728
---------- ----------
---------- ----------
Net income applicable to common stockholders.......................... $ 17,249 $ 23,982
---------- ----------
---------- ----------
Weighted average common and common equivalent shares outstanding...... 14,482 14,802
---------- ----------
---------- ----------
Net income per common and common equivalent share..................... $ 1.19 $ 1.62
---------- ----------
---------- ----------
</TABLE>

4. STOCKHOLDERS' INVESTMENT:

PUBLIC OFFERINGS OF COMMON STOCK:

In August 1994, the Company completed an initial public offering, including
shares issued pursuant to the underwriters' over-allotment option, of 4,887,500
shares of its Common Stock at $11.50 per share resulting in net proceeds to the
Company of approximately $51.3 million.

During 1996, the Company completed an offering of 2,232,900 shares of its
Common Stock at an offering price of $24.50 per share (the 1996 Offering)
resulting in net proceeds of approximately $51.3 million. Proceeds from the 1996
Offering were used by the Company to retire borrowings under its secured credit
agreement and for general corporate purposes.

PRIVATE PLACEMENTS:

During 1993, the Company sold 522,640 shares of its Common Stock to certain
employees for aggregate proceeds of approximately $981,000. Approximately
$434,000 of this amount was financed through notes to the Company which bear
interest at prime plus 1% (9.5% at December 31, 1995 and 9.25% at December 31,
1996) and are due in 1998. These notes are reflected as a reduction of
stockholders' investment in the accompanying consolidated financial statements.
Approximately $248,000 and $330,000 of these notes had been collected as of
December 31, 1995 and 1996.

As a component of the financing for the acquisition of Edgewood in May 1994
(See Note 3), the existing stockholders and members of the Company's management
participated in a $4.1 million private placement of 1,585,365 shares of Common
Stock, resulting in net cash proceeds to the Company of $3.7 million.
Approximately $404,000 of this amount was financed through notes to the Company
which bear interest at prime plus 1% and are due in 1999. These notes are
reflected as a reduction of

F-10
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. STOCKHOLDERS' INVESTMENT: (CONTINUED)
stockholders' investment in the accompanying consolidated financial statements.
Approximately $93,000 and $333,000 of these notes had been collected as of
December 31, 1995 and 1996.

STOCK OPTION PLAN:

The Company sponsors the 1994 Key Employee Stock Option Plan (the Stock
Option Plan), under which any person who is a full-time, salaried employee of
the Company (excluding non-management directors) is eligible to participate in
the Stock Option Plan (an Employee Participant). A committee of the board of
directors selects the Employee Participants and determines the terms and
conditions of the options. The Stock Option Plan provides for the issuance of
options up to 500,000 shares of Common Stock at exercise prices equal to the
stock market price on the date of grant to Employee Participants, subject to
certain adjustments reflecting changes in the Company's capitalization.
Information regarding the Stock Option Plan is as follows:

<TABLE>
<CAPTION>
1995 1996
-------------------------- --------------------------
SHARES SHARES
UNDER EXERCISE UNDER EXERCISE
OPTION PRICES OPTION PRICES
<S> <C> <C> <C> <C>
Outstanding at beginning of year......................... -- $-- 120,750 $8.00-10.00
Granted................................................ 133,750 8.00-10.00 139,000 15.125
Exercised.............................................. -- -- (6,625) 8.00
Forfeited.............................................. (13,000) 8.00 (4,875) 8.00-15.125
---------- -------------- ---------- --------------
Outstanding at end of year............................... 120,750 $8.00-10.00 248,250 $8.00-15.125
---------- -------------- ---------- --------------
Exercisable at end of year............................... -- $-- 27,625 $8.00-10.00
---------- -------------- ---------- --------------
Weighted average fair value of options granted........... $ 4.23 $ 9.51
---------- -------------- ---------- --------------
</TABLE>

INDEPENDENT DIRECTOR STOCK OPTION PLAN:

In February 1996, the Company's board of directors approved the Tower
Automotive, Inc. Independent Director Stock Option Plan (the Director Option
Plan) that provides for the issuance of options to Independent Directors, as
defined, to acquire up to 100,000 shares of the Company's Common Stock, subject
to certain adjustments reflecting changes in the Company's capitalization. The
option exercise price must be at least equal to the fair value of the Common
Stock at the time the option is issued. Vesting is determined by the Board of
Directors at the date of grant and in no event can be less than six months from
the date of grant. As of December 31, 1996, the Company had granted stock
options under this plan to acquire 22,500 shares of Common Stock at an exercise
price of $15.125 per share. None of these director options were exercisable or
vested at December 31, 1996.

EMPLOYEE STOCK PURCHASE PLAN:

The Company also sponsors an employee stock discount purchase plan which
provides for the sale of up to 500,000 shares of the Company's Common Stock at
discounted purchase prices, subject to certain limitations. The cost per share
under this plan is 85% of the market value of the Company's Common Stock at the
date of purchase, as defined. During the year ended December 31, 1995, 4,143
shares of Common Stock were issued to employees pursuant to this plan and during
the year ended December 31,

F-11
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. STOCKHOLDERS' INVESTMENT: (CONTINUED)
1996, 18,350 shares of Common Stock were issued. The weighted average fair value
of shares sold in 1995 and 1996 were $8.11 and $14.32, respectively.

STOCK-BASED COMPENSATION PLANS:

As discussed above, the Company has two stock option plans, the Stock Option
Plan and the Independent Director Stock Option Plan, and an Employee Stock
Purchase Plan. The Company accounts for these plans under APB Opinion No. 25,
under which no compensation cost has been recognized. Had compensation cost for
these plans been determined consistent with Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation," (SFAS No. 123),
the Company's pro forma net income and pro forma earnings per share would have
been as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
--------------------
1995 1996
<S> <C> <C> <C>
Net income applicable to common stockholders........... As Reported $ 12,247 $ 20,765
Pro Forma $ 12,213 $ 20,611

Net income per common and common equivalent share...... As Reported $ 1.05 $ 1.55
Pro Forma $ 1.04 $ 1.54
</TABLE>

Because the SFAS No. 123 method of accounting has not been applied to
options granted prior to January 1, 1995, the resulting pro forma compensation
cost may not be representative of that to be expected in future years. The
effect of the stock offered under the Employee Stock Purchase Plan was not
material for 1995 and 1996.

The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes option pricing model with the following weighted average
assumptions: risk free interest rates of 6.5%, 6.9% and 6.93% in 1995 and 5.57%
in 1996; expected life of seven years for 1995 and 1996; expected volatility of
35%, 37% and 41% in 1995 and 56% in 1996.

OTHER COMMON STOCK EQUIVALENTS:

In connection with the acquisition of Edgewood in May 1994, the Company
issued an option to acquire 102,984 shares of Common Stock at an exercise price
of $6.55 per share. The options expire in 2004. As of December 31, 1996, 34,328
options were vested and exercisable.

In connection with the acquisition of MSTI in May 1996, the Company issued
warrants to MascoTech to acquire 200,000 shares of Common Stock at an exercise
price of $18 per share. The warrants expire in 2006.

F-12
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. LONG-TERM DEBT:

Long-term debt consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1996
<S> <C> <C>
Revolving credit facility, due January 2001, interest at prime or LIBOR
plus .75% (8.5% at December 31, 1995)................................ $ 18,631 $ --
Series A senior notes, due June 1, 2006, interest at 7.65% payable
semi-annually........................................................ -- 40,000
Series B senior notes, due June 1, 2008, interest at 7.82% payable
semi-annually........................................................ -- 25,000
Industrial development revenue bonds, due June 1, 2024, interest
payable monthly at a rate adjusted weekly by the bond remarketing
agent (5.85% at December 31, 1995 and 5.82% at December 31, 1996).... 23,765 23,765
Industrial development revenue bonds, due March 1, 2025, interest
payable monthly at a rate adjusted weekly by the bond remarketing
agent (5.85% at December 31, 1995 and 5.82% at December 31, 1996).... 20,000 20,000
Industrial development revenue bonds, due in annual installments of
$720 through September 2000, interest payable monthly at a rate
adjusted weekly as determined by the bond remarketing agent (4.65% at
December 31, 1995 and 4.4% at December 31, 1996)..................... 3,600 2,878
Convertible subordinated notes, due May 2003, interest at 5.75% payable
quarterly............................................................ 5,000 2,508
Other.................................................................. 83 31
--------- ----------
71,079 114,182
Less-Current maturities................................................ (779) (722)
--------- ----------
$ 70,300 $ 113,460
--------- ----------
--------- ----------
</TABLE>

Future maturities of long-term debt as of December 31, 1996 are as follows
(in thousands):

<TABLE>
<S> <C>
1997.............................................................. $ 722
1998.............................................................. 720
1999.............................................................. 720
2000.............................................................. 6,434
2001.............................................................. 5,714
Thereafter........................................................ 99,872
---------
$ 114,182
---------
---------
</TABLE>

Included in the Company's credit agreement, as amended (the Credit
Agreement), is a revolving credit facility which provides for borrowings of up
to $75 million. The Credit Agreement also provides for the issuance of up to $50
million in letters of credit to collateralize the outstanding industrial
development

F-13
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. LONG-TERM DEBT: (CONTINUED)
revenue bonds. Available credit under this agreement is limited to eligible
accounts receivable and inventories, as defined, which exceeded $75 million at
December 31, 1996. The weighted average interest rate for borrowings under the
revolving credit facility was 7.4% for the year ended December 31, 1995 and 6.1%
for the year ended December 31, 1996. In connection with the transaction
described in Note 10, the Company obtained a commitment from a bank to refinance
the existing Credit Agreement.

The Company financed the cash portion of the MSTI acquisition through the
issuance in two series of Senior Notes having an aggregate principal amount of
$65 million. The Senior Notes require the Company to make semi-annual interest
payments commencing December 1, 1996, while principal is payable in varying
annual installments beginning in 2000. Net proceeds from the sale of the Senior
Notes in excess of the amounts used to finance the cash portion of the MSTI
acquisition, together with borrowings under the revolving credit facility, were
used to repay in full the remaining balance outstanding on a $25 million term
loan incurred by the Company in connection with the acquisition of Trylon.

In connection with the acquisition of Edgewood in May 1994, the Company
issued the $5.0 million Convertible Subordinated Notes, which generally are
convertible at any time into 823,874 shares of Common Stock. The Convertible
Subordinated Notes are subject to prepayment in the event of, and become
convertible upon, a sale of the Company and are subordinated to all other debt
of the Company which is not expressly subordinated to the Convertible
Subordinated Notes. As of December 31, 1996, approximately $2.5 million of these
notes had been converted into 410,529 shares of Common Stock.

In June 1994 and March 1995, the Company issued $25.0 million and $20.0
million, respectively, of industrial development revenue bonds related to the
construction and equipping of a manufacturing facility in Bardstown, Kentucky.
The bonds are collateralized by letters of credit. The facility will be
completed in two phases. The undispersed proceeds from these bonds are invested
in treasury securities and reflected as restricted cash in the accompanying
consolidated balance sheets. The Company also has approximately $2.9 million in
outstanding indebtedness relating to industrial development revenue bonds issued
in connection with the construction of its Auburn, Indiana plant. The bonds are
collateralized by a letter of credit, certain equipment and a mortgage on this
plant.

The debt agreements described above contain various restrictive covenants
which, among other matters, require the Company to maintain certain financial
ratios. The agreements also limit additional indebtedness, capital expenditures
and cash dividends. The Company was in compliance with all debt covenants as of
December 31, 1995 and 1996.

6. INCOME TAXES:

The income tax provision consisted of the following (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
<S> <C> <C> <C>
Currently payable............................................... $ 2,893 $ 2,391 $ 7,374
Deferred income tax provision................................... 2,149 5,659 6,326
--------- --------- ---------
$ 5,042 $ 8,050 $ 13,700
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-14
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. INCOME TAXES: (CONTINUED)
The deferred income tax provision consisted of the following (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
<S> <C> <C> <C>
Depreciation lives and methods................................... $ 542 $ 2,624 $ 3,348
Accrued compensation costs....................................... 316 1,064 (915)
Other reserves and accruals...................................... 1,291 1,971 3,893
--------- --------- ---------
Net deferred income tax provision................................ $ 2,149 $ 5,659 $ 6,326
--------- --------- ---------
--------- --------- ---------
</TABLE>

A reconciliation of income taxes computed at the statutory rates to the
reported income tax provision is as follows for the years ended December 31 (in
thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
<S> <C> <C> <C>
Taxes at federal statutory rates................................ $ 4,341 $ 7,042 $ 12,018
State income taxes, net of federal benefit...................... 496 829 1,199
Effect of permanent differences, primarily goodwill
amortization.................................................. 205 179 483
--------- --------- ---------
Provision for income taxes...................................... $ 5,042 $ 8,050 $ 13,700
--------- --------- ---------
--------- --------- ---------
</TABLE>

Current deferred income taxes as of December 31, 1995 and 1996 are not
material and accordingly are included in the deferred income tax liability. A
summary of deferred income tax liabilities (assets) is as follows as of December
31 (in thousands):

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Depreciation lives and methods........................................... $ 8,485 $ 28,770
Postretirement benefit obligations....................................... (4,084) (5,486)
Accrued compensation costs............................................... (947) (2,453)
Other reserves and accruals not currently deductible for tax purposes.... (4,494) (8,529)
Valuation allowance...................................................... 2,345 --
--------- ---------
Net deferred income tax liability........................................ $ 1,305 $ 12,302
--------- ---------
--------- ---------
</TABLE>

As of December 31, 1995, the Company had provided a valuation allowance for
certain deferred tax assets as their realization was not reasonably assured.
During 1996, the Company determined it was more likely than not that the
deferred tax assets would be realized. Accordingly, the valuation allowance was
eliminated as a reduction to goodwill.

F-15
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. MAJOR CUSTOMERS:

The Company sells its products directly to automobile manufacturers.
Following is a summary of customers that accounted for more than 10% of
consolidated revenues for the three years in the period ended December 31, 1996:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1994 1995 1996
<S> <C> <C> <C>
Ford..................................................................... 68% 68% 67%
Honda.................................................................... 11% 15% 9%
Chrysler................................................................. 9% 10% 10%
</TABLE>

Receivables from these customers represented 85% of total accounts
receivable at December 31, 1995 and 70% of total accounts receivable at December
31, 1996.

8. COMMITMENTS:

RETIREMENT PLANS:

The Company contributes to a union sponsored multi-employer pension plan
providing defined benefits to certain Michigan hourly employees. Contributions
to the pension plan are based on rates set forth in the Company's union
contracts. The expense related to this plan was $680,000 for the year ended
December 31, 1994, $788,000 for the year ended December 31, 1995 and $852,000
for the year ended December 31, 1996. The plan was substantially fully funded as
of the latest valuation date.

The Company also has a qualified profit sharing retirement plan and 401(k)
employee savings plan covering certain salaried and hourly employees. The
expense related to these plans was $1,137,000 during 1994, $1,157,000 during
1995 and $2,803,000 during 1996.

The Company sponsors a 401(k) employee savings plans covering certain union
employees. The Company matches a portion of the employee contributions made to
these plans. The expense under this plan in each of the three years in the
period ended December 31, 1996 was not material.

The Company's UAW Retirement Income Plan covers substantially all union
employees at its Kalamazoo and Bluffton facilities. Benefits under the plan are
based on years of service. Contributions by the Company are intended to provide
not only for benefits attributed to service to date, but also for those benefits
expected to be earned in the future. The Company's funding policy is to
contribute annually the amounts sufficient to meet the higher of the minimum
funding requirements set forth in the Employee Retirement Income Security Act of
1974 or the minimum funding requirements under the Company's UAW contract. Net
pension expense for the years ended December 31, 1994, 1995 and 1996 consisted
of the following (in thousands):

<TABLE>
<CAPTION>
1994 1995 1996
<S> <C> <C> <C>
Service cost-benefits earned during the period...................... $ 51 $ 117 $ 219
Interest cost on projected benefit obligation....................... 77 170 219
Return on plan assets............................................... 83 (504) (337)
Net amortization and deferral....................................... (192) 282 136
--------- --------- ---------
Net pension expense................................................. $ 19 $ 65 $ 237
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-16
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. COMMITMENTS: (CONTINUED)
The following table sets forth the UAW plan's funded status as of December
31 (in thousands):

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation................................................ $ 2,509 $ 2,464
--------- ---------
--------- ---------
Accumulated and projected benefit obligation............................. $ 3,113 $ 3,031
Plan assets at fair value.................................................. 2,838 3,146
--------- ---------
Projected benefit obligation (greater) less than plan assets............. (275) 115
Unrecognized net transition asset.......................................... (254) (223)
Unrecognized prior service cost............................................ 706 770
Additional minimum liability............................................... (694) (70)
Unrecognized net loss (gain)............................................... 242 (350)
--------- ---------
Prepaid (accrued) pension costs............................................ $ (275) $ 242
--------- ---------
--------- ---------
</TABLE>

The discount rate used in determining the actual present value of the
projected benefit obligation was 7% in 1995 and 7.5% 1996. The expected
long-term rate of return on plan assets was 8% for December 31, 1995 and 1996.
Plan assets consist principally of mutual funds invested in bonds and equity
securities.

DEFERRED COMPENSATION PLAN:

The Company had salary continuation agreements with three employees which
provided for certain payments beginning with the later of retirement or
attainment of age 62, or in the event of death or disability. During 1995 two of
these employees received payments totaling $529,000 as a result of their
retirement. The expense under this plan has not historically been significant.
The Company's total obligation under these agreements was $318,000 as of
December 31, 1995 and $334,000 as of December 31, 1996 and was included in
noncurrent liabilities in the accompanying consolidated balance sheets.

POSTRETIREMENT PLANS:

The Company provides certain medical insurance benefits for retired
employees. Certain employees of the Company are eligible for these benefits if
they remain employed until age 55 or 59 and fulfill other eligibility
requirements specified by the plans. Certain retirees between the ages of 55 and
62 must contribute 100% of the group rate for active employees. No contributions
are required for retirees 62 or older. Benefits are continued for dependents of
eligible retiree participants after the death of the retiree.

Net periodic postretirement benefit cost consisted of the following for the
periods ended December 31 (in thousands):

<TABLE>
<CAPTION>
1994 1995 1996
<S> <C> <C> <C>
Service cost-benefits earned during the period........................ $ 175 $ 276 $ 174
Interest cost on accumulated postretirement benefit obligation........ 463 636 707
--------- --------- ---------
Net periodic postretirement benefit cost.............................. $ 638 $ 912 $ 881
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-17
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. COMMITMENTS: (CONTINUED)

The Company funds benefits under the plan as they are incurred. A summary of
the accumulated present value of the postretirement benefit obligation included
in other noncurrent liabilities as of December 31 is as follows (in thousands):

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Retirees................................................................ $ 4,613 $ 5,920
Active employees eligible to retire..................................... 1,523 1,752
Active employees not eligible to retire................................. 4,020 6,341
--------- ---------
Accrued postretirement benefit costs.................................. $ 10,156 $ 14,013
--------- ---------
--------- ---------
</TABLE>

The projected postretirement benefit obligation is calculated using a 7.5%
annual rate of increase in per capita claims cost in 1995 and 7.0% in 1996. This
rate is assumed to decrease by one half of one percent per year through 1997. In
1998, the rate is assumed to be 6.5% and remain at that level for all years
thereafter.

If the health care cost trend rate were increased one percentage point, the
accumulated postretirement benefit obligation and the aggregate of the service
and interest cost discussed above would have increased by 12%.

LEASES:

The Company leases office and manufacturing space, including the lease
described in Note 9, and certain equipment under operating lease agreements
which require it to pay maintenance, insurance, taxes and other expenses in
addition to annual rentals. Future annual rental commitments at December 31,
1996 under these operating leases are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR AMOUNT
<S> <C>
1997....................................................................... $ 1,799
1998....................................................................... 1,450
1999....................................................................... 1,969
2000....................................................................... 107
2001....................................................................... 24
Thereafter................................................................. 52
---------
$ 5,401
---------
---------
</TABLE>

Rent commitments associated with acquired facilities which will not be
utilized by the Company have been excluded from the above amounts and will be
provided for in the recording of the related acquisition, as discussed in Note
3.

9. RELATED PARTY TRANSACTIONS:

The Company leases a manufacturing facility from a partnership whose major
partners are former stockholders of Edgewood and are current employees of the
Company. The lease expires February 28, 1999. Expense under this lease was
$298,000 for the year ended December 31, 1994, $454,000 for the year ended
December 31, 1995 and $475,000 for the period from the acquisition of Edgewood
through December 31, 1996.

F-18
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. RELATED PARTY TRANSACTIONS: (CONTINUED)
The Company has made payments to Hidden Creek Industries, an affiliate of
the Company, for certain acquisition related and other management services
totaling $833,000 during 1994 and $750,000 during 1996.

10. AGREEMENT TO ACQUIRE AUTOMOTIVE PRODUCTS COMPANY:

On January 27, 1997, the Company entered into an agreement to acquire and
assume substantially all of the assets and liabilities of the Automotive
Products Company (APC), a division of A.O. Smith Corporation, for $625 million
in cash, subject to certain adjustments. APC, which had revenues of
approximately $860 million for the year ended December 31, 1996, designs and
manufactures frames, frame components, engine cradles, suspension components and
modules for the North American automotive and heavy truck industries. This
acquisition is expected to close during the second quarter of 1997. This
acquisition will be accounted for as a purchase and, accordingly, APC's assets
and liabilities will be recorded at fair value as of the acquisition date, with
any excess purchase price recorded as goodwill.

In connection with this acquisition, the Company agreed to enter into a new
credit facility with a bank. This new facility will provide a total financing
availability of up to $865 million, consisting of term borrowings of up to $340
million payable over 6 1/2 years, a revolving credit facility with a term of
6 1/2 years which allows for borrowings of up to $325 million and up to $200
million in borrowings, payable within 18 months. Interest will be payable on
borrowings under this facility at the bank's base rate plus 1% or LIBOR plus 2%.
The new credit agreement will also include certain restrictive covenants, which
the Company expects will be similar in nature to those in its existing credit
agreement. This facility will become effective contemporaneously with the
completion of the acquisition discussed above.

As part of this refinancing, the Company expects a portion of the proceeds
from the new credit facility will be used to retire the Senior Notes discussed
in Note 5. If the Senior Notes are retired, the Company will record an
extraordinary loss of approximately $3 million, net of income taxes, related to
prepayment penalties and the write-off of previously capitalized deferred
financing costs.

On February 18, 1997, the Company filed a registration statement on Form S-3
with the Securities and Exchange Commission related to the proposed sale of up
to 8,500,000 shares of the Company's Common Stock to the public. The Company
expects this offering will be completed early in the second quarter of 1997.
Proceeds from this offering will be used to fund a portion of the purchase price
related to the acquisition discussed above.

F-19
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. QUARTERLY FINANCIAL DATA (UNAUDITED):

The following is a condensed summary of quarterly results of operations for
1995 and 1996 (in thousands except per share amounts):

<TABLE>
<CAPTION>
NET INCOME PER
COMMON AND
COMMON
GROSS OPERATING EQUIVALENT
REVENUES PROFIT INCOME NET INCOME SHARE
<S> <C> <C> <C> <C> <C>
1995:
First................. $ 58,423 $ 9,696 $ 5,810 $ 3,296 $ 0.29
Second................ 55,175 9,689 5,658 3,060 0.27
Third................. 51,166 8,012 4,126 2,250 0.20
Fourth................ 58,037 10,016 6,326 3,465 0.30
--------- --------- ----------- ----------- -----
$ 222,801 $ 37,413 $ 21,920 $ 12,071 $ 1.05
--------- --------- ----------- ----------- -----
--------- --------- ----------- ----------- -----

1996:
First................. $ 68,921 $ 10,515 $ 6,626 $ 3,188 $ 0.28
Second................ 96,521 15,351 10,307 5,302 0.44
Third................. 114,583 17,041 10,155 5,236 0.36
Fourth................ 119,900 18,728 12,352 6,911 0.47
--------- --------- ----------- ----------- -----
$ 399,925 $ 61,635 $ 39,440 $ 20,637 $ 1.55
--------- --------- ----------- ----------- -----
--------- --------- ----------- ----------- -----
</TABLE>

The sum of the per share amounts for the years ended December 31, 1995 do
not equal the total for the year due to the effects of rounding.

F-20
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To A.O. Smith Corporation:

We have audited the accompanying combined statements of net assets to be
acquired of the Automotive Products Company (a division of A.O. Smith
Corporation--a Delaware corporation) as of December 31, 1995 and 1996, and the
related combined statements of revenues and expenses and cash flows for each of
the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

These financial statements have been prepared to reflect the operations of
A.O. Smith Corporation to be acquired pursuant to the transaction discussed in
Note 1 and are not intended to be a complete presentation of A.O. Smith
Corporation's assets and liabilities, revenues and expenses or cash flows.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets to be acquired of the Automotive
Products Company pursuant to the Asset Purchase Agreement discussed in Note 1 as
of December 31, 1995 and 1996, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota,
January 31, 1997

F-21
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY
(A DIVISION OF A.O. SMITH CORPORATION)

COMBINED STATEMENTS OF NET ASSETS TO BE ACQUIRED

(AMOUNTS IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1996
<S> <C> <C>
Current assets:
Accounts receivable, net of reserves of $1,700 and $1,200............................. $ 83,758 $ 68,827
Inventories........................................................................... 28,458 32,883
Other current assets.................................................................. 36,725 61,832
Deferred income tax benefit........................................................... 7,600 7,600
----------- -----------
Total current assets................................................................ 156,541 171,142
----------- -----------
Property, plant and equipment, at cost:
Land.................................................................................. 2,854 2,854
Buildings and improvements............................................................ 103,013 104,479
Machinery and equipment............................................................... 499,591 556,717
Construction in progress.............................................................. 22,135 104,439
----------- -----------
627,593 768,489
Less-Accumulated depreciation......................................................... (320,738) (360,940)
----------- -----------
Net property, plant and equipment................................................... 306,855 407,549
Other assets, net....................................................................... 5,646 22,620
----------- -----------
Total assets........................................................................ 469,042 601,311
----------- -----------

LIABILITIES

Current liabilities:
Accounts payable...................................................................... 49,620 69,485
Accrued compensation costs............................................................ 25,137 27,336
Other accrued liabilities............................................................. 15,007 10,499
----------- -----------
Total current liabilities........................................................... 89,764 107,320
Postretirement benefit obligation....................................................... 63,566 65,677
Deferred income taxes................................................................... 27,800 35,700
----------- -----------
Commitments and contingencies (Note 7)
Total liabilities................................................................... 181,130 208,697
----------- -----------
Net assets to be acquired......................................................... $ 287,912 $ 392,614
----------- -----------
----------- -----------
</TABLE>

The accompanying notes are an integral part of these combined statements.

F-22
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY
(A DIVISION OF A.O. SMITH CORPORATION)

COMBINED STATEMENTS OF REVENUES AND EXPENSES

(AMOUNTS IN THOUSANDS)

The accompanying notes are an integral part of these combined statements.

F-23
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY
(A DIVISION OF A.O. SMITH CORPORATION)

COMBINED STATEMENTS OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1994 1995 1996
<S> <C> <C> <C>
Operating activities:
Net income.................................................................. $ 35,480 $ 30,984 $ 28,820
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization............................................. 34,100 41,821 50,768
Deferred income tax provision (benefit)................................... (900) 3,900 7,900
Changes in other operating items--
Accounts receivable..................................................... (4,483) (24,770) 14,931
Inventories............................................................. (17,850) 4,492 (4,425)
Other current assets.................................................... (5,919) (8,950) (25,107)
Accounts payable, accrued liabilities and other......................... 1,082 (7,388) 19,667
---------- ---------- ----------
Net cash provided by operating activities............................. 41,510 40,089 92,554
---------- ---------- ----------
Investing activities:
Capital expenditures, net................................................... (59,023) (78,908) (151,534)
Investments in unconsolidated subsidiary.................................... -- (3,750) (16,902)
---------- ---------- ----------
Net cash used in investing activities..................................... (59,023) (82,658) (168,436)

Financing activities:
Advances from Parent........................................................ 17,513 42,569 75,882
---------- ---------- ----------
Net change in cash............................................................ -- -- --

Cash:
Beginning of period......................................................... -- -- --
---------- ---------- ----------
End of period............................................................... $ -- $ -- $ --
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these combined statements.

F-24
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION:

During the periods presented, Automotive Products Company (APC) was a
division of A.O. Smith Corporation (A.O. Smith or Parent). On January 27, 1997,
a wholly owned subsidiary of R.J. Tower Corporation (R.J. Tower) agreed to
acquire and assume substantially all of the assets and liabilities of APC (the
Acquisition--see Note 8). R.J. Tower is a wholly owned subsidiary of Tower
Automotive, Inc. (Tower). The accompanying financial statements reflect the
assets and liabilities, revenues and expenses and cash flows of the operations
conducted by APC to be acquired by R.J. Tower. This presentation is intended to
provide a meaningful representation of the historical financial information of
the acquired operations and is not intended to represent a presentation of the
financial position and results of operations of A.O. Smith. The operations
included in the accompanying financial statements are referred to herein as APC
or the Company. The accompanying financial statements have not been adjusted to
reflect the effects of the Acquisition.

The Company designs, engineers and manufactures stamped structural and
suspension components and assemblies for the automotive and heavy truck
industries and has fifteen facilities in the United States, Canada, South
America, Japan and China.

2. SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF COMBINATION:

The combined financial statements of APC include the accounts of APC, a
division of A.O. Smith, as well as the following operations:

- The automotive products division of A.O. Smith Enterprises Ltd., a
Canadian corporation and a wholly owned subsidiary of the Parent.

- A.O. Smith do Brasil Industria E Comerico Ltda., a Brazilian limited
liability company.

All significant intercompany accounts and transactions have been eliminated
in combination.

INVENTORIES:

Inventories are valued at the lower of last-in, first-out (LIFO) cost or
market and include materials, labor and overhead costs. Inventories consisted of
the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1996
<S> <C> <C>
Raw materials......................................................... $ 4,805 $ 7,858
Work in process....................................................... 24,473 23,393
Finished goods........................................................ 14,872 17,395
LIFO reserve.......................................................... (15,692) (15,763)
---------- ----------
$ 28,458 $ 32,883
---------- ----------
---------- ----------
</TABLE>

During 1996, the Company purchased stamped components from Tower totaling
approximately $13.6 million for use in the manufacture of certain of its
products.

F-25
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
OTHER CURRENT ASSETS:

Other current assets consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
<S> <C> <C>
Prepaid customer tooling................................................ $ 31,104 $ 54,368
Prepaid expenses........................................................ 5,621 7,464
--------- ---------
$ 36,725 $ 61,832
--------- ---------
--------- ---------
</TABLE>

Prepaid customer tooling represents costs incurred by the Company in the
development of new tooling used in the manufacture of the Company's products
over the amount of such costs billed to the Company's customers. The Company
receives specific purchase orders for this tooling and is reimbursed by its
customers. Costs incurred are deferred until reimbursed by the customer.

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are stated at cost. For financial reporting
purposes, depreciation and amortization are provided using the straight-line
method over the following estimated useful lives:

<TABLE>
<S> <C>
10 to 40
Buildings and improvements................................... years
Machinery and equipment...................................... 5 to 17 years
</TABLE>

Accelerated depreciation methods are used for tax reporting purposes.

Interest of $0.7 million, $0.4 million and $1.7 million was capitalized to
fixed assets under construction during 1994, 1995 and 1996.

Maintenance and repairs are charged to expense as incurred. Major
improvements which extend the useful life of the related item are capitalized
and depreciated. The cost and accumulated depreciation of property, plant and
equipment retired or otherwise disposed of are removed from the related
accounts, and any residual values are charged or credited to income.

CAPITALIZED SOFTWARE COSTS:

Incremental direct costs associated with the customization and
implementation of purchased software are expensed until the Company is
reasonably certain that the specific new system (or substantial revision) will
be completed and will fulfill its intended use. Such costs are then capitalized
and amortized over their estimated useful lives--generally 3 to 10 years.
Training and nonincremental costs incurred in these activities are expensed as
incurred. Unamortized computer software costs were $6.9 million and $16.0
million as of December 31, 1995 and 1996. Amortization of these costs which was
charged to expense amounted to $1.6 million, $0.6 million and $0.7 million
during 1994, 1995 and 1996.

F-26
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
ACCRUED COMPENSATION COSTS:

Accrued compensation costs consisted of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
<S> <C> <C>
Payroll................................................................. $ 16,572 $ 17,982
Workers' compensation................................................... 5,904 5,980
Other................................................................... 2,661 3,374
--------- ---------
$ 25,137 $ 27,336
--------- ---------
--------- ---------
</TABLE>

REVENUE RECOGNITION:

The Company recognizes revenue upon shipment of product to the customer.

FOREIGN CURRENCY TRANSLATION:

For all subsidiaries outside the United States, the Company uses the local
currency as the functional currency. For these operations, assets and
liabilities are translated to U.S. dollars at year-end exchange rates and
weighted average exchange rates are used for revenues and expenses. The
resulting translation adjustments are reflected as a change in the Parent's
investment in the Company. Gains and losses from foreign currency transactions
are included in results of operations.

DERIVATIVES:

As a result of having various foreign operations, the Parent and Company are
exposed to the effect of foreign currency rate fluctuations on the U.S. dollar
value of their foreign operations. Further, the Parent and Company conduct
business in various foreign currencies. To minimize the effect of fluctuating
foreign currencies on its operating results, the Parent has historically entered
into foreign currency forward contracts. The contracts were used to hedge known
foreign currency transactions for both the Parent and the Company on a
continuing basis for periods consistent with the Parent's exposures. The effect
of such transactions as they related to the Company was not material.

INCOME TAXES:

The accompanying financial statements reflect income taxes accounted for
under the liability method, whereby deferred income taxes are recognized at
currently enacted income tax rates to reflect the tax effect of temporary
differences between the financial reporting and tax bases of certain assets and
liabilities.

CHARGES FROM A.O. SMITH:

The Parent has historically provided various services to APC and its other
operating units, including income tax, internal audit, benefits, corporate
technology, legal, strategic and treasury related services. Specific
determination of the costs associated with these services that relate directly
to the Company is not practicable; accordingly, the amounts presented in the
accompanying financial statements related to these

F-27
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
services reflect estimates, which management believes were reasonable and
appropriate in the circumstances. Management does not believe that such
estimates differ materially from actual amounts had it been practicable to
specifically identify such actual amounts. The estimated amount of corporate
expenses included in the accompanying combined statements of revenues and
expenses for the years ended December 31, 1994, 1995 and 1996 was $6 million,
$6.5 million and $5 million.

In addition to the above expense reimbursement charges, the accompanying
financial statements reflect charges for the Company's proportionate share of
the Parent's interest expense, allocated based on the relationship of the
Company's net assets to the Parent's total consolidated net assets.

NEW ACCOUNTING PRONOUNCEMENT:

During 1996, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." This statement provides
guidance for determining whether the value of certain long-lived assets,
identifiable intangibles and goodwill has been impaired. The adoption of this
statement had no impact on the Company's financial position or results of
operations.

USE OF ESTIMATES:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Such estimates relate primarily to the carrying amounts of
inventories and customer tooling balances and to the determination of charges
for services provided by the Parent. The ultimate results could differ from
those estimates.

3. MAJOR CUSTOMERS:

The Company sells its products directly to automobile manufacturers.
Following is a summary of customers that accounted for a significant portion of
the Company's revenues:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1994 1995 1996
<S> <C> <C> <C>
Ford................................................................... 45% 48% 46%
Chrysler............................................................... 25% 21% 20%
General Motors......................................................... 19% 19% 23%
</TABLE>

Receivables from these customers represented 68% and 76% of net accounts
receivable at December 31, 1995 and 1996.

4. SALES TO METALSA:

APC sells certain automotive frame components to Metalsa S.A. de C.V., a
Mexican joint venture in which the Parent is an investor. Sales were $11.0
million in 1994, $11.6 million in 1995 and $15.7 million in

F-28
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

4. SALES TO METALSA: (CONTINUED)
1996. Receivables related to the transaction activity were $.8 million, and $1.0
million as of December 31, 1995 and 1996. Such transactions were priced to
approximate fair market value.

5. INVESTMENT IN JOINT VENTURE:

In 1995, APC entered into a joint venture to produce certain of its parts in
China. This investment, equal to 60% of the joint venture equity, is accounted
for using the equity method of accounting as a result of the Company's voting
rights and general business restrictions within China. At December 31, 1995 and
1996, the carrying amount of the investment was $3.8 million and $20.6 million
and is included in other assets in the accompanying combined statements of net
assets to be acquired. The carrying amounts of the investment have not exceeded
the Company's equity in the underlying net assets. No income or distributions
were recognized or paid out by the joint venture in 1995 or 1996. Facility
operations are scheduled to begin in early 1997.

6. INCOME TAXES:

The Company's results of operations have been historically included in the
consolidated federal income tax returns of A.O. Smith. As a result, all tax
payments were made by A.O. Smith. The provisions for income taxes in the
accompanying combined statements of revenues and expenses for the years ended
December 31, 1994, 1995 and 1996 were computed as if the Company had filed
separate tax returns.

The income tax provision consisted of the following (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
<S> <C> <C> <C>
Currently payable............................................ $ 25,300 $ 17,500 $ 12,100
Deferred income tax provision (benefit)...................... (900) 3,900 7,900
--------- --------- ---------
$ 24,400 $ 21,400 $ 20,000
--------- --------- ---------
--------- --------- ---------
</TABLE>

The deferred income tax provision (benefit) consisted of the following (in
thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
<S> <C> <C> <C>
Depreciation lives and methods............................... $ 2,300 $ 2,300 $ 8,000
Reserves and accruals not currently deductible............... (3,300) 1,100 (400)
Other, net................................................... 100 500 300
--------- --------- ---------
Deferred income tax provision (benefit)...................... $ (900) $ 3,900 $ 7,900
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-29
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

6. INCOME TAXES: (CONTINUED)
A reconciliation of income taxes computed at the statutory rate to the
reported income tax provision is as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
<S> <C> <C> <C>
Taxes at federal statutory rates............................. $ 21,100 $ 18,500 $ 17,300
State income taxes, net of federal benefit................... 3,100 2,700 2,500
Effect of permanent differences.............................. 200 200 200
--------- --------- ---------
Provision for income taxes................................... $ 24,400 $ 21,400 $ 20,000
--------- --------- ---------
--------- --------- ---------
</TABLE>

A summary of the net deferred income tax benefit and liability is as follows
(in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1996
<S> <C> <C>
Reserves and accruals not currently deductible........................ $ 7,300 $ 7,200
Other................................................................. 300 400
---------- ----------
Net current deferred tax benefit...................................... $ 7,600 $ 7,600
---------- ----------
---------- ----------
Depreciation lives and methods........................................ $ 51,100 $ 59,400
Reserves and accruals not currently deductible........................ (23,700) (24,200)
Other................................................................. 400 500
---------- ----------
Net long-term deferred tax liability.................................. $ 27,800 $ 35,700
---------- ----------
---------- ----------
</TABLE>

7. COMMITMENTS AND CONTINGENCIES:

RETIREMENT AND BENEFIT PLANS:

Employees of the Company may be eligible to participate in a variety of
retirement and benefit plans that are sponsored by the Company and the Parent.
Participation in these plans is subject to certain eligibility conditions.

The Parent sponsors a qualified noncontributory defined benefit plan which
was established on December 31, 1995 through the merger of its various defined
benefit plans in the United States into one plan. Benefits for salaried
employees are based on the employee's years of service and compensation.
Benefits for hourly employees are generally based on years of service. The
Parent's policy is to contribute amounts which are actuarially determined to
provide sufficient assets to meet future benefit payment requirements consistent
with the funding requirements of federal law and regulations. Plan assets
consist primarily of marketable equities and debt securities. The Company
recognized pension expense of $3.0 million, $5.4 million and $3.3 million during
1994, 1995 and 1996 related to its contributions to this plan. As of December
31, 1996, net plan assets exceeded the projected benefit obligation under the
plan.

The Parent sponsors several defined contribution employee benefit plans for
hourly and salaried personnel in the United States and Canada. Under the plans,
the Company matches employee contributions based upon formulas established in
the plans. Company contributions under these plans for the benefit of Company
employees were $1.4 million during each of 1994, 1995 and 1996.

F-30
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

7. COMMITMENTS AND CONTINGENCIES: (CONTINUED)
POSTRETIREMENT HEALTHCARE:

The Company participates in a defined benefit postretirement plan sponsored
by the Parent which provides medical and life insurance benefits to certain
hourly and salaried employees from retirement to age 65. Salaried employees
retiring after January 1, 1995, are covered by an unfunded defined contribution
plan with benefits based on years of service. Certain hourly employees retiring
after January 1, 1996, will be subject to a maximum annual benefit limit.
Salaried employees hired after December 31, 1993, are not eligible for
postretirement medical benefits.

Net periodic postretirement benefit costs associated with those employees of
the Company that participate in this plan included the following components for
the years ended December 31 (in thousands):

<TABLE>
<CAPTION>
1994 1995 1996
<S> <C> <C> <C>
Service cost--benefits attributed to employee service during the
year........................................................... $ 1,354 $ 1,067 $ 1,168
Interest cost on accumulated postretirement benefit obligation... 5,925 5,613 5,758
Amortization of prior service cost............................... -- -- 156
Amortization of unrecognized net (gain) loss..................... 294 (28) 546
--------- --------- ---------
$ 7,573 $ 6,652 $ 7,628
--------- --------- ---------
--------- --------- ---------
</TABLE>

The following table summarizes the components of the postretirement benefit
obligation related to the employees of the Company that participate in this plan
(in thousands):

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Accumulated postretirement benefit obligation (APBO):
Retirees............................................................ $ 33,416 $ 27,389
Fully eligible active plan participants............................. 15,778 19,870
Other active plan participants...................................... 26,857 30,692
---------- ----------
76,051 77,951
Unrecognized prior service cost....................................... (1,100) (946)
Unrecognized net loss................................................. (11,385) (11,328)
---------- ----------
Accrued postretirement benefit obligation............................. $ 63,566 $ 65,677
---------- ----------
---------- ----------
</TABLE>

The assumed healthcare cost trend rate used in measuring the APBO is 6
percent. The weighted average discount rate used in determining the APBO was 7.5
and 8.0 percent at December 31, 1995 and 1996. If the healthcare cost trend rate
were increased by 1 percent, the APBO at December 31, 1996 would increase by
$1.8 million and net periodic postretirement benefit cost for 1996 would
increase $.2 million.

ENVIRONMENTAL AND LEGAL MATTERS:

Due to the nature of its business, the Company has, from time to time, been
exposed to potential liabilities to clean up environmental contaminants. In
addition, the Company is periodically involved in

F-31
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

7. COMMITMENTS AND CONTINGENCIES: (CONTINUED)
legal proceedings during the ordinary course of business. In the opinion of
management, such matters are not expected to have a material impact on the
Company's future operating results or financial position.

OPERATING LEASE COMMITMENTS:

The Company leases manufacturing facilities and equipment under operating
lease agreements which require it to pay maintenance, insurance, taxes and other
expenses in addition to rentals. Future annual rental commitments at December
31, 1996 under these operating leases are as follows (in thousands):

<TABLE>
<CAPTION>
1997............................................................... $ 22,268
<S> <C>
1998............................................................... 21,283
1999............................................................... 19,229
2000............................................................... 9,003
2001............................................................... 5,206
Thereafter......................................................... 17,856
---------
$ 94,845
---------
---------
</TABLE>

Rent expense, including payments under operating lease commitments, totaled
$21.3 million, $21.2 million and $24.1 million during 1994, 1995 and 1996.

8. ACQUISITION BY TOWER AUTOMOTIVE, INC.:

On January 27, 1997, a wholly owned subsidiary of R.J. Tower agreed to
acquire and assume substantially all of the assets and liabilities of the
Company. Terms of the agreement provided for the payment of cash consideration
of approximately $625 million, subject to certain adjustments. The Acquisition
is expected to be completed during the second quarter of 1997. Subsequent to the
Acquisition, the operations of the Company will be continued by R.J. Tower on a
basis substantially consistent with that which existed prior to the Acquisition.
The Acquisition will be accounted for as a purchase and, accordingly, the
Company's assets and liabilities will be recorded at fair value as of the
acquisition date.

F-32
<PAGE>
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE SELLING STOCKHOLDERS OR THE UNDERWRITERS. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 10
The Company.................................... 13
APC Acquisition Financing...................... 13
Use of Proceeds................................ 14
Market Price of Common Stock................... 15
Dividend Policy................................ 15
Capitalization................................. 16
Unaudited Pro Forma Financial Statements....... 17
Selected Consolidated Financial Data of the
Company...................................... 22
Selected Combined Financial Data of APC........ 24
Management's Discussion and Analysis of Results
of Operations and Financial Condition........ 25
Business....................................... 31
Management..................................... 43
Principal Stockholders......................... 45
Selling Stockholders........................... 47
Description of New Credit Agreement............ 48
Underwriting................................... 49
Legal Matters.................................. 50
Experts........................................ 50
Available Information.......................... 50
Incorporation of Certain Documents by
Reference.................................... 51
Index to Financial Statements.................. F-1
</TABLE>

10,090,000 SHARES

[LOGO]

TOWER AUTOMOTIVE, INC.

COMMON STOCK

-----------------

PROSPECTUS

-----------------

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

PAINEWEBBER INCORPORATED

ROBERT W. BAIRD & CO.
INCORPORATED

MORGAN STANLEY & CO.
INCORPORATED

PIPER JAFFRAY INC.

FEBRUARY , 1997

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the expenses of the Registrant in connection
with the issuance and distribution of the securities being registered, other
than underwriting discounts and commissions. All such amounts are estimates,
other than the filing fees payable to the Commission, the National Association
of Securities Dealers, Inc. ("NASD") and the New York Stock Exchange.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............... $ 150,318
NASD filing fee................................................... 30,500
New York Stock Exchange listing fee............................... *
Printing and mailing expenses..................................... *
Legal fees and expenses........................................... *
Blue sky fees and expenses........................................ *
Accounting fees and expenses...................................... *
Miscellaneous..................................................... *
---------
Total......................................................... $ *
---------
---------
</TABLE>

- ------------------------

* To be completed by amendment.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 102(b)(7) of the General Corporation Law of the State of Delaware
permits a Delaware corporation to limit the personal liability of its directors
in accordance with the provisions set forth therein. The Restated Certificate of
Incorporation of the Registrant provides that the personal liability of its
directors shall be limited to the fullest extent permitted by applicable law.

Section 145 of the General Corporation Law of the State of Delaware contains
provisions permitting corporations organized thereunder to indemnify directors,
officers, employees or agents against expenses, judgments and fines reasonably
incurred and against certain other liabilities in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person was or is a director, officer, employee or agent of the corporation. The
Restated Certificate of Incorporation of the Registrant provide for
indemnification of its directors and officers to the fullest extent permitted by
applicable law.

The form of Underwriting Agreement attached hereto as Exhibit 1.1, which
provides for, among other things, the Registrant's sale to the Underwriters of
the securities being registered herein, will obligate the Underwriters to
indemnify the registrant and the Registrant's officers and directors against
certain liabilities under the Securities Act of 1933, as amended (the
"Securities Act").

EXHIBITS INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<C> <S>
*1.1 Form of Underwriting Agreement.

*2.1 Asset Purchase Agreement by and among A.O. Smith Corporation, A.O. Smith Enterprises Ltd., Tower
Automotive Acquisition, Inc., Tower Automotive, Inc. and R.J. Tower Corporation.
</TABLE>

II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<C> <S>
4.1 Specimen Certificate for shares of Common Stock, incorporated by reference to Exhibit 4.1 of the
Company's Form S-1 Registration Statement (Registration No. 33-80320) (the "Form S-1").

4.2 Amended and Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit
3.1 of the Form S-1.

4.3 Amended and Restated By-Laws of the Company, incorporated by reference to Exhibit 3.2 of the Form S-1.

*4.4 Letter agreement, dated December 10, 1996, between Bank of America National Savings and Trust
Association and the Company, relating to the New Credit Agreement.

*5.1 Opinion of Kirkland & Ellis regarding legality of securities being registered.

23.1 Consent of Arthur Andersen LLP.

*23.2 Consent of Kirkland & Ellis - included in Exhibit 5.1.

24.1 Powers of Attorney included in Part II of Registration Statement.

27.1 Financial Data Schedule of the Company.

27.2 Financial Data Schedule of APC.
</TABLE>

- ------------------------

* To be filed by amendment.

ITEM 17. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be the initial bona fide offering thereof.

(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(1) For purposes of determining any liability under the Securities act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be a part of this
Registration Statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.

II-2
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minneapolis, Minnesota, as of February 18, 1997.

TOWER AUTOMOTIVE, INC.

By: /s/ S. A. JOHNSON
-----------------------------------------
S. A. Johnson
CHAIRMAN OF THE BOARD

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Scott D. Rued and S.A. Johnson and each of them,
as true and lawful attorneys-in-fact and agents with full power of substitution
and resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including pre-effective and
post-effective amendments) to this Registration Statement (and any registration
statement filed pursuant to Rule 462(b) under the Securities Act), and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and as of the dates indicated.

SIGNATURE TITLE DATE

/s/ S. A. JOHNSON
- ------------------------ Chairman of the Board and February 18, 1997
S. A. Johnson Director

/s/ ADRIAN VANDER
STARRE
- ------------------------ Director February 18, 1997
Adrian Vander Starre

President, Chief Executive
/s/ DUGALD K. CAMPBELL Officer and
- ------------------------ Director (Principal February 18, 1997
Dugald K. Campbell Executive Officer)

Vice President and Chief
/s/ ANTHONY A. BARONE Financial Officer
- ------------------------ (Principal Financial and February 18, 1997
Anthony A. Barone Accounting Officer)

/s/ JAMES R. LOZELLE
- ------------------------ Director February 18, 1997
James R. Lozelle

/s/ SCOTT D. RUED
- ------------------------ Director February 18, 1997
Scott D. Rued

II-3
<PAGE>

SIGNATURE TITLE DATE

/s/ W. H. CLEMENT
- ------------------------ Director February 18, 1997
W. H. Clement

/s/ ERIC J. ROSEN
- ------------------------ Director February 18, 1997
Eric J. Rosen

/s/ MATTHEW O. DIGGS,
JR.
- ------------------------ Director February 18, 1997
Matthew O. Diggs, Jr.

/s/ F. J. LOUGHREY
- ------------------------ Director February 18, 1997
F. J. Loughrey

/s/ KIM B. CLARK
- ------------------------ Director February 18, 1997
Kim B. Clark

II-4

<PAGE>

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our firm) included in or made a part of
this registration statement.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota,
February 18, 1997

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TOWER
AUTOMOTIVE, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF AND
FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 39,596
<SECURITIES> 0
<RECEIVABLES> 61,073
<ALLOWANCES> 0
<INVENTORY> 21,864
<CURRENT-ASSETS> 136,966
<PP&E> 176,812
<DEPRECIATION> (20,564)
<TOTAL-ASSETS> 398,607
<CURRENT-LIABILITIES> 55,431
<BONDS> 113,460
0
0
<COMMON> 143
<OTHER-SE> 181,734
<TOTAL-LIABILITY-AND-EQUITY> 398,607
<SALES> 399,925
<TOTAL-REVENUES> 399,925
<CGS> 338,290
<TOTAL-COSTS> 338,290
<OTHER-EXPENSES> 22,195
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,103
<INCOME-PRETAX> 34,337
<INCOME-TAX> 13,700
<INCOME-CONTINUING> 20,637
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,637
<EPS-PRIMARY> 1.55
<EPS-DILUTED> 1.55

</TABLE>

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
AUTOMOTIVE PRODUCTS COMPANY (A DIVISION OF A.O. SMITH CORPORATION)
COMBINED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 70,027
<ALLOWANCES> (1,200)
<INVENTORY> 32,883
<CURRENT-ASSETS> 171,142
<PP&E> 768,489
<DEPRECIATION> (360,940)
<TOTAL-ASSETS> 601,311
<CURRENT-LIABILITIES> 107,320
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 392,614
<TOTAL-LIABILITY-AND-EQUITY> 601,311
<SALES> 862,977
<TOTAL-REVENUES> 862,977
<CGS> 770,095
<TOTAL-COSTS> 770,095
<OTHER-EXPENSES> 37,233
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,829
<INCOME-PRETAX> 48,820
<INCOME-TAX> 20,000
<INCOME-CONTINUING> 28,820
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,820
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>