TOWER AUTOMOTIVE INC, S-3/A, 1997-04-10

TOWER AUTOMOTIVE INC
S-3/A, 1997-04-10
METAL FORGINGS & STAMPINGS

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 10, 1997

REGISTRATION NO. 333-21943
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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

AMENDMENT NO. 2
TO
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: / /
--------------------------

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.

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<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 APRIL 10, 1997

PROSPECTUS
, 1997

10,090,000 SHARES

[LOGO]

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 New York Stock Exchange ("NYSE")
under the symbol "TWR." On April 4, 1997, the last reported sale price of the
Common Stock on the NYSE was $38.25 per share. See "Market Price of Common
Stock."

On January 27, 1997, the Company agreed to acquire substantially all of the
assets of Automotive Products Company ("APC"), a division of A.O. Smith
Corporation. The Company expects to complete the acquisition of APC by the end
of April 1997. Certain of the information set forth in this Prospectus assumes
that the acquisition of APC will be completed upon the terms set forth in the
purchase agreement. If the acquisition of APC 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 acquisition of APC is not completed, the information set forth
in this Prospectus giving effect to such acquisition would not be relevant. See
"Risk Factors-- Risks Associated with the Failure to Complete the APC
Acquisition."

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>
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<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)............... $ $ $ $
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</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 $1,300,000 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

MORGAN STANLEY & CO.
INCORPORATED

ROBERT W. BAIRD & CO.
INCORPORATED

PIPER JAFFRAY INC.
<PAGE>

The following diagrams illustrate the products produced by the Company and APC.
If the acquisition of APC is not completed, the information relating to APC's
products would not be relevant. See "Risk Factors--Risks Associated with the
Failure to Complete the APC Acquisition."

[Illustrations depicting the principal products of the Company and APC]

/ / Currently produced by the Company.

/ / Currently produced by APC.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING AND
MAY BID FOR AND PURCHASE SHARES OF COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<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 one of the largest independent
suppliers of structural components and assemblies to the North American
automotive market (based on net sales).

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 its 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 expects to continue to benefit from these trends within the
structural segment of the automotive supply industry.

3
<PAGE>
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 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 APC
Acquisition will enable the Company to produce a larger portion of a vehicle,
which the Company believes 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 light truck/sport utility 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.

4
<PAGE>
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 its 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. Currently, the Company believes that such a change
has not occurred and that it is unlikely that such a change will occur 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--Risks Associated with the Failure to
Complete 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......................... 22,842,600 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>

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(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) 1,017,677 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 457,500 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) The Company's Common Stock commenced trading on the NYSE on February 19,
1997. Prior thereto, the Common Stock was 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 risks relating to: (i) the failure of the Company to complete the
APC Acquisition; (ii) the degree to which the Company will be leveraged
following the APC Acquisition; (iii) the Company's reliance on major customers
and selected models; (iv) the cyclicality and seasonality of the automotive
market; (v) the failure to realize the benefits of the APC Acquisition; (vi)
obtaining new business on new and redesigned models; and (vii) the Company's
ability to continue to implement its acquisition strategy. See "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 61,635 180,758
Operating income....................................... 14,302 21,920 39,440 112,878
Net income............................................. 7,361 12,071 20,637 51,306
Net income applicable to common stockholders........... 7,476 12,247 20,765 51,434
Net income per common and common equivalent share(3)... $ 0.86 $ 1.05 $ 1.55 $ 2.20
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
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(4).............................................. 18,440 28,469 52,194 165,776
Cash provided by (used in):
Operating activities................................. (10,375) 13,905 30,049 NA
Investing activities................................. (73,266) (34,054) (88,924) NA
Financing activities................................. 82,848 21,051 97,514 NA
North American content per vehicle(5).................. 10.83 14.92 26.74 77.49
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
--------------------------
PRO FORMA
ACTUAL AS ADJUSTED(6)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital.................................................................... $ 81,535 $ 115,955
Total assets....................................................................... 398,607 1,200,877
Total debt......................................................................... 114,182 417,736
Stockholders' investment........................................................... 181,877 489,627
</TABLE>

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(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) 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.
See "Dividend Policy."

(FOOTNOTES CONTINUED ON FOLLOWING PAGE)

7
<PAGE>
(4) "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") and the Company's calculation thereof may not be
comparable to that reported by other companies. The Company believes that it
is widely accepted that EBITDA provides useful information regarding a
company's ability to service and/or incur indebtedness. This belief is based
on the Company's negotiations with its lenders who have indicated that the
amount of indebtedness the Company will be permitted to incur will be based,
in part, on the Company's EBITDA. EBITDA does not take into account the
Company's working capital requirements, 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 a reconciliation
of the Company's operating income, as reported, to EBITDA for the periods
indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
PRO FORMA
AS ADJUSTED
1994 1995 1996 1996
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Operating income.................................................. $ 14,302 $ 21,920 $ 39,440 $ 112,878
Depreciation and amortization..................................... 4,138 6,549 12,754 52,898
--------- --------- --------- -----------
EBITDA............................................................ $ 18,440 $ 28,469 $ 52,194 $ 165,776
--------- --------- --------- -----------
--------- --------- --------- -----------
</TABLE>

(5) "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).

(6) 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."

8
<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............................................................... 98,952 90,974 91,682
Operating income........................................................... 64,931 53,541 54,449
Income before provision for income taxes................................... 60,880 48,184 47,620

OTHER DATA:
Capital expenditures, net(1)............................................... $ 59,023 $ 78,908 $ 151,534
EBITDA(2).................................................................. 99,031 95,362 105,217
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
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......................................................................... 383,314
</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 and the Company's
calculation thereof may not be comparable to that reported by other
companies. The Company believes that it is widely accepted that EBITDA
provides useful information regarding a company's ability to service and/or
incur indebtedness. This belief is based on the Company's negotiations with
its lenders who have indicated that the amount of indebtedness the Company
will be permitted to incur will be based, in part, on the Company's EBITDA.
EBITDA does not take into account APC's working capital requirements, 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 a reconciliation of APC's operating income, as
reported, to EBITDA for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
(IN THOUSANDS)
<S> <C> <C> <C>
Operating income.............................................................. $ 64,931 $ 53,541 $ 54,449
Depreciation and amortization................................................. 34,100 41,821 50,768
--------- --------- ---------
EBITDA........................................................................ $ 99,031 $ 95,362 $ 105,217
--------- --------- ---------
--------- --------- ---------
</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.

9
<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.

RISKS ASSOCIATED WITH THE FAILURE TO COMPLETE THE APC ACQUISITION

Prior to the Offering, there were 14,342,600 shares of Common Stock
outstanding. Upon consummation of the Offering, there will be 22,842,600 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 as adjusted
basis would have been $2.20 per share. If the APC Acquisition is not completed,
the Company's EPS for 1996 on a pro forma as adjusted 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. 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 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.

10
<PAGE>
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 $417.0
million, or 46.0% 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. 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. There can
be no assurance that the Company will be able 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."

RISKS RELATED TO 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

There can be no assurance that the anticipated benefits of the APC
Acquisition will be realized or that the combination of the Company and APC will
be successful. In addition, 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 anticipated cost savings from such integration 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.

RISKS ASSOCIATED WITH OBTAINING BUSINESS FOR 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. There can be no
assurance that the Company and APC will be successful in obtaining significant
new business on

11
<PAGE>
new models and in supplying additional parts for existing models as they are
redesigned by their customers. 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 does not currently have
any pending acquisitions that are probable other than as described herein. See
"Business--Strategy."

RISKS FROM 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. There can be no assurance that the Company will be able to
maintain its current competitive position and continue to supply its products to
OEMs. See "Business-- Competition."

ANTI-TAKEOVER PROVISIONS COULD PREVENT OR DELAY A CHANGE IN CONTROL OR ADVERSELY
IMPACT STOCK PRICE

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 deterring hostile takeovers or delaying, deterring or preventing a
change in control of the Company, including transactions in which stockholders
might otherwise receive a premium for their shares over current market prices.
In addition, the issuance of preferred stock to delay, deter or prevent a change
of control could have an adverse effect on the market price of the Common Stock.

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 a six year revolving credit facility of up to $750 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 in the form of a term loan. This 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."

13
<PAGE>
The following table sets forth the anticipated sources and uses of funds for
the APC Acquisition (dollars in thousands):

<TABLE>
<S> <C>
SOURCES:
Revolving Credit Facility....................................... $ 368,554
Proceeds from the Offering(1)................................... 310,750
Cash on hand.................................................... 39,596
---------
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 $38.25 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 $38.25 per share and after deducting the underwriting
discounts and commissions and estimated offering expenses payable by the
Company) are estimated to be $310.8 million ($366.3 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. The
Company expects to use borrowings under the New Credit Agreement of $368.6
million, together with cash on hand of $39.6 million, to pay the remaining
portion of the purchase price of the APC Acquisition.

In the event that the APC Acquisition is not consummated, the Company
reserves the right 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-- Risks Associated with the Failure to Complete the APC
Acquisition."

The Company is continually evaluating possible acquisitions and engages in
discussions with acquisition candidates from time to time. The Company does not
currently have any pending acquisitions that are probable other than as
described herein.

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 NYSE under the symbol "TWR." The
Common Stock commenced trading on the Nasdaq National Market on August 12, 1994
under the symbol "TWER." The Common Stock commenced trading on the NYSE on
February 19, 1997. 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 or the NYSE.

<TABLE>
<CAPTION>
HIGH LOW
<S> <C> <C>
1995
- -----------------------------------------------------------------------------
First Quarter................................................................ $ 105/8 $ 7 1/2
Second Quarter............................................................... 101/2 8 1/4
Third Quarter................................................................ 141/2 10 3/8
Fourth Quarter............................................................... 171/2 13 1/8

1996
- -----------------------------------------------------------------------------
First Quarter................................................................ $ 161/8 $ 14 1/8
Second Quarter............................................................... 251/4 16
Third Quarter................................................................ 27 23 3/4
Fourth Quarter............................................................... 321/8 24

1997
- -----------------------------------------------------------------------------
First Quarter................................................................ $ 451/16 $ 29 3/4
</TABLE>

The reported last sale price of the Common Stock on the NYSE 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 $ --
--------- -----------
--------- -----------
Long-term debt:
Existing Credit Agreement............................................................... $ -- $ --
New Credit Agreement:
Revolving Credit Facility............................................................. -- 368,554
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.................................................................. 113,460 417,014
--------- -----------
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.............................................................. 136,759 447,424
Warrants(3)............................................................................. 2,000 2,000
Retained earnings....................................................................... 43,150 40,150
Common stock subscriptions receivable................................................... (175) (175)
--------- -----------
Total stockholders' investment........................................................ 181,877 489,627
--------- -----------
Total capitalization.................................................................. $ 295,337 $ 906,641
--------- -----------
--------- -----------
</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) 48,705 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. See "The
Company" and "Use of Proceeds" on pages 13 and 14, respectively, for a more
detailed description of the transactions included in the Unaudited Pro Forma
Financial Statements.

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 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.
Currently, the Company believes that such a change has not occurred and that it
is unlikely that such a change will occur prior to the closing date. 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
Common Stock would be significantly diluted. The Company's EPS for 1996 on a pro
forma as adjusted basis would have been $2.20 per share. If the APC Acquisition
is not completed, the Company's EPS for 1996 on a pro forma as adjusted basis
would have been $1.17 per share. See "Risk Factors--Risks Associated with the
Failure to Complete the APC Acquisition." The Company is required to pay A.O.
Smith a fee of $15.0 million in the event that the APC Acquisition is not
completed. The Company currently believes that the APC Acquisition will be
completed. As a result, the Company has not reflected this payment in the
accompanying Unaudited Pro Forma Financial Statements.

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.

Each of the acquisitions referred to in these Unaudited Pro Forma Financial
Statements have been or will be accounted for using the purchase method of
accounting and, accordingly, the assets acquired and liabilities assumed have
been or will be recorded at their fair values as of the dates of their
respective acquisitions. These amounts have been recorded based upon preliminary
estimates as of the dates of the acquisitions. The Company does not believe that
any changes to these estimates that may occur will have a material impact on the
pro forma financial information included herein.

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 64,224 771,295 (31,462)(5) 1,142,347
----------- --------- ---------- --------------- ------------
Gross profit.................................. 61,635 9,579 91,682 17,862 180,758
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 54,449 13,497 112,878
Interest expense, net......................... 5,103 37 6,829 15,400(7) 27,369
----------- --------- ---------- --------------- ------------
Income before provision for income taxes...... 34,337 5,455 47,620 (1,903) 85,509
Provision for income taxes.................... 13,700 1,640 19,500 (637)(8) 34,203
----------- --------- ---------- --------------- ------------
Income before extraordinary item.............. 20,637 3,815 28,120 (1,266) 51,306
Extraordinary loss on early extinguishment of
debt, net of income taxes................... -- -- -- (3,000)(9) (3,000)
----------- --------- ---------- --------------- ------------
Net income.................................. $ 20,637 $ 3,815 $ 28,120 $ (4,266) $ 48,306
----------- --------- ---------- --------------- ------------
----------- --------- ---------- --------------- ------------
Income applicable to common stockholders:
Before extraordinary item................. $ 20,765 $ 51,434
----------- ------------
----------- ------------
Net income................................ $ 20,765 $ 48,434
----------- ------------
----------- ------------
Income per common and common equivalent
share:
Before extraordinary item................. $ 1.55 $ 2.20(11)
----------- ------------
----------- ------------
Net income................................ $ 1.55 $ 2.07
----------- ------------
----------- ------------
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 ($2,314) and APC ($40,069), net
of the reduction in interest expense which results from the application of
the proceeds from the 1996 Offering ($993) and the Offering ($25,991).
Adjustments to interest expense have been calculated based on an assumed
weighted average borrowing rate of 6.75% during the pro forma period. If the
assumed interest rate were to change by 1/8 of 1%, interest expense would
change by approximately $460 and net income would change by approximately
$275.

(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.

(11) The following is a reconciliation between (i) pro forma net income per
common and common equivalent share, excluding the effect of the Offering and
the APC Acquisition (See "Notes to Consolidated Financial Statements" on
page F-10), (ii) pro forma EPS as adjusted, excluding the effect of the APC
Acquisition, and (iii) pro forma EPS as adjusted:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
SHARES
AMOUNT EPS OUTSTANDING
--------- --------- -------------
<S> <C> <C> <C>
Pro forma income applicable to common stockholders, excluding the effect
of the Offering and the APC Acquisition................................. $ 23,982 $ 1.61 14,932
---------
---------
Elimination of interest expense as a result of the application of the
proceeds of the Offering, net of tax.................................... 3,500 8,500
--------- ------
Pro forma income applicable to common stockholders, excluding the effect
of the APC Acquisition.................................................. 27,482 $ 1.17 23,432
---------
---------
Net income of APC......................................................... 28,120
Pro forma adjustments associated with the APC Acquisition................. 7,778
Incremental interest expense arising from the APC Acquisition, net of
tax..................................................................... (24,041)
Additional elimination of interest expense as a result of the application
of the proceeds of the Offering, net of tax............................. 12,095
--------- ------
Pro forma income applicable to common stockholders........................ $ 51,434 $ 2.20 23,432
--------- --------- ------
--------- --------- ------
</TABLE>

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(1) ADJUSTED
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $ 39,596 $ -- $ (39,596)(6) $ --
Accounts receivable...................................... 61,073 68,827 -- 129,900
Inventories.............................................. 21,864 32,883 15,763(2) 70,510
Prepaid tooling and other................................ 14,433 69,432 (7,600)(3) 76,265
---------- ---------- -------------- ------------
Total current assets................................... 136,966 171,142 (31,433) 276,675
Property, plant and equipment, net......................... 156,248 407,549 48,197(4) 611,994
Restricted cash............................................ 10,833 -- -- 10,833
Goodwill and other intangible assets, net.................. 85,638 -- 185,326(5) 270,964
Other assets............................................... 8,922 22,620 (1,131)(6) 30,411
---------- ---------- -------------- ------------
$ 398,607 $ 601,311 $ 200,959 $ 1,200,877
---------- ---------- -------------- ------------
---------- ---------- -------------- ------------

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities:
Accounts payable......................................... $ 32,280 $ 69,485 $ -- $ 101,765
Accrued liabilities...................................... 22,429 37,835 (2,031)(6) 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 -- 303,554(6) 417,014

Other noncurrent liabilities............................... 47,839 110,677 (25,000)(7) 133,516
---------- ---------- -------------- ------------
Stockholders' investment:
Preferred stock.......................................... -- -- -- --
Common stock............................................. 143 -- 85(6) 228
Additional paid-in capital............................... 136,759 -- 310,665(6) 447,424
Warrants................................................. 2,000 -- -- 2,000
Retained earnings........................................ 43,150 -- (3,000)(6) 40,150
Parent company investment................................ -- 383,314 (383,314)(8) --
Subscriptions receivable................................. (175) -- -- (175)
---------- ---------- -------------- ------------
Total stockholders' investment......................... 181,877 383,314 (75,564) 489,627
---------- ---------- -------------- ------------
$ 398,607 $ 601,311 $ 200,959 $ 1,200,877
---------- ---------- -------------- ------------
---------- ---------- -------------- ------------
</TABLE>

See accompanying Notes to Unaudited Pro Forma Balance Sheet.

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

(1) The following table sets forth the components of the aggregate purchase
price of the APC Acquisition and the allocation of such purchase price:

<TABLE>
<S> <C>
APC purchase price........................................................ $ 625,000
Fees and expenses and estimated post-closing adjustments.................. 25,000
---------
Total purchase price to be allocated.................................... $ 650,000
---------
---------
Historical net book value of assets acquired.............................. $ 383,314
Elimination of LIFO reserve (Note 2)...................................... 15,763
Adjustment of property, plant and equipment to fair value (Note 4)........ 48,197
Elimination of historical deferred tax assets (Note 3).................... (7,600)
Elimination of historical deferred tax liability (Note 7)................. 29,500
Reserves established in connection with the APC Acquisition (Note 7)...... (4,500)
Excess purchase price over net assets acquired allocated to goodwill...... 185,326
---------
Total purchase price allocated.......................................... $ 650,000
---------
---------
</TABLE>

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

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

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

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

(6) 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. See "Description of New Credit
Agreement" for a detailed description of the terms of 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:
Revolving Credit Facility............................................... $ 368,554
Proceeds from the Offering.............................................. 310,750
Cash on hand............................................................ 39,596
---------
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>

(7) To write off historical deferred taxes of $29,500 and to record management's
preliminary estimate of reserves to be established in connection with the
APC Acquisition of $4,500 to exit a leased facility of APC incidental to the
relocation of the operations currently performed in that facility to sites
that are owned by the Company. Estimated costs to be incurred to exit the
leased facility consist primarily of lease abandonment costs. Such estimates
are subject to upward and downward adjustment depending on the actual time
required to complete and the outcome of major actions incidental to
relocating operations including the Company's ability, timing and cost to
break the underlying lease, abandon the facilities and the actual costs to
be incurred after operations cease associated with the closing of the
facility. The Company expects to complete the relocation and abandonment of
the facility by the end of calendar 1997. Future adjustments to management's
preliminary estimates will be recorded as an adjustment to goodwill in
future periods.

(8) To eliminate APC's historical parent company investment.

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."

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(4).. $ 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(5)................... 7,851 12,143 18,440 28,469 52,194
Cash provided by (used in):
Operating activities...... 4,682 9,241 (10,375) 13,905 30,049
Investing activities...... (22,344) (24,434) (73,266) (34,054) (88,924)
Financing activities...... 18,510 15,024 82,848 21,051 97,514
North American content per
vehicle(6)................ NA 6.23 10.83 14.92 26.74

PRO FORMA
AS ADJUSTED 1996

<S> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues.................... $1,323,105
Cost of sales............... 1,142,347
----------------
Gross profit.............. 180,758
Selling, general and
administrative expenses... 60,641
Amortization expense........ 7,239
----------------
Operating income.......... 112,878
Interest expense, net....... 27,369
Other income, net........... --
----------------
Income before provision
for income taxes........ 85,509
Provision for income
taxes..................... 34,203
----------------
Net income................ $ 51,306
----------------
----------------
Net income applicable to
common stockholders(4).. $ 51,434
----------------
----------------
Net income per common and
common equivalent
share................... $ 2.20
Weighted average common
and common equivalent
shares outstanding...... 23,432
OTHER DATA:
Capital expenditures, net... $ 167,787
EBITDA(5)................... 165,776
Cash provided by (used in):
Operating activities...... NA
Investing activities...... NA
Financing activities...... NA
North American content per
vehicle(6)................ 77.49
</TABLE>

22
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------------------
PRO FORMA
AS
BALANCE SHEET DATA (AT END ADJUSTED
OF PERIOD): 1993 1994 1995 1996 1996
Working capital................................................ $ 1,440 $ 33,145 $ 32,245 $ 81,535 $ 115,955
<S> <C> <C> <C> <C> <C> <C> <C>
Total assets................................................... 51,358 178,398 209,476 398,607 1,200,877
Total debt..................................................... 14,433 50,403 71,079 114,182 417,736
Stockholders' investment....................................... 10,823 73,139 85,585 181,877 489,627

<CAPTION>
BALANCE SHEET DATA (AT END
OF PERIOD):
Working capital................................................
<S> <C> <S> <C> <C> <C> <C> <C>
Total assets...................................................
Total debt.....................................................
Stockholders' investment.......................................
</TABLE>

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

(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) 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.
See "Dividend Policy."

(5) "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 and the Company's
calculation thereof may not be comparable to that reported by other
companies. The Company believes that it is widely accepted that EBITDA
provides useful information regarding a company's ability to service and/or
incur indebtedness. This belief is based on the Company's negotiations with
its lenders who have indicated that the amount of indebtedness the Company
will be permitted to incur will be based, in part, on the Company's EBITDA.
EBITDA does not take into account the Company's working capital
requirements, 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 a reconciliation of the Company's
operating income, as reported, to EBITDA for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
APRIL 15 --------------------------------------------------------------
THROUGH COMBINED PRO FORMA
DECEMBER 31, 1993 1993 1994 1995 1996 AS ADJUSTED 1996
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>

Operating income................ $ 6,004 $ 9,392 $ 14,302 $ 21,920 $ 39,440 $ 112,878
Depreciation and amortization... 1,847 2,751 4,138 6,549 12,754 52,898
------ ----------- --------- --------- --------- --------
EBITDA.......................... $ 7,851 $ 12,143 $ 18,440 $ 28,469 $ 52,194 $ 165,776
------ ----------- --------- --------- --------- --------
------ ----------- --------- --------- --------- --------
</TABLE>

(6) "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 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,
-------------------------------
1994 1995 1996
(IN THOUSANDS, EXCEPT PER
VEHICLE AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................................................................... $ 722,718 $ 845,305 $ 862,977
Cost of sales...................................................................... 623,766 754,331 771,295
--------- --------- ---------
Gross profit..................................................................... 98,952 90,974 91,682
Selling, general and administrative expenses....................................... 34,021 37,433 37,233
--------- --------- ---------
Operating income................................................................. 64,931 53,541 54,449
Interest expense................................................................... 4,051 5,357 6,829
--------- --------- ---------
Income before provision for income taxes......................................... $ 60,880 $ 48,184 $ 47,620
--------- --------- ---------
--------- --------- ---------

OTHER DATA:
Capital expenditures, net(1)....................................................... $ 59,023 $ 78,908 $ 151,534
EBITDA(2).......................................................................... 99,031 95,362 105,217
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
North American content per vehicle(3).............................................. 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........................................................................... 383,314
</TABLE>

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

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
(IN THOUSANDS)
<S> <C> <C> <C>
Operating income................................................... $ 64,931 $ 53,541 $ 54,449
Depreciation and amortization...................................... 34,100 41,821 50,768
--------- --------- ---------
EBITDA............................................................. $ 99,031 $ 95,362 $ 105,217
--------- --------- ---------
--------- --------- ---------
</TABLE>

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

THE COMPANY HAS INCLUDED INFORMATION IN THIS SECTION REGARDING THE
OPERATIONS OF APC AS A RESULT OF ITS BELIEF THAT THE APC ACQUISITION WILL BE
COMPLETED IN ACCORDANCE WITH THE TERMS SET FORTH HEREIN. IF THE APC ACQUISITION
IS NOT COMPLETED, THE INFORMATION SET FORTH IN THIS PROSPECTUS GIVING EFFECT TO
SUCH ACQUISITION WOULD NOT BE RELEVANT. SEE "RISK FACTORS--RISKS ASSOCIATED WITH
THE FAILURE TO COMPLETE THE APC ACQUISITION."

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. No assurance can be
given, however, that the APC Acquisition will be completed.

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 86.3
--------- --------- --------- -----
Gross profit....................................... 13.6 16.8 15.4 13.7
Selling, general and administrative expenses......... 4.5 6.5 5.0 4.6
Amortization expense................................. 0.5 0.5 0.5 0.6
--------- --------- --------- -----
Operating income................................... 8.6 9.8 9.9 8.5
Interest and other expense........................... 1.1 0.8 1.3 2.0
--------- --------- --------- -----
Income before provision for income taxes........... 7.5 9.0 8.6 6.5
Provision for income taxes........................... 3.0 3.6 3.4 2.6
--------- --------- --------- -----
Net income before extraordinary item............... 4.5% 5.4% 5.2% 3.9%
--------- --------- --------- -----
--------- --------- --------- -----
</TABLE>

25
<PAGE>
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
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

26
<PAGE>
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 year ended December 31, 1995 and 40.7% for the
year ended December 31, 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......................................................................... 86.3 89.2 89.4
--------- --------- ---------
Gross profit........................................................................ 13.7 10.8 10.6
Selling, general and administrative expenses.......................................... 4.7 4.5 4.3
--------- --------- ---------
Operating income.................................................................... 9.0% 6.3% 6.3%
--------- --------- ---------
--------- --------- ---------
</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 89.4% for
the year ended December 31, 1996, compared to 89.2% 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 $37.2 million, or 4.3% of revenues, for the year
ended December 31, 1996 compared to $37.4 million for the prior year, a decrease
of approximately 0.5%. These costs include 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 incremental
costs were offset by lower overall general and administrative costs.

27
<PAGE>
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 89.2% for
the year ended December 31, 1995, compared to 86.3% 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
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.

28
<PAGE>
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).

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.

29
<PAGE>
In connection with the APC Acquisition, the Company expects to enter into
the New Credit Agreement. The New Credit Agreement will provide for borrowings
under the Revolving Credit Facility of up to $750 million over six years. In
addition, a term loan facility with 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 or the reserve
adjusted LIBOR Rate plus a margin ranging from 17 to 50 basis points, depending
upon the ratio of the consolidated indebtedness of the Company to stockholders'
investment. 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. 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. THE COMPANY HAS
INCLUDED INFORMATION IN THIS SECTION REGARDING THE OPERATIONS OF APC AS A RESULT
OF ITS BELIEF THAT THE APC ACQUISITION WILL BE COMPLETED IN ACCORDANCE WITH THE
TERMS SET FORTH HEREIN. IF THE APC ACQUISITION IS NOT COMPLETED, THE INFORMATION
SET FORTH IN THIS PROSPECTUS GIVING EFFECT TO SUCH ACQUISITION WOULD NOT BE
RELEVANT. SEE "RISK FACTORS--RISKS ASSOCIATED WITH THE FAILURE TO COMPLETE THE
APC ACQUISITION."

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
one of the largest independent suppliers of structural components and assemblies
to the North American automotive market (based on net sales).

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 its 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

31
<PAGE>
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 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 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."

32
<PAGE>
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 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. To that end, the Company has
recently signed a definitive agreement to acquire an Italian automotive
supplier. See "--Global Initiatives."

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>
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:

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, Honda and Chrysler and APC currently supplies Chrysler with
substantially all of its full frame requirements.

36
<PAGE>

The following table presents an overview of the major models for which the
Company supplies products. Those models which would be added as a result of the
APC Acquisition are shown with an asterisk, while those models for which the APC
Acquisition would increase the Company's content per vehicle have been
italicized.

<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, Medium
Grand Marquis, Probe, CONTINENTAL 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,
Motors...... . Grand Prix SUBURBAN,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 has been awarded new business (i.e., parts not previously
supplied by the Company) 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
1998............... Ford Medium Truck, Lincoln, DEW98; General Motors Saturn, Innovate;
Acura
1999............... Ford Escort, Mini-Explorer, Jaguar X200
</TABLE>

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

<TABLE>
<CAPTION>
MODEL YEAR MODELS
<S> <C>
1997............... Toyota Corolla; Chrysler LH, B-Van; General Motors Prizm; Isuzu Rodeo,
Amigo
1998............... Probe replacement; GMT800(C/K platform); Acura; Chrysler Durango
</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

37
<PAGE>
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 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.

In furtherance of such strategy, the Company recently signed a definitive
agreement to acquire Societa Industria Meccanica Stampaggio S.p.A. ("SIMES"),
for approximately $50.7 million in cash (based on the exchange rate as of April
9, 1997), plus up to an additional $3.0 million (based on the same exchange
rate) if SIMES achieves certain operating results following the acquisition.
Headquartered in Turin, Italy, SIMES designs and manufactures structural parts
and components for the Italian automotive industry. SIMES generated net revenues
of approximately $70 million during its last fiscal year, with sales to Fiat
representing substantially all of such revenues. The acquisition of SIMES will
be funded through borrowings under the New Credit Agreement. The acquisition of
SIMES is expected to be completed by the end of June 1997 and is contingent upon
certain regulatory approval. As a result, no assurance can be given that such
acquisition will be completed or, if completed, will be on the terms described
herein. Due to the size of this acquisition, the Company is not required to and
has not included any pro forma or other financial information regarding SIMES in
this Prospectus.

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,

38
<PAGE>
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 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

39
<PAGE>
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 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

40
<PAGE>
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.

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
(2 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
</TABLE>

41
<PAGE>

<TABLE>
<CAPTION>
APC
SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
Milwaukee, Wisconsin................... 3,527,000 Owned Manufacturing
<S> <C> <C> <C>
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."

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 2,900 employees, of whom
approximately 1,100 are covered under collective bargaining agreements, one of
which expires in July 1997. The Company currently anticipates that it will enter
into a new collective bargaining agreement prior to the expiration of such
agreement. The remaining collective bargaining agreements expire 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

42
<PAGE>
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 relating to APC and to indemnify the
Company for any losses it may incur in connection with such lawsuits.

A.O. Smith is a party to a lawsuit alleging, among other things, that APC
misappropriated trade secrets from one of its competitors in developing certain
techniques used in a hydroforming process being developed by APC. 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 hydroforming process currently being used by APC is not
the subject of this lawsuit. As a result, the Company does not currently believe
that its ability to utilize APC's hydroforming technology will be materially
impaired even if A.O. Smith is found liable in such suit.

43
<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"), an investment partnership that participated in the R.J.
Tower Acquisition. 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 AlliedSignal, Inc.

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,

44
<PAGE>
Mr. Doherty served as Senior Vice President of the Predecessor, with
responsibility for sales and 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
of the Company 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.

45
<PAGE>
PRINCIPAL STOCKHOLDERS

Unless otherwise noted, the following table sets forth certain information
regarding ownership of the Common Stock as of April 10, 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 Corporation(2)(3)............................................... 3,064,120 21.4% 3.0%
RCM Capital Management, L.L.C.(4).................................... 1,002,800 7.0 4.4
First Union Corporation(5)........................................... 765,204 5.3 3.3
Chancellor Entities(6)............................................... 717,400 5.0 3.1
S. A. Johnson(7)..................................................... 634,182 4.4 2.3
Adrian Vander Starre(8).............................................. 19,351 * *
Dugald K. Campbell(9)................................................ 226,276 1.6 1.0
James R. Lozelle(10)................................................. 348,820 2.4 1.5
Michael W. Doherty(11)............................................... 158,020 1.1 *
Anthony A. Barone.................................................... 11,700 * *
Paul D. Rysenga...................................................... 7,150 * *
Ronald E. Gavalis.................................................... 71,444 * *
Scott D. Rued(12).................................................... 590,836 4.1 2.1
Luigi Candusso....................................................... 12,750 * *
W. H. Clement(13).................................................... 676,926 4.7 2.5
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)......... 1,629,991 11.1 6.6
</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 an affiliate of Onex Corporation. 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 Corporation ("Onex") had shared voting power of
3,064,120 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, OMI Quebec FCI LLC ("OMI"), an indirect
wholly owned subsidiary of Onex, has indicated its intention to purchase an
aggregate of 500,000 shares in the Offering. Onex has informed the Company
that these transactions are being undertaken in order to: (i) transfer
Onex's ownership interest in the Company to another entity formed under the
laws of a different jurisdiction and (ii) to qualify for certain Canadian
tax law preferences available only to equity holders with ownership levels
in excess of 10%. See "Selling Stockholders." Eric J. Rosen, a Director of
the Company, is 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.

46
<PAGE>

The address for Onex and Mr. Rosen is c/o Onex Investment Corp., 712 Fifth
Avenue, 40th Floor, New York, New York 10019. The address for Onex DHC is
421 Leader Street, Marion, Ohio 43302.

(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 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. In addition, at the time of the MSTI Acquisition, MascoTech
entered into an agreement to vote all of its shares in the same manner as
Onex and, to the extent permitted by law, granted Onex a proxy to effectuate
such agreement. This voting agreement will continue following 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. Dresdner
Bank AG also reported beneficial ownership of 1,002,800 shares of Common
Stock as a result of its being the parent corporation of RCM Capital. The
address for Dresdner Bank AG is Jurgen-Ponto-Platz 1, 60301 Frankfurt,
Germany.

(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 57,700 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 78,816 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.

47
<PAGE>
(13) Includes the shares owned by J2R, of which Mr. Clement is a partner, 69,744
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.

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).............................................. 3,064,120 21.4% 1,486,778 685,000 3.0%
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 3,064,120 shares and
sole dispositive power of 1,486,778 shares. OMI has informed the Company of
its intention to purchase an aggregate of 500,000 shares in the Offering.
Onex has informed the Company that these transactions are being undertaken
in order to: (i) transfer Onex's ownership interest in the Company to
another entity formed under the laws of a different jurisdiction and (ii) to
qualify for certain Canadian tax law preferences available only to equity
holders with ownership levels in excess of 10%. As a result, the Company has
requested that the Underwriters reserve up to 500,000 shares for sale to OMI
at the public offering price. Upon completion of the Offering, Onex is
expected to have voting power of 685,000 shares and 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 (including reasonable fees
and disbursements of one counsel chosen by the holders of a majority of the
securities being registered) other than underwriting discounts and commissions
that may be incurred by them.

The Company, Onex, J2R and its partners and certain other investors, who
collectively own 2,310,836 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 568,284 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.

48
<PAGE>
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 $1,250,000 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.

49
<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 a six
year revolving credit facility of up to $750 million, with a letter of credit
sublimit of $75 million and an alternative currency facility sublimit of $60
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 its domestic subsidiaries. In addition, sixty five percent (65%) of
the stock of certain material foreign subsidiaries will be pledged to support
the obligations incurred under the New Credit Agreement.

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 or (ii) the reserve
adjusted LIBOR Rate plus a margin ranging from 17 to 50 basis points, depending
upon the ratio of the consolidated indebtedness of the Company to stockholders'
investment. Adjustments to the margin set forth above will be made according to
the pricing matrix that will be attached to the New Credit Agreement.

The New Credit Agreement will require the Company to meet certain financial
tests, including but not limited to minimum interest coverage, minimum
debt/capital and maximum leverage ratio. The New Credit Agreement will also
contain covenants which, among other things, will limit (i) the incurrence of
additional indebtedness and contingent obligations; (ii) the creation of liens
and encumbrances; (iii) the payment of dividends; (iv) additional investments;
(v) prepayments of other indebtedness; (vi) asset sales, acquisitions, joint
ventures, mergers and consolidations; (vii) transactions with affiliates; and
(viii) 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).

50
<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, Morgan Stanley & Co. Incorporated, Robert W.
Baird & Co. Incorporated ("Baird") 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.................................................
Morgan Stanley & Co. Incorporated........................................
Robert W. Baird & 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 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 OMI. The number
of shares of Common Stock available to the general public will be reduced to the
extent OMI purchases any of the reserved shares. Any reserved shares of Common
Stock that are not so purchased by OMI 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.

51
<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, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the Common Stock.
Specifically, the Underwriters may overallot the Offering, creating a syndicate
short position. Underwriters may bid for and purchase shares of Common Stock in
the open market to cover syndicate short positions. In addition, the
Underwriters may bid for and purchase shares of Common Stock in the open market
to stabilize the price of the Common Stock. These activities may stabilize or
maintain the market price of the Common Stock above independent market levels.
The Underwriters are not required to engage in these activities, and may end
these activities 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. Summaries included in this
Prospectus of any documents filed as an exhibit to the Registration Statement
describe all material provisions of such documents but 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.

52
<PAGE>
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 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 are 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, 1996 (Commission File No. 1-12733).

2. The Company's Current Report on Form 8-K, dated April 2, 1997
(Commission File No. 1-12733).

3. The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed on February 11, 1997.

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).

53
<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-23

Combined Balance Sheets as of December 31, 1995 and 1996................................................. F-24

Combined Statements of Operations for the years ended December 31, 1994, 1995 and 1996................... F-25

Combined Statements of Cash Flows for the years ended December 31, 1994, 1995 and 1996................... F-26

Notes to Combined Financial Statements................................................................... F-27
</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 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.

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 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............................................................. 1,956 2,027 7,636
Interest income.............................................................. (57) (228) (2,533)
---------- ---------- ----------
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.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

The carrying amounts of the Company's borrowings under the outstanding
industrial development revenue bonds approximates fair value as the floating
rates applicable to these financial instruments reflect changes in the overall
market interest rates. The carrying amount of the Company's outstanding series A
and series B senior notes also approximate fair value as interest rates have not
changed materially since their issuance in May 1996.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

REVENUE RECOGNITION AND SALES COMMITMENTS:

The Company recognizes revenue as its products are shipped to its customers.
In certain instances, the Company may be committed under existing agreements to
supply product to its customers at selling prices which are not sufficient to
cover the direct cost to produce such product. In such situations that may arise
during the normal course of business, the Company records a liability for the
estimated future amount of such losses.

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 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.

STOCK OPTIONS:

The Company accounts for stock options under the provisions of APB No. 25,
under which no compensation expense is recognized when the stock options are
granted. The pro forma effects had the Company followed the provisions of SFAS
No. 123 are included in Note 4.

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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. ACQUISITIONS: (CONTINUED)
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. The amounts to be paid to MascoTech are equal
to two times the amount by which operating profit, as defined, of the MSTI
facilities exceeds $24 million each year. Based on results of operations of the
MSTI facilities through December 31, 1996, no contingent payments are due.
Contingent consideration paid in future periods, if any, will be recorded as
additional goodwill. 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 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 1996 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 14,932
---------- ----------
---------- ----------
Net income per common and common equivalent share..................... $ 1.19 $ 1.61
---------- ----------
---------- ----------
</TABLE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 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,

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. STOCKHOLDERS' INVESTMENT: (CONTINUED)
subject to certain adjustments reflecting changes in the Company's
capitalization. Information regarding the Stock Option Plan is as follows:

<TABLE>
<CAPTION>
1995 1996
----------------------------------------- -----------------------------------------
WEIGHTED WEIGHTED
SHARES AVERAGE SHARES AVERAGE
UNDER EXERCISE EXERCISE UNDER EXERCISE EXERCISE
OPTION PRICES PRICE OPTION PRICES PRICE
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of $ -- $8.00-10.00
year.......................... -- $ -- 120,750 $ 8.182
Granted....................... 133,750 8.00-10.00 8.164 139,000 15.125 15.125
Exercised..................... -- -- -- (6,625) 8.00 8.00
Forfeited..................... (13,000) 8.00 8.00 (4,875) 8.00-15.125 10.192
---------- -------------- ------ ---------- -------------- -------------
Outstanding at end of year...... 120,750 $8.00-10.00 8.182 248,250 $8.00-15.125 $ 12.035
---------- -------------- ------ ---------- -------------- -------------
Exercisable at end of year...... -- $ -- $ -- 27,625 $8.00-10.00 $ 8.182
---------- -------------- ------ ---------- -------------- -------------
Weighted average fair value of
options granted............... $ 4.23 $ 9.51
---------- ----------
</TABLE>

As of December 31, 1996, the outstanding stock options granted in 1995 have
a remaining contractual life of approximately 8.5 years and the outstanding
stock options granted in 1996 have a remaining contractual life of approximately
9.5 years.

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, 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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. STOCKHOLDERS' INVESTMENT: (CONTINUED)
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.

DIVIDENDS:

The Company has not declared or paid any cash dividends in the past, as
discussed in Note 5, the Company's debt agreements restrict the amount of
dividends the Company can declare or pay. As of December 31, 1996, under the
most restrictive debt covenants, the Company could not have paid any cash
dividends.

F-13
<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-14
<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-15
<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-16
<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-17
<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-18
<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 period from the acquisition of Edgewood through December 31,
1994, $454,000 for the year ended December 31, 1995 and $475,000 for the year
ended December 31, 1996.

F-19
<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, which will provide a total financing availability
of up to $865 million. The specific terms of the new credit facility are
currently being negotiated with the bank. The new credit facility 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.

The acquisition of APC will be accounted for as a purchase and, accordingly,
APC's assets and liabilities will be recorded at fair values as of the
acquisition date. Following is an unaudited pro forma balance sheet of the
Company, based on preliminary estimates of the allocation of the purchase price,
as if

F-20
<PAGE>
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. AGREEMENT TO ACQUIRE AUTOMOTIVE PRODUCTS COMPANY: (CONTINUED)
the acquisition of APC and the offering described above had been completed as of
December 31, 1996 (in thousands):

<TABLE>
<S> <C>
ASSETS

Current Assets.................................................. $ 276,675
Property, Plant and Equipment, net.............................. 611,994
Restricted Cash................................................. 10,833
Other Assets, net............................................... 301,375
---------
$1,200,877
---------
---------

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current Liabilities............................................. $ 160,720
Long-Term Debt, net of current maturities....................... 417,014
Other Noncurrent Liabilities.................................... 133,516
Stockholders' Investment........................................ 489,627
---------
$1,200,877
---------
---------
</TABLE>

Following are unaudited pro forma results of operations for the year ended
December 31, 1996 as if the acquisitions of APC and MSTI, the offering described
above and the 1996 Offering had been completed at the beginning of the year (in
thousands, except per share data):

<TABLE>
<S> <C>
Revenues........................................................ $1,323,105
---------
---------
Operating Income................................................ $ 112,878
---------
---------
Net Income...................................................... $ 51,434
---------
---------
Net Income per Common and Common Equivalent Share............... $ 2.20
---------
---------
</TABLE>

The unaudited pro forma financial information does not purport to represent
what the Company's financial position or results of operations would actually
have been if these transactions had occurred at such dates or to project the
Company's future results of operations.

F-21
<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 year ended December 31, 1995 does
not equal the total for the year due to the effects of rounding.

F-22
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To A.O. Smith Corporation:

We have audited the accompanying combined balance sheets 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
operations 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.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Automotive Products
Company 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-23
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY
(A DIVISION OF A.O. SMITH CORPORATION)

COMBINED BALANCE SHEETS

(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
----------- -----------
$ 469,042 $ 601,311
----------- -----------
----------- -----------

LIABILITIES AND PARENT COMPANY INVESTMENT

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................................................................... 22,100 29,500
Other noncurrent liabilities............................................................ 14,300 15,500
----------- -----------
Commitments and contingencies (Note 7)
Parent company investment............................................................... 279,312 383,314
----------- -----------
$ 469,042 $ 601,311
----------- -----------
----------- -----------
</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)

COMBINED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS)

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

F-25
<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.................................................................. $ 36,080 $ 28,484 $ 28,120
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)................................... (500) 2,200 7,400
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
Other noncurrent liabilities............................................ (1,000) 4,200 1,200
---------- ---------- ----------
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-26
<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
financial position, operations and cash flows of the operations conducted by APC
to be acquired by R.J. Tower. 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-27
<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-28
<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>

OTHER NONCURRENT LIABILITIES:

Other noncurrent liabilities consist of estimated losses to be incurred,
determined on an item-by-item basis, on the sale of products which have costs in
excess of selling prices.

REVENUE RECOGNITION AND SALES COMMITMENTS:

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

F-29
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
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 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 operations 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>

F-30
<PAGE>
AUTOMOTIVE PRODUCTS COMPANY

(A DIVISION OF A.O. SMITH CORPORATION)

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

3. MAJOR CUSTOMERS: (CONTINUED)
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 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 balance sheets. 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 operations 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)...................... (500) 2,200 7,400
--------- --------- ---------
$ 24,800 $ 19,700 $ 19,500
--------- --------- ---------
--------- --------- ---------
</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............... (2,900) (600) (900)
Other, net................................................... 100 500 300
--------- --------- ---------
Deferred income tax provision (benefit)...................... $ (500) $ 2,200 $ 7,400
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-31
<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............................. $ 21,300 $ 16,900 $ 16,700
State income taxes, net of federal benefit................... 3,300 2,600 2,600
Effect of permanent differences.............................. 200 200 200
--------- --------- ---------
Provision for income taxes................................... $ 24,800 $ 19,700 $ 19,500
--------- --------- ---------
--------- --------- ---------
</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........................ (29,400) (30,400)
Other................................................................. 400 500
---------- ----------
Net long-term deferred tax liability.................................. $ 22,100 $ 29,500
---------- ----------
---------- ----------
</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-32
<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-33
<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-34
<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..................................... 44
Principal Stockholders......................... 46
Selling Stockholders........................... 48
Description of New Credit Agreement............ 50
Underwriting................................... 51
Legal Matters.................................. 52
Experts........................................ 52
Available Information.......................... 52
Incorporation of Certain Documents by
Reference.................................... 53
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

MORGAN STANLEY & CO.
INCORPORATED

ROBERT W. BAIRD & CO.
INCORPORATED

PIPER JAFFRAY INC.

, 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 listing fee to 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............................. 65,300
Printing and mailing expenses................................... 200,000
Legal fees and expenses......................................... 500,000
Blue sky fees and expenses...................................... 10,000
Accounting fees and expenses.................................... 325,000
Miscellaneous................................................... 18,882
---------
Total....................................................... $1,300,000
---------
---------
</TABLE>

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 contemplated 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 provides 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").

ITEM 16. EXHIBITS.

The following exhibits are filed pursuant to Item 601 of Regulation S-K:

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 March 24, 1997, between Bank of America National Trust and Savings 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.
</TABLE>

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

* Previously filed.

+ The Company agrees to furnish supplementally to the Commission a copy of any
omitted schedule to such agreement upon request of the Commission in
accordance with Item 601(b)(2) of Regulation S-K.

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 a new registration statement relating to the securities offered
therein, and the offerings of such securities at that time 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 Amendment No. 2 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minneapolis, Minnesota, as of April 10, 1997.

TOWER AUTOMOTIVE, INC.

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

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 2 to Registration Statement has been signed by the following
persons in the capacities and as of the dates indicated.

SIGNATURE TITLE DATE

*
- ------------------------ Chairman of the Board and April 10, 1997
S. A. Johnson Director

*
- ------------------------ Director April 10, 1997
Adrian Vander Starre

President, Chief Executive
* Officer and
- ------------------------ Director (Principal April 10, 1997
Dugald K. Campbell Executive Officer)

Vice President and Chief
* Financial Officer
- ------------------------ (Principal Financial and April 10, 1997
Anthony A. Barone Accounting Officer)

*
- ------------------------ Director April 10, 1997
James R. Lozelle

*
- ------------------------ Director April 10, 1997
Scott D. Rued

*
- ------------------------ Director April 10, 1997
W. H. Clement

*
- ------------------------ Director April 10, 1997
Eric J. Rosen

*
- ------------------------ Director April 10, 1997
Matthew O. Diggs, Jr.

*
- ------------------------ Director April 10, 1997
F. J. Loughrey

*
- ------------------------ Director April 10, 1997
Kim B. Clark

* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 2 pursuant to the Power of Attorney executed by the
above-named officers and directors of the Registrant and previously filed
with the Securities and Exchange Commission on behalf of such officers
and directors.

/s/ SCOTT D. RUED
- ------------------------ Attorney-in-Fact April 10, 1997
Scott D. Rued

II-3
<PAGE>
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<C> <S>
1.1 Form of Underwriting Agreement.
*2.1 Asset Purchase Agreement, dated January 27, 1997, by and among A.O. Smith Corporation, A.O. Smith
Enterprises Ltd., Tower Automotive Acquisition, Inc., Tower Automotive, Inc. and R.J. Tower
Corporation.+
*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 March 24, 1997, between Bank of America National Trust and Savings 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.
</TABLE>

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

* Previously filed.

+ The Company agrees to furnish supplementally to the Commission a copy of any
omitted schedule or exhibit to such agreement upon request of the Commission
in accordance with Item 601(b)(2) of Regulation S-K.

<PAGE>

11,603,500 Shares

TOWER AUTOMOTIVE, INC.

Common Stock

UNDERWRITING AGREEMENT

April ___, 1997

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
ROBERT W. BAIRD & CO. INCORPORATED
PIPER JAFFRAY INC.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172

Dear Sirs:

Tower Automotive, Inc., a Delaware corporation (the "COMPANY"), and the
stockholders of the Company named in SCHEDULE II hereto (collectively, the
"SELLING STOCKHOLDERS"), severally propose to sell an aggregate of 10,090,000
shares of Common Stock, $0.01 par value per share of the Company (the "FIRM
SHARES"), to the several underwriters named in SCHEDULE I hereto (the
17"UNDERWRITERS"). The Firm Shares consist of 8,500,000 shares to be issued and
sold by the Company and 1,590,000 outstanding shares to be sold by the Selling
Stockholders. The Company also proposes to issue and sell to the several
Underwriters not more than 1,513,500 additional shares of Common Stock, $0.01
par value per share of the Company (the "ADDITIONAL SHARES"), if requested by
the Underwriters as provided in SECTION 2 hereof. The Firm Shares and the
Additional Shares are herein collectively called the "SHARES." The shares of
common stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK." The
Company and the Selling Stockholders are hereinafter collectively called the
"SELLERS."

1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "COMMISSION") in
accordance with the provisions

<PAGE>

of the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively called the "ACT"), a registration statement
on Form S-3 including a prospectus relating to the Shares, which may be amended.
The registration statement as amended at the time when it becomes effective,
including a registration statement (if any) filed pursuant to Rule 462(b) under
the Act increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to
as the "REGISTRATION STATEMENT"; and the prospectus in the form first used to
confirm sales of Shares is hereinafter referred as the "PROSPECTUS." Any
reference herein to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3, which were
filed under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (the "EXCHANGE ACT"), on or before the
effective date of the Registration Statement (the "EFFECTIVE DATE") or the date
of such preliminary prospectus or the Prospectus, as the case may be. Any
reference herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date, or the date of any preliminary prospectus
or the Prospectus, as the case may be, and deemed to be incorporated therein by
reference.

2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, (i) the Company agrees to issue and sell 8,500,000 Firm Shares, (ii)
each Selling Stockholder agrees, severally and not jointly, to sell the number
of Firm Shares set forth opposite such Selling Stockholder's name in SCHEDULE II
hereto and (iii) each Underwriter agrees, severally and not jointly, to purchase
from each Seller at a price per share of $______ (the "PURCHASE PRICE") the
number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) which bears the same proportion to the total number
of Firm Shares to be sold by such Seller as the number of Firm Shares set forth
opposite the name of such Underwriter in SCHEDULE I hereto bears to the total
number of Firm Shares.

On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell up to 1,513,500 Additional Shares and (ii) the Underwriters shall
have the right to purchase, severally and not jointly, up to an aggregate of
1,513,500 Additional Shares from the Company at the Purchase Price. Additional
Shares may be purchased solely for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The Underwriters may
exercise their right to purchase Additional Shares in whole or in part from time
to time by giving written notice thereof to the Company within 30 days after the
date of this Agreement. You shall give any such notice on behalf of the
Underwriters and such notice shall specify the aggregate number of Additional
Shares to be purchased pursuant to such exercise and the date for payment and
delivery thereof. The date specified in any such notice shall be a business day
(i) no earlier than the Closing Date (as hereinafter defined), (ii) no later
than ten business days after such notice has been given and (iii) no earlier
than two business days after such notice has been given. If any Additional
Shares are to be purchased, each Underwriter, severally and not jointly, agrees
to purchase from the Company the number of Additional Shares (subject to such
adjustments to

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eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Additional Shares to be purchased from the
Company as the number of Firm Shares set forth opposite the name of such
Underwriter in SCHEDULE I bears to the total number of Firm Shares.

The Sellers (other than Onex DHC LLC) hereby agree, severally and not
jointly, and the Company shall, concurrently with the execution of this
Agreement, deliver an agreement executed by (i) each of the directors and
executive officers of the Company and (ii) each stockholder listed on ANNEX I
hereto, pursuant to which each such person agrees, not to offer, sell, contract
to sell, grant any option to purchase, or otherwise dispose of any common stock
of the Company or any securities convertible into or exercisable or exchangeable
for such common stock or in any other manner transfer all or a portion of the
economic consequences associated with the ownership of any such common stock,
except to the Underwriters pursuant to this Agreement, for a period of 90 days
after the date of the Prospectus without the prior written consent of Donaldson,
Lufkin & Jenrette Securities Corporation. Notwithstanding the foregoing, during
such period (i) the Company may grant stock options pursuant to the Company's
existing stock option plan, (ii) the Company may issue shares of its common
stock under its employee stock purchase plan or upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof, and
(iii) J2R Partners may sell shares pursuant to this Agreement.

3. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.

The Underwriters covenant and agree with the Company that the Underwriters
will reserve 500,000 of the Firm Shares for offering and sale to OMI Quebec FCI
LLC at the public offering price.

4. DELIVERY AND PAYMENT. Delivery to the Underwriters of and payment for
the Firm Shares shall be made at 10:00 A.M., New York City time, on the third or
fourth business day unless otherwise permitted by the Commission pursuant to
Rule 15c6-1 of the Exchange Act (the "CLOSING DATE") following the date of the
public offering, at such place outside the State of New York as you shall
designate. The Closing Date and the location of delivery of and the form of
payment for the Firm Shares may be varied by agreement between you and the
Sellers.

Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at such place as you shall designate
at 10:00 A.M., New York City time, on the date specified in the applicable
exercise notice given by you pursuant to SECTION 2 ("an OPTION CLOSING DATE").
Any such Option Closing Date and the location of delivery of and the form of
payment for such Additional Shares may be varied by agreement between you and
the Company.

Certificates for the Shares shall be registered in such names and issued in
such denominations as you shall request in writing not later than two full
business days prior to the Closing Date or an Option Closing Date, as the case
may be. Such certificates shall be made

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available to you for inspection not later than 9:30 A.M., New York City time, on
the business day next preceding the Closing Date or an Option Closing Date, as
the case may be. Certificates in definitive form evidencing the Shares shall be
delivered to you on the Closing Date or an Option Closing Date, as the case may
be, with any transfer or stamp taxes thereon duly paid by the respective
Sellers, for the respective accounts of the several Underwriters, against
payment of the Purchase Price therefor by wire transfer or certified or official
bank checks payable in immediately available Federal funds to the order of the
applicable Sellers.

5. AGREEMENTS OF THE COMPANY. The Company agrees with you:

(a) To use its best efforts to cause the Registration Statement to become
effective at the earliest possible time.

(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective and
when any post-effective amendment to it becomes effective, (ii) of any request
by the Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation of any proceeding for
such purposes, and (iv) of the happening of any event during the period referred
to in paragraph (e) below which makes any statement of a material fact made in
the Registration Statement or the Prospectus untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
in order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal or lifting of such order at the earliest possible time.

(c) To furnish to you, without charge, five copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each Underwriter designated by
you such number of conformed copies of the Registration Statement as so filed
and of each amendment to it, without exhibits, as you may reasonably request.

(d) Not to file any amendment or supplement to the Registration Statement,
whether before or after the time when it becomes effective, or to make any
amendment or supplement to the Prospectus of which you shall not previously have
been advised or to which you shall reasonably object; and, at any time prior to
the termination of the offering of the Shares, to prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement or supplement to the Prospectus which may be necessary or
advisable in connection with the distribution of the Shares by you, and to use
its best efforts to cause the same to become promptly effective.

(e) Promptly after the Registration Statement becomes effective, and from
time to time thereafter at any time prior to the termination of the offering of
the Shares, if in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish to each Underwriter and dealer as many

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<PAGE>

copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.

(f) If during the period specified in paragraph (e) any event shall occur
as a result of which, in the opinion of counsel for the Underwriters, it becomes
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with any law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with law, and to furnish to each Underwriter and to
such dealers as you shall specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.

(g) Prior to any public offering of the Shares, to cooperate with you and
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such qualification in effect so long as required
for distribution of the Shares and to file such other documents as may be
necessary in order to effect such registration or qualification, provided,
however, that neither the Company nor any of its subsidiaries shall be obligated
to file any general consent to service of process or to qualify as a foreign
corporation or dealer in securities in any jurisdiction in which it is not so
qualified, or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.

(h) To mail and make generally available to its stockholders as soon as
reasonably practicable an earnings statement covering a period of at least
twelve months after the effective date of the Registration Statement (but in no
event commencing later than 90 days after such date) which shall satisfy the
provisions of Section 11(a) of the Act, and to advise you in writing when such
statement has been so made available.

(i) During the period of three years after the date of this Agreement to
make generally available, as soon as reasonably practicable after the end of
each fiscal year, to the record holders of its Common Stock a financial report
of the Company and its subsidiaries on a consolidated basis (and a similar
financial report of all unconsolidated subsidiaries, if any), all such financial
reports to include a consolidated balance sheet, a consolidated statement of
operations, a consolidated statement of cash flows and a consolidated statement
of shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent certified public accountants.

(j) During the period referred to in paragraph (i), to furnish to you as
soon as available a copy of each report or other publicly available information
of the Company mailed to the holders of Common Stock or filed with the
Commission and such other publicly available information concerning the Company
and its subsidiaries as you may reasonably request.

(k) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the Registration
Statement (including financial statements

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<PAGE>

and exhibits), each preliminary prospectus and all amendments and supplements to
any of them prior to or during the period specified in paragraph (e), (ii) the
printing and delivery of the Prospectus and all amendments or supplements to it
during the period specified in paragraph (e), (iii) the delivery of this
Agreement, the Preliminary and Supplemental Blue Sky Memoranda and all other
agreements, memoranda, correspondence and other documents printed and delivered
in connection with the offering of the Shares (including in each case any
disbursements of counsel for the Underwriters relating to such delivery), (iv)
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states (including in each case the
fees and disbursements of counsel for the Underwriters relating to such
registration or qualification and memoranda relating thereto), (v) filings and
clearance with the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the offering, (vi) the listing of the Shares on the New York
Stock Exchange (the "NYSE"), (vii) furnishing such copies of the Registration
Statement, the Prospectus and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold and (viii) the performance
by the Sellers of their other obligations under this Agreement.

(l) To use its best efforts to maintain the listing of the Common Stock on
the NYSE (or on a national securities exchange) for a period of three years
after the effective date of the Registration Statement.

(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.

6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Underwriter that:

(a) The Company meets the requirements for use of Form S-3 under the Act.
The Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings for
such purpose are pending before or, to the Company's knowledge, threatened by
the Commission.

(b) (i) Each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Act, and (iii) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon the information set forth
(x) on the cover page of the Prospectus with respect to price, underwriting
discount and terms of the offering and delivery of the shares relating thereto,
(y) in the final paragraph on the inside cover of the Prospectus regarding

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<PAGE>

possible stabilizing transactions and (z) in the table contained in the first
paragraph in the "Underwriting" section of the Prospectus regarding the number
of shares to be purchased by each Underwriter named therein, as well as the
information set forth in the third and eighth paragraphs in such "Underwriting"
section (collectively, the "UNDERWRITER INFORMATION"), which is the only
information furnished to the Company in writing by the Underwriters through you
expressly for use therein.

(c) (i) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, and each Registration Statement filed
pursuant to Rule 462(b) under the Act, if any, complied when so filed in all
material respects with the Act; and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and (ii) the documents which are
incorporated by reference in the preliminary prospectus and the Prospectus or
from which information is so incorporated by reference, when they become
effective or were filed with the Commission, as the case may be, complied in all
material respects with the requirements of the Act or the Exchange Act, as
applicable; and any documents so filed and incorporated by reference subsequent
to the Effective Date shall, when they are filed with the Commission, conform in
all material respects with the requirements of the Act and the Exchange Act, as
applicable.

(d) The Company and each of its subsidiaries has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to carry
on its business as it is currently being conducted and to own, lease and operate
its properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT.")

(e) All of the outstanding shares of capital stock of, or other ownership
interests in, each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and, except as otherwise
set forth in the Prospectus and except for liens pursuant to the "New Credit
Agreement" described in the Prospectus, are owned by the Company, free and clear
of any security interest, claim, lien, encumbrance or adverse interest of any
nature.

(f) All the outstanding shares of capital stock of the Company (including
the Shares to be sold by the Selling Stockholders) have been duly authorized and
validly issued and are fully paid, non-assessable and not subject to any
preemptive or similar rights; and the Shares to be issued and sold by the
Company hereunder have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.

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<PAGE>

(g) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in the
Prospectus. Except as set forth in the Prospectus or as may be granted under
its existing options plans, the Company does not have outstanding, and at the
Closing Date will not have outstanding, any options to purchase, or any rights
or warrants to subscribe for, or any securities or obligations convertible into,
or any contracts or commitments to issue or sell, any shares of its capital
stock, any shares of capital stock of any subsidiary or any such warrants,
convertible securities or obligations.

(h) Neither the Company nor any of its subsidiaries is in violation of its
respective charter or by-laws or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the Company and its
subsidiaries, taken as a whole, to which the Company or any of its subsidiaries
is a party or by which it or any of its subsidiaries or their respective
property is bound, which default could reasonably be expected to result in a
Material Adverse Effect.

(i) The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company and is
enforceable against the Company in accordance with the terms hereof, except to
the extent that the enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law, and except to the extent that enforcement of the
indemnification and contribution provisions of this Agreement may be limited by
applicable public policy and the discretion of the court before which any
proceeding therefor may be brought. The execution, delivery and performance of
this Agreement, compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may be required
under the Act, the Exchange Act or the securities or Blue Sky laws of the
various states or rules of the NASD) and will not conflict with or constitute a
breach of any of the terms or provisions of, or constitute a default under, the
certificate of incorporation or by-laws of the Company or any of its
subsidiaries, any contract or other agreement to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any of its properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company or any of its subsidiaries, other than conflicts or breaches that,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect or materially impair the ability of the Company to
perform its obligations under this Agreement.

(j) Except as otherwise set forth in the Prospectus, there are no material
legal or governmental proceedings pending, or to the Company's knowledge
threatened, to which the Company, any of its subsidiaries or any of the
respective officers in their capacity as such is a party or of which any of
their respective property is the subject. No contract or document of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement is not so
described or filed as required.

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(k) Except as otherwise set forth in the Prospectus, neither the Company
nor any of its subsidiaries has violated any foreign, federal, state or local
law or regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), nor any foreign, federal, state or local
employment or labor law or regulation, including, without limitation, laws or
regulations relating to discrimination in the hiring, promotion or pay of
employees, nor any applicable federal or state wages and hours laws or
regulations, nor any provisions of the Employee Retirement Income Security Act
or the rules and regulations promulgated thereunder, which in each case could
reasonably be expected to result in a Material Adverse Effect. Except as
otherwise set forth in the Prospectus, no labor dispute with the employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent or threatened; and the Company is not aware of any
existing, imminent or threatened labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors that could reasonably be
expected to result in a Material Adverse Effect.

(l) The Company and each of its subsidiaries has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("PERMITS"), including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease and operate its respective properties and
to conduct its business in the manner described in the Prospectus except for
such permits, licenses, franchises and authorizations, the absence of which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect; the Company and each of its subsidiaries has
fulfilled and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and, except as
described in the Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its subsidiaries.

(m) Except as otherwise set forth in the Prospectus or the Company's most
recent Annual Report on Form 10-K, or such as are not material to the business,
prospects, financial condition or results of operation of the Company and its
subsidiaries, taken as a whole, the Company and each of its subsidiaries has
good and marketable title, free and clear of all liens, claims, encumbrances and
restrictions except liens for taxes not yet due and payable and liens that do
not materially detract from the value thereof or materially impair its use in
the business of the Company or such subsidiary, to all property and assets
described in the Registration Statement as being owned by it. All leases to
which the Company or any of its subsidiaries is a party are valid and binding
and no default has occurred or is continuing thereunder, which might result in a
Material Adverse Effect, and the Company and its subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which any of them is a party as
lessee with such exceptions as do not materially interfere with the use made by
the Company or such subsidiary.

(n) The Company and each of its subsidiaries maintain reasonably adequate
insurance.

(o) Arthur Andersen LLP are independent public accountants with respect to
the Company and Automotive Products Company, a division of A.O. Smith
Corporation ("APC") as required by the Act.

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(p) The financial statements, together with the related schedules and
notes, forming part of the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and its subsidiaries and APC on the bases stated in the Registration Statement
at the respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data regarding the Company and APC set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) is, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company and APC, as applicable. The pro forma financial statements and the pro
forma financial information included in the Registration Statement or the
Prospectus (i) present fairly in all material respects the information shown
therein, (ii) have been prepared in accordance with Article 11 of Regulation S-X
relating to pro forma financial statements and (iii) have been properly computed
on the bases described therein. The assumptions used in the preparation of the
pro forma financial statements and other pro forma financial information
included in the Registration Statement or the Prospectus are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein. No other financial statements or schedules
are required by the Act or the Exchange Act to be included in the Registration
Statement or the Prospectus.

(q) The Company is not an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended.

(r) No holder of securities of the Company has rights to require the
registration of any securities of the Company pursuant to the Act, other than
rights which have been satisfied by the inclusion of securities in the offering
made pursuant to the Registration Statement, or rights which have been waived.

(s) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) and all regulations issued
thereunder.

(t) The Shares are duly authorized for listing, subject to official notice
of issuance, on the NYSE.

(u) The Company, Tower Automotive Acquisition, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company ("ACQUISITION"), and R.
J. Tower Corporation, a Michigan corporation and wholly-owned subsidiary of the
Company ("TOWER MICHIGAN", together with the Company and Acquisition, the "APC
PURCHASERS") have entered into an Asset Purchase Agreement dated as of January
27, 1997 (the "APC AGREEMENT") with A. O. Smith Corporation, a Delaware
corporation, and A. O. Smith Enterprises, Ltd., a corporation organized under
the laws of Canada. Each of the APC Purchasers has full corporate power and
authority to enter into the APC Agreement, and such agreement has been duly
authorized, executed and delivered by each of the APC Purchasers. The APC
Agreement constitutes the valid and binding agreement of each of the APC
Purchasers and is enforceable against each of them in accordance with the terms
thereof, except to the extent that the enforcement thereof may be limited by

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applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in a proceeding in equity or at law. Except as set forth in the APC
Agreement, the execution, delivery and performance of the APC Agreement,
compliance by each of the APC Purchasers with all the provisions thereof and the
consummation of the transactions contemplated thereby, will not require any
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body that has not or will not be
obtained prior to or simultaneous with the consummation of the Acquisition, and
will not result in the creation or imposition of any lien, charge or encumbrance
upon any of the assets of the APC Purchasers or any of their subsidiaries
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the certificate of incorporation or
by-laws of the APC Purchasers or any of their subsidiaries, any contract or
other agreement to which the APC Purchasers or any of their subsidiaries is a
party, or by which the APC Purchasers or any of their subsidiaries or any of
their properties are bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the APC Purchasers or any of their subsidiaries. To the Company's knowledge, no
labor dispute exists, or is imminent or threatened, with any employees to be
hired by the APC Purchasers in connection with the Acquisition; and the Company
is not aware of any existing, imminent or threatened labor disturbance by the
employees of any principal suppliers, manufacturers or contractors providing
goods or services to the businesses to be acquired in connection with the
Acquisition.

7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF EACH SELLING
STOCKHOLDER. Each Selling Stockholder, severally and not jointly, represents
and warrants to each Underwriter that:

(a) Each Selling Stockholder has, and on the Closing Date will have, good
and clear title to the Shares to be sold by such Selling Stockholder pursuant to
this Agreement, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever.

(b) Upon delivery of and payment for such Selling Stockholder's Shares
pursuant to this Agreement, good and clear title to such Shares will pass to the
Underwriters, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever.

(c) Such Selling Stockholder has, and on the Closing Date will have, full
legal right, power and authority to enter into this Agreement and to sell,
assign, transfer and deliver such Selling Stockholder's Shares in the manner
provided herein, and this Agreement has been duly authorized, executed and
delivered by such Selling Stockholder and this Agreement is a valid and binding
agreement of such Selling Stockholder enforceable in accordance with its terms,
except as rights to indemnity and contribution hereunder may be limited by
applicable law.

(d) Such Selling Stockholder has further authorized the execution,
delivery and performance of its obligations pursuant to any other document
necessary or desirable in connection with transactions contemplated hereby.

-11-

<PAGE>

(e) Such Selling Stockholder has not taken, and will not take, directly or
indirectly, any action designed to, or which might reasonably be expected to,
cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares pursuant to the
distribution contemplated by this Agreement, and other than as permitted by the
Act, such Selling Stockholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale
of the Shares.

(f) The execution, delivery and performance of this Agreement by such
Selling Stockholder, compliance by such Selling Stockholder with all the
provisions hereof and the consummation by such Selling Stockholder of the
transactions contemplated hereby (i) will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except such as have been obtained under the
Act and such as may be required under state securities or Blue Sky laws and the
by-laws and rules of the NASD (or any successor organization thereto) in
connection with the purchase and distribution by the Underwriters of the Shares
to be sold by such Selling Stockholder) (ii) will not conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the organizational documents of such Selling Stockholder, (iii) will not
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, any contract or other agreement, indenture or other instrument to
which such Selling Stockholder is a party or by which such Selling Stockholder
or property of such Selling Stockholder is bound, other than conflicts, breaches
or defaults which would not impair the ability of such Selling Stockholder to
perform its obligations under this Agreement or (iv) violate or conflict with
any judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to such Selling Stockholder or the
property of such Selling Stockholder other than violations or conflicts which
would not impair the ability of such Selling Stockholder to perform its
obligations under this Agreement.

(g) Such parts of the Registration Statement under the captions "Principal
Stockholders" and "Selling Stockholders" which specifically relate to such
Selling Stockholder do not, and will not on the Closing Date (and any Option
Closing Date, if applicable), contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of circumstances under which they were
made, not misleading.

(h) At any time during the period described in SECTION 5(e) hereof, if
there is any change in the information referred to in SECTION 7(g) above, such
Selling Stockholder will immediately notify you of such change.

(i) Each Selling Stockholder (x) who is not a U.S. Person (as defined
under applicable U.S. federal tax legislation) will deliver to you prior to the
Closing Date a certificate to the effect that such Selling Stockholder is not a
U.S. Person, which certificate may be in the form of a properly completed and
executed U.S. Treasury Department Form W-8 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof), or (y)
who is a U.S. Person (as defined under applicable U.S. federal tax legislation)
will deliver to you prior to the Closing Date a properly completed and executed
U.S. Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).

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<PAGE>

8. INDEMNIFICATION. (a)(i) Each of the Company and those subsidiaries of
the Company set forth on the signature pages of this Agreement (for purposes of
this SECTION 8, the use of the term "Company" shall include such subsidiaries)
shall indemnify and hold harmless each Underwriter, its directors, its officers
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act and each Selling
Stockholder, its directors and officers and each person, if any, who controls
any Selling Stockholder within the meaning of Section 15 of the Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages,
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon (and in conformity with) (x) information relating to such
Selling Stockholder furnished in writing to the Company by or on behalf of such
Selling Stockholder expressly for use therein, or (y) the Underwriter
Information, which is the only information furnished in writing by or on behalf
of the Underwriters through you expressly for use in the Registration Statement,
the Prospectus or any preliminary prospectus, and (ii) each Selling Stockholder,
severally in proportion to the number of Shares actually sold by such Selling
Stockholder and not jointly, shall indemnify and hold harmless each Underwriter,
its directors, its officers and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and each other Selling Stockholder, its directors and officers and
each person, if any, who controls any Selling Stockholder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon (and in conformity
with) information relating to such Selling Stockholder furnished in writing to
the Company by or on behalf of such Selling Stockholder expressly for use
therein. Notwithstanding the foregoing, (i) the aggregate liability of any
Selling Stockholder pursuant to the provisions of this paragraph shall be
limited to an amount equal to the aggregate net proceeds received by such
Selling Stockholder from the sale of such Selling Stockholder's Shares
hereunder, and (ii) the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages and liabilities and
judgments purchased Shares, or any director, officer or person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if such Prospectus (as so amended and
supplemented) had been delivered, such

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<PAGE>

delivery would have completely cured the defect giving rise to such loss, claim,
damage, liability or judgment.

(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company or any
Selling Stockholder, such Underwriter shall promptly notify in writing the
Company and the Selling Stockholder against which indemnification is sought, and
the Company or such Selling Stockholder, as applicable, shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all reasonable fees and expenses. Any
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the reasonable fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the employment of such counsel
has been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense and employ counsel or
(iii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the indemnifying
party, as the case may be, and such Underwriter or such controlling person shall
have been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party, as the case may be, (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all such Underwriters and controlling
persons, which firm shall be designated in writing by Donaldson, Lufkin &
Jenrette Securities Corporation and that all such reasonable fees and expenses
shall be reimbursed as they are incurred). A Seller shall not be liable for
any settlement of any such action effected without the written consent of such
Seller but if settled with the written consent of such Seller, such Seller
agrees to indemnify and hold harmless any Underwriter and any such controlling
person from and against any loss or liability by reason of such settlement.
Notwithstanding the immediately preceding sentence, if in any case where the
fees and expenses of counsel are at the expense of the indemnifying party and an
indemnified party shall have requested the indemnifying party to reimburse the
indemnified party for such fees and expenses of counsel as incurred, such
indemnifying party agrees that it shall be liable for any settlement of any
action effected without its written consent if (i) such settlement is entered
into more than thirty business days after the receipt by such indemnifying party
of the aforesaid request and (ii) such indemnifying party shall have failed to
reimburse the indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

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<PAGE>

(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement, any person controlling the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, each Selling Stockholder and each
person, if any, controlling such Selling Stockholder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Sellers to each Underwriter but only with
respect to the Underwriter Information, provided, however, that in no case shall
any Underwriter be liable or responsible for any amount in excess of the
underwriting discounts and commissions actually received by such Underwriter in
connection with the sale of the Shares. In case any action shall be brought
against the Company, any of its directors, any such officer or any person
controlling the Company or any Selling Stockholder or any person controlling
such Selling Stockholder based on the Registration Statement, the Prospectus or
any preliminary prospectus and in respect of which indemnity may be sought
against any Underwriter, the Underwriter shall have the rights and duties given
to the Sellers (except that if any Seller shall have assumed the defense
thereof, such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company, its directors, any such officers and any person controlling the Company
and each Selling Stockholder and any person controlling such Selling Stockholder
shall have the rights and duties given to the Underwriter by SECTION 8(b)
hereof.

(d) If the indemnification provided for in this SECTION 8 is unavailable
(other than as expressly provided above) to an indemnified party in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above, but also the
relative fault of the Sellers and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Sellers,
and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers and the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Company, the Selling Stockholders or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this SECTION 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation

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<PAGE>

which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
SECTION 8, no Underwriter shall be required to contribute any amount in excess
of the discounts and commissions actually received by it in connection with the
sale of the Shares and no Selling Stockholder shall be required to contribute an
amount in excess of the net proceeds from the offering actually received by such
Selling Stockholder under this Agreement or to contribute any amount in respect
of losses, claims, liabilities, expenses, damages or amounts paid in settlement
that such Selling Stockholder would not be obligated to indemnify under Section
8(a). No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this SECTION 8(d) are several in
proportion to the respective number of Shares purchased by each of the
Underwriters hereunder and not joint and the Selling Stockholders' obligations
to contribute pursuant to this Section 8(d) are several in proportion to the net
proceeds from the offering received by them and not joint. For purposes of this
Section 8(d), any person who controls a party to this Agreement within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act will have the
same rights to contribution as that party.

(e) J2R Partners hereby designates the Company as its authorized agent,
and Onex DHC LLC hereby designates Onex Investment Corp., 712 Fifth Avenue, 40th
Floor, New York, New York, 10019 as its authorized agent, upon which process may
be served in any action, suit or proceeding which may be instituted in any state
or federal court in the State of New York by any Underwriter or person
controlling an Underwriter asserting a claim for indemnification or contribution
under or pursuant to this SECTION 8, and each Seller will accept the
jurisdiction of such court in such action, and waives, to the fullest extent
permitted by applicable law, any defense based upon lack of personal
jurisdiction or venue. A copy of any such process shall be sent or given to
such Seller, at the address for notices specified in SECTION 12 hereof.

9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Firm Shares under this Agreement are subject to
the satisfaction of each of the following conditions:

(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.

(b) The Registration Statement shall have become effective not later than
5:00 p.m. (and in the case of a Registration Statement filed under Rule 462(b)
of the Act, not later than 10:00 p.m.), New York City time, on the date of this
Agreement or at such later date and time as you may approve in writing, and at
the Closing Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending before or contemplated by the Commission.

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<PAGE>

(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary course of
business, of the Company, (ii) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus there shall not have
been any change, or any development involving a prospective material adverse
change, in the capital stock or in the long-term debt of the Company from that
set forth in the Registration Statement and Prospectus, (iii) the Company and
its subsidiaries shall have no liability or obligation, direct or contingent,
which is material to the Company and its subsidiaries, taken as a whole, other
than those reflected in the Registration Statement and the Prospectus and (iv)
on the Closing Date you shall have received a certificate dated the Closing
Date, signed by the Chief Executive Officer and Chief Financial Officer of the
Company, confirming the matters set forth in paragraphs (a), (b), and (c) of
this SECTION 9.

(d) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date and you shall
have received a certificate to such effect, dated the Closing Date, from the
Selling Stockholders.

(e) You shall have received on the Closing Date an opinion (satisfactory
to you and counsel for the Underwriters), dated the Closing Date, of (i)
Kirkland & Ellis, counsel for the Company, regarding the matters specified in
ANNEX II hereto, and (ii) Kaye, Scholer, Fierman, Hays & Handler, LLP, counsel
for Onex DHC LLC, and Kirkland & Ellis, counsel for J2R Partners, regarding the
matters specified in ANNEX III hereto. Such opinions shall be rendered to you
at the request of the Company or one or more of the Selling Stockholders, as the
case may be, and shall so state therein.

(f) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Gardner, Carton & Douglas, counsel for the Underwriters,
regarding the matters specified in ANNEX IV hereto.

(g) On the date of the Prospectus, you shall have received a letter from
Arthur Andersen, LLP, dated the date of its delivery, addressed to the
Underwriters and in form and substance satisfactory to you, confirming that they
are independent accountants with respect to the Company and APC as required by
the Act, opining that the financial and other statistical and numerical
information contained in the Registration Statement or incorporated by reference
therein complies as to form with the applicable accounting requirements of the
Act, and stating certain other agreed upon matters as to the financial and other
statistical and numerical information contained in the Registration Statement or
incorporated by reference therein, including any changes in the capital stock,
increases in short-term debt or long-term debt, any decrease in consolidated
working capital or net assets or in consolidated revenues, operating income or
in the total or per share amounts of net income. At the Closing Date, you shall
have received an additional letter from Arthur Andersen, LLP, dated the date of
its delivery, and addressed to the Underwriters which shall confirm, on the
basis of a review in accordance with the procedures set forth therein, that
nothing has come to their attention during the period from the date of the
letter referred to in the prior sentence to a date not more than five days prior
to the

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<PAGE>

Closing Date, which would require any change in their letter dated the date of
the Prospectus, if it were required to be dated and delivered at the Closing
Date.

(h) The Company and the Selling Stockholders shall not have failed at or
prior to the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company and the
Selling Stockholders at or prior to the Closing Date in any material respect.

The several obligations of the Underwriters to purchase any Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of such Additional
Shares and other matters related to the issuance of such Additional Shares.

10. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.

This Agreement may be terminated at any time prior to the Closing Date by
you by written notice to the Sellers if any of the following has occurred: (i)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or development
involving a prospective material adverse change in the condition, financial or
otherwise, of the Company and its subsidiaries, taken as a whole, or the
earnings, affairs, or business prospects of the Company and its subsidiaries,
taken as a whole, whether or not arising in the ordinary course of business,
which would, in your judgment, make it impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic conditions or in the financial markets of the United
States or elsewhere that, in your judgment, is material and adverse and would,
in your judgment, make it impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus, (iii) the suspension or material
limitation of trading in securities on the NYSE, the American Stock Exchange or
the Nasdaq Stock Market or limitation on prices for securities on any such
exchange or the Nasdaq Stock Market, or (iv) the declaration of a banking
moratorium by either federal or New York State authorities.

If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in SCHEDULE I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; PROVIDED that in no event

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<PAGE>

shall the number of Firm Shares or Additional Shares, as the case may be, which
any Underwriter has agreed to purchase pursuant to SECTION 2 hereof be increased
pursuant to this SECTION 10 by an amount in excess of one-ninth of such number
of Firm Shares or Additional Shares, as the case may be, without the written
consent of such Underwriter. If on the Closing Date or on an Option Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Firm Shares, or Additional Shares, as the case may be, and the
aggregate number of Firm Shares or Additional Shares, as the case may be, with
respect to which such default occurs is more than one-tenth of the aggregate
number of Shares to be purchased on such date by all Underwriters and
arrangements satisfactory to you and the applicable Sellers for purchase of such
Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter and
the applicable Sellers. In any such case which does not result in termination
of this Agreement, either you or the Sellers shall have the right to postpone
the Closing Date or the applicable Option Closing Date, as the case may be, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.

11. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
agrees with you and the Company:

(a) To pay or to cause to be paid all transfer and stamp taxes with
respect to the Shares to be sold by such Selling Stockholder to the Underwriters
pursuant to this Agreement; and

(b) To take all reasonable actions prior to the Closing Date to satisfy
all conditions precedent relating to the delivery by such Selling Stockholder of
the Shares to be sold by it pursuant to this Agreement.

12. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company or J2R Partners,
c/o Tower Automotive, Inc., 4508 IDS Center, Minneapolis, Minnesota 55402,
Attention: Scott D. Rued, (b) if to Onex DHC LLC, to Onex DHC LLC, 712 Fifth
Avenue, New York, New York 10019, Attention: Eric J. Rosen and (c) if to any
Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette Securities
Corporation, 277 Park Avenue, New York, New York 10172, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.

The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Stockholders, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Sellers, the officers or directors of
the Company or any controlling person of the Sellers, (ii) acceptance of the
Shares and payment for them hereunder and (iii) termination of this Agreement.

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<PAGE>

If this Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement (other than any termination
pursuant to Section 10(ii), (iii) or (iv)), the Company agrees to reimburse the
several Underwriters for all out-of-pocket expenses (including the reasonable
fees and disbursements of counsel) reasonably incurred by them, provided that,
if such termination occurs because Onex DHC LLC fails to deliver the stock
certificates for the Firm Shares to be sold by it pursuant to this Agreement,
then Onex DHC LLC shall reimburse the Company for such expenses.

Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Sellers, the Underwriters, any
controlling persons referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include a purchaser of any of the
Shares from any of the several Underwriters merely because of such purchase.

This Agreement shall be governed and construed in accordance with the laws
of the State of New York.

This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.

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<PAGE>

Please confirm that the foregoing correctly sets forth the agreement
between the Company, the subsidiaries of the Company set forth on this signature
page, the Selling Stockholders and the several Underwriters.

Very truly yours,

TOWER AUTOMOTIVE, INC.

By:
-------------------------------------
Title:

Each of the subsidiaries of the Company set forth
below executes this Agreement for the purpose of
providing the indemnification and contribution in
SECTION 8.

R.J. TOWER CORPORATION
(Michigan)

By:
-------------------------------------
Title:

R.J. TOWER CORPORATION
(Kentucky)

By:
-------------------------------------
Title:

R.J. TOWER CORPORATION
(Indiana)

By:
-------------------------------------
Title:

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<PAGE>

EDGEWOOD MANUFACTURING CORP.

By:
-------------------------------------
Title:

KALAMAZOO STAMPING AND DIE COMPANY

By:
-------------------------------------
Title:

TOWER AUTOMOTIVE PRODUCTS COMPANY, INC.

By:
-------------------------------------
Title:

TRYLON CORPORATION

By:
-------------------------------------
Title:

TOWER AUTOMOTIVE DELAWARE, INC.

By:
-------------------------------------
Title:

TOWER AUTOMOTIVE CANADA, INC.

By:
-------------------------------------
Title:

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<PAGE>

THE SELLING STOCKHOLDERS:

ONEX DHC LLC

By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------

J2R PARTNERS

By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
ROBERT W. BAIRD & CO. INCORPORATED
PIPER JAFFRAY INC.

Acting severally on behalf of
themselves

By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

By:
--------------------------------

-23-

<PAGE>

SCHEDULE I
-----------

Number of Firm
Underwriters Shares to be Purchased
- ------------ ----------------------

Donaldson, Lufkin & Jenrette
Securities Corporation
PaineWebber Incorporated
Morgan Stanley & Co. Incorporated
Robert W. Baird & Co. Incorporated
Piper Jaffray Inc.

----------------------
Total

-24-

<PAGE>

SCHEDULE II
-----------

Number of Firm
Selling Stockholder Shares to be Sold
- ------------------- -----------------

Onex DHC LLC 1,486,778
J2R Partners 103,222

-25-

<PAGE>

ANNEX I
--------

Required Stockholder Lock-ups
-----------------------------

OMI Quebec FCI LLC
W. H. Clement
Robert R. Hibbs
Mary L. Johnson
Carl E. Nelson

-26-

<PAGE>

ANNEX II
---------

LEGAL OPINION OF COMPANY COUNSEL

1. The Company has been duly incorporated and is a corporation existing
and in good standing under the laws of the State of Delaware and has the
corporate power and authority required to carry on its business as, to such
counsel's knowledge, it is currently being conducted and to own, lease and
operate its properties as described in the Prospectus. The Company is duly
qualified to do business as a foreign corporation in good standing in the State
of Michigan, which such counsel has been informed by the Company is the only
State in which the Company is qualified to do business as a foreign corporation.
The Company is the sole record owner and, to such counsel's knowledge, the sole
beneficial owner of all of the outstanding capital stock of R.J. Tower
Corporation, a Michigan corporation, which is the sole record owner and, to such
counsel's knowledge, the sole beneficial owner of all of the outstanding capital
stock of each of the other subsidiaries of the Company executing this Agreement
(the "Subsidiaries").

2. Each of the Subsidiaries is a corporation existing and in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority required to carry on its business as, to such
counsel's knowledge, it is currently being conducted and to own, lease and
operate its properties as described in the Prospectus; each Subsidiary is duly
qualified to transact business and is in good standing as a foreign corporation
in the States listed on an exhibit to such opinion, which such counsel has been
informed by the Company are the only States in which such Subsidiaries are
qualified to do business as a foreign corporation.

3. This Agreement has been duly authorized, executed and delivered by the
Company and each of the Subsidiaries.

4. All of the outstanding shares of Common Stock (including the Firm
Shares to be sold by the Selling Stockholders) have been duly authorized and
validly issued and are fully paid and non-assessable.

5. The Firm Shares to be issued and sold by the Company pursuant to this
Agreement have been duly authorized, and when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement, will be
validly issued and will be fully paid and non-assessable and, to such counsel's
knowledge, the issuance of the Firm Shares by the Company is not subject to any
preemptive or similar rights.

6. The execution, delivery and performance of this Agreement by the
Company and the Subsidiaries, the compliance by the Company and the Subsidiaries
with all the provisions hereof and the issuance and sale of the Firm Shares to
be sold by the Company to the Underwriters hereby will not require, to such
counsel's knowledge, any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body, except
such as have been obtained under the Act and the Exchange Act (and except for
such others as may be required under other state securities or Blue Sky laws,
foreign securities laws or the rules or by-laws of the NASD, as to which such
counsel need not express

-27-

<PAGE>

an opinion), and will not conflict with or constitute a breach of any of the
terms or provisions of, or constitute a default under, the Restated Certificate,
the By-laws or the certificates or articles of incorporation or by-laws of the
Subsidiaries, or the agreements or forms of agreements listed on an exhibit
thereto, or, to such counsel's knowledge, violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to the Company
or the Subsidiaries or their properties (except that such counsel need not
express an opinion with respect to federal securities laws or other laws, rules
or regulations relating to misrepresentation or fraud).

7. To such counsel's knowledge, there is no legal or governmental
proceeding pending or overtly threatened against the Company or any Subsidiaries
which is required to be described in the Registration Statement or the
Prospectus and is not so described, or any contract or other document which is
required to be described in the Registration Statement or the Prospectus and is
not so described or is required to be filed as an exhibit to the Registration
Statement and is not so filed.

8. The description of the Common Stock incorporated by reference into the
Registration Statement and the Prospectus is accurate in all material respects
and fairly represents the information required to be shown. The Registration
Statement, as of its effective date, and the Prospectus, as of its date (other
than the financial statements and the notes thereto and the supporting schedules
and other financial [and statistical data] set forth therein, as to which such
counsel need not express an opinion), appeared on their face to be appropriately
responsive in all material respects with the requirements of the Act and the
applicable rules and regulations thereunder.

9. The Commission has advised the Company that the Registration Statement
has become effective under the Act and, to such counsel's knowledge, no stop
order suspending its effectiveness has been issued and no proceedings for that
purpose are pending or overtly threatened by the Commission.

Such counsel shall also advise that they have met with and
participated in conferences with your representatives, your counsel,
representatives of the Company and representatives of the independent
accountants for the Company during which the contents of the Registration
Statement and the Prospectus and related matters were discussed. In addition,
such counsel shall confirm that they have reviewed certain corporate documents
furnished to them by the Company.

Based on such counsel's participation in the above-mentioned
conferences, the review of the documents described above, such counsel's
understanding of applicable law and the experience gained in their practice
thereunder, such counsel shall advise you that nothing has come to their
attention that caused them to believe that the Registration Statement (other
than the financial statements and the notes thereto and the supporting schedules
and other financial [and statistical data] set forth therein, as to which no
advice is given), as of its effective date, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus (other than the financial statements and the notes thereto and other
financial [and statistical data]

-28-

<PAGE>

set forth therein, as to which no advice is given), as of its date and the date
hereof, included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

-29-

<PAGE>

ANNEX III
----------

LEGAL OPINION OF SELLING STOCKHOLDERS' COUNSEL

(1) This Agreement has been duly authorized, executed and delivered by
each Selling Stockholder (to which such counsel is opining).

(2) The sale of the Shares to the Underwriters by each Selling Stockholder
(to which such counsel is opining) pursuant to this Agreement, the compliance by
such Selling Stockholder with the provisions of this Agreement and the
consummation by such Selling Stockholder of the other transactions contemplated
in this Agreement do not (i) result in any violation of any provision of the
charter, by-laws or other governing documents applicable to such Selling
Stockholder, (ii) result in any violation by such Selling Stockholder of any
statute, rule or regulation, or any order, judgment or decree known to such
counsel, of any court or governmental agency or body having jurisdiction over
such Selling Stockholder or the property of such Selling Stockholder or (iii)
result in any breach or violation of any agreement or instrument identified on a
schedule to such opinion.

(3) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by such Selling Stockholder of the transactions contemplated by
this Agreement in connection with the sale of the Shares by such Selling
Stockholder (to which such counsel is opining) to be sold hereunder, except for
registration of the Shares under the Act, and as may be required under other
federal and state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.

(4) Upon the purchase of and payment for the Shares by the Underwriters,
and the sale by each Selling Stockholder (to which such counsel is opining) of
the Shares to be sold by it, in accordance with the terms and conditions of this
Agreement, valid title to the Shares, free and clear of all encumbrances, will
be transferred to the Underwriters, assuming that the Underwriters purchase such
Shares in good faith and without notice of any adverse claim.

-30-

<PAGE>

ANNEX IV
---------

LEGAL OPINION OF UNDERWRITERS' COUNSEL

1. The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware.

2. The Firm Shares to be issued and sold by the Company pursuant to this
Agreement have been duly authorized, and when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid, and non-assessable.

3. The Commission advised the Company that the Registration Statement has
become effective under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose are pending before or threatened by the
Commission.

4. The Registration Statement, as of its effective date, and the
Prospectus, as of its date (other than the financial statements and supporting
schedules and other financial information set forth or incorporated by reference
therein, as to which such counsel need not express any opinion), appear on their
face to be appropriately responsive in all material respects to the requirements
of the Act and the applicable rules and regulations thereunder.

5. The Shares conform in all material respects to the description thereof
incorporated by reference in the Registration Statement and the Prospectus.

6. This Agreement has been duly authorized, executed and delivered by the
Company.

Such counsel shall also advise that during the preparation of the
Registration Statement and the Prospectus, they examined various documents and
participated in conferences with representatives of the Underwriters, and with
representatives of the Company, its counsel and its independent public
accountants, at which conferences the contents of the Registration Statement and
Prospectus and related matters were discussed. On the basis of such examination
and conferences, but without independent verification of factual matters, such
counsel shall advise that nothing has come to their attention that causes them
to believe that the Registration Statement (other than the financial statements
and supporting schedules and other financial information set forth or
incorporated by reference therein, as to which such counsel need not express any
belief) at the time it became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements contained therein not misleading,
or that the Prospectus (other than the financial statements and supporting
schedules and other financial information set forth or incorporated by reference
therein, as to which such counsel need not express any belief) on its issue date
or the date of such opinion contained or contains an untrue statement of a
material fact or omitted or

-31-

<PAGE>

omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

-32-

<PAGE>

BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
BANCAMERICA SECURITIES, INC.
231 South LaSalle Street
Chicago, Illinois 60697

March 24, 1997

R. J. TOWER CORPORATION
4508 IDS Center
Minneapolis, Minnesota 55402

Attention: Mr. Scott D. Rued
Vice President-Corporate Development

RE: SENIOR BANK FACILITIES

Dear Scott:

Please refer to (i) the letter agreement dated January 24, 1997 from Bank of
America National Trust and Savings Association ("BofA") and BancAmerica
Securities, Inc. ("BASI") to R. J. Tower Corporation ("Tower"), in which BofA
confirmed its commitment to provide to Tower up to $865 million of senior
secured bank facilities (the "Secured Bank Facilities"), to be arranged by BASI
(the "Financing Letter"), and (ii) the letter agreement dated January 24, 1997
from BofA and BASI to Tower, which set forth the fees payable to BofA and BASI
in connection with the Secured Bank Facilities (the "Fee Letter"). Capitalized
terms not defined herein shall have the meanings set forth in the Financing
Letter.

It is hereby agreed that in the event that Tower Automotive, Inc., the direct
corporate parent of Tower, receives at least $250 million in gross proceeds from
the public offering of its Common Stock, par value $.01 per share, pursuant to
its Registration Statement on Form S-3, File No. 333-21943, filed with the
Securities and Exchange Commission, prior to the consummation of the
Transactions, the Financing Letter shall be amended as follows:

1. In lieu of the Bank Facilities, BofA shall provide up to $750 million
in a six-year, senior reducing revolving credit facility (the
"Offering Facility"), certain of the terms and conditions of which are
set forth in the Summary of Terms and Conditions attached hereto as
Annex A (the "Offering Facility Term Sheet");

2. The text under the heading "Sources and Uses of Funds" shall be
disregarded; and

<PAGE>

R. J. TOWER CORPORATION
March 24, 1997

3. References to the "Bank Facilities" and the "Bank Facilities Term
Sheet" shall be deemed to refer to the Offering Facility and the
Offering Facility Term Sheet, respectively.

Except as amended above, the Financing Letter shall remain in full force and
effect.

References in the Fee Letter to the "Financing Letter" shall be deemed to refer
to the Financing Letter as amended hereby.

If you are in agreement with the foregoing, please sign and return the enclosed
copy of this letter to us. This letter may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

Very truly yours,

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION

By: /s/ David F. McLeese
----------------------------

Name: David F. McLeese

Title: Vice President

BANCAMERICA SECURITIES, INC.

By: /s/ Thomas M. Brown
---------------------------

Name: Thomas M. Brow

Title: Vice President

Agreed to and accepted:

R. J. TOWER CORPORATION

By: /s/ Scott D. Rued
--------------------------
Name: Scott D. Rued
--------------------------
Title: Vice President
---------------------
<PAGE>

R.J. TOWER CORPORATION CONFIDENTIAL
- --------------------------------------------------------------------------------

SUMMARY OF TERMS AND CONDITIONS

R.J. TOWER CORPORATION
$750,000,000 SENIOR REDUCING REVOLVING CREDIT FACILITY

MARCH 24, 1997

CO-BORROWERS: R.J. Tower Corporation, a Michigan corporation ("Tower"
or the "Borrower"), and with respect to certain standby
letters of credit, its wholly-owned subsidiaries, R.J.
Tower Corporation, a Kentucky corporation, and R.J.
Tower Corporation, an Indiana corporation.

GUARANTORS: Borrower's parent, Tower Automotive, Inc. ("Tower
Automotive') and all domestic subsidiaries of Borrower,
now existing or hereafter acquired or established.

PURPOSE: To finance the acquisition of the automotive business
of A.O. Smith ("APC"), refinance existing indebtedness,
provide for working capital, capital expenditures and
other general corporate purposes.

ARRANGER: BancAmerica Securities, Inc.

AGENT: Bank of America NT&SA ("Bank of America" or the
"Agent").

LENDERS: Syndicate of banks acceptable to Tower and the
Arranger.

FACILITY
DESCRIPTION AND AMOUNT: Up to $750,000,000 in a senior reducing revolving
credit facility (the "Revolver" or "Facility") maturing
6 years from the execution of definitive loan
documentation ("Closing"). The Facility will include a
to be determined letter of credit subfacility.

BORROWING OPTIONS: Eurodollar Loans and Base Rate Loans.

SWING-LINE: The Borrower shall have the ability to borrow, on a
direct basis through the Agent up to $25,000,000, under
a Swing-Line to be funded by the Agent and risk
participated by all Lenders.

INTEREST PERIODS: 1, 2, 3, and 6 months.

INTEREST PAYMENTS: Accrued interest on each Base Rate Loan shall be
payable quarterly.

Accrued interest on each Eurodollar Loan shall be
payable at maturity of the Interest Period or
quarterly, if earlier.
- --------------------------------------------------------------------------------

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<PAGE>

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

INTEREST RATES AND
LETTER OF CREDIT
FEES: Base Rate Loans will bear interest at the Base Rate,
while Eurodollar Loans will bear interest at the
Eurodollar Rate plus 30.0 basis points at Closing,
after which Eurodollar margins will be determined by
the attached pricing grid.

BASE RATE is defined as the higher of (i) the rate
of interest publicly announced from time to time
by the Agent as its Reference Rate and (ii) 0.5%
per annum above the Federal Funds Rate in effect
on such date. Any change in the Reference Rate
shall take effect at the opening of business on
the date specified in the public announcement of
such change, or on a daily basis in the case of
(ii) above. Accrued interest on each Base Rate
Loan shall be calculated on a 360-day year and
actual days elapsed and is to be payable quarterly
in arrears.

EURODOLLAR RATE is defined as the rate of interest
per annum at which dollar deposits in the
approximate amount of the Agent's Offshore Rate
Loan for such Interest Period would be offered by
the Agent's Grand Cayman Branch, Grand Cayman,
B.W.I. (or such other office as may be designated
for such purpose by the Agent), to major banks in
the offshore dollar interbank market upon request
of such banks at approximately 11:00 a.m. (New
York City time) two Business Days prior to the
commencement of such Interest Period. Interest is
to accrue based on a 360-day year and actual days
elapsed and is to be paid in arrears.

Standby Letter of Credit Fees will be 30.0 basis points
at Closing, after which Standby Letter of Credit Fees
will also be determined by the attached pricing grid.

FACILITY FEE: A per annum fee of 15.00 basis points at Closing, after
which the Facility Fee will be based on the attached
pricing grid. The Facility Fee will be calculated on a
360 day basis on each Lender's commitment regardless of
usage, payable quarterly in arrears. See attached
pricing grid.

DRAWDOWNS: Minimum amounts of $1,000,000 with additional
increments of $100,000 for Base Rate Loans and
$2,000,000 with additional increments of $100,000 for
Eurodollar Loans. Drawdowns are at the Borrower's
option with (i) one day notice for Base Rate Loans, and
(ii) three business days advance notice (by 10:00 a.m.
Chicago time) for dollar Eurodollar Loans.

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

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<PAGE>

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

MANDATORY REDUCTIONS
IN FACILITY: On each anniversary of the Closing set forth, the Total
Commitment Amount shall be automatically and
permanently reduced to the respective maximum as set
forth below:

ANNIVERSARY OF CLOSING MAXIMUM FACILITY AMOUNT
---------------------- -----------------------
Third $675,000,000
Fourth $600,000,000
Fifth $500,000,000

VOLUNTARY PREPAYMENTS: Base Rate Loans may be prepaid at any time with same
day notice. Eurodollar Loans may be prepaid at any time
with at least three business days advance notice,
subject to compensating the Lenders for any funding
losses and related expenses. Each partial prepayment
of Eurodollar Loans shall be in an aggregate principal
dollar amount of at least $1,000,000 and an integral
multiple of $100,000 and a minimum amount of $500,000
for Base Rate Loans.

TERMINATION OR
REDUCTION OF THE
FACILITY: The Borrower may irrevocably reduce the Facility in
amounts of at least $5,000,000 or a larger integral
multiple of $1,000,000, at any time on three business
days' notice.

REPRESENTATIONS
AND WARRANTIES: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:

-Corporate existence and power.
-Corporate authorization; no contravention.
-Governmental authorization.
-Binding effect.
-Litigation.
-No default.
-ERISA compliance.
-Use of proceeds; margin regulations.
-Title to properties.
-Taxes.
-Financial condition, including material adverse
change.
-Environmental matters.
-Regulated entities.
-No burdensome restrictions.
-Copyrights, trademarks, patents and licenses,
etc.
-Subsidiaries.
-Insurance.

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

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<PAGE>

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

-Solvency.
-Full disclosure.

CONDITIONS OF
EFFECTIVENESS: Usual and customary for a credit agreement of thistype
and for a borrower of Tower's size, industry and credit
quality, including but not limited to:

-Receipt of satisfactory closing documentation
including executed guarantees and opinions of
counsel.
-Corporate authorizations.
-All representations and warranties are true and
complete in all material respects.
-Cancellation of Tower's existing bank credit
facility.
-Acquisition of APC for an amount not to exceed
$650 million on terms and conditions acceptable to
the Lenders.
-Receipt by Tower's parent of at least $250
million in gross proceeds from the sale of its
common stock.

CONDITIONS OF
EACH BORROWING: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:

-Absence of default or event of default.
-Accuracy of representations and warranties.

AFFIRMATIVE
COVENANTS: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:

-Financial statements.
-Certificates; other information.
-Notices.
-Preservation of corporate existence, etc.
-Maintenance of property.
-Insurance.
-Payment of obligations.
-Compliance with laws, including ERISA.
-Inspection of property and books and records.
-Environmental laws.
-Use of proceeds.
-Further assurances.

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

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<PAGE>

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

NEGATIVE COVENANTS: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:

-Limitation on liens.
-Disposition of assets.
-Consolidations and mergers.
-Loans and investments.
-Limitation on indebtedness.
-Transactions with affiliates.
-Use of proceeds.
-Contingent obligations.
-Joint ventures.
-Lease obligations.
-Restricted payments.
-ERISA.
-Change in business.
-Account changes.
-Financial condition.

FINANCIAL COVENANTS: Would include the following:

(i) MAXIMUM CONSOLIDATED TOTAL INDEBTEDNESS /
CAPITALIZATION. Not permit Tower Automotive's
ratio of Consolidated Total Indebtedness to
Capitalization (defined as Consolidated Total
Indebtedness plus Shareholders' Equity) to be
greater than 65%, reducing to 60% on 12/31/98, 55%
on 12/31/99, and 50% on 12/31/00. The definition
of Consolidated Total Indebtedness will include
all funded indebtedness including both short-term
and long-term debt (including capital leases) and
guarantees of indebtedness (so long as such
amounts are not already included).

(ii) MAXIMUM CONSOLIDATED TOTAL INDEBTEDNESS TO EBITDA.
Not permit Tower Automotive's ratio of
Consolidated Total Indebtedness to EBITDA, as
measured quarterly, with EBITDA calculated on a
rolling four quarter basis, to exceed 3.50:1.00,
reducing to 3.25:1.00 on 12/31/99 and 3.00:1.00 on
12/31/00.

(iii) MINIMUM INTEREST COVERAGE. Not permit Tower
Automotive's ratio of consolidated net earnings,
before interest, and taxes to interest ("EBIT/I"),
as calculated on a rolling four quarter basis, to
fall below 2.50:1.00, increasing to 2.75:1.00 on
12/31/99 and 3.00:1.00 on 12/31/00.

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

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<PAGE>

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

EVENTS OF DEFAULT: Usual and customary for a credit agreement of this
type and for a borrower of Tower's size, industry and
credit quality, including but not limited to:

-Failure to pay interest, principal or fees
payable under the Credit Agreement.
-Failure to meet covenants, subject to applicable
grace periods.
-Materially inaccurate or false representations or
warranties.
-Cross default to other debt of the Borrower, its
parent and its subsidiaries.
-Change of control or ownership.
-Guarantor defaults.
-Other usual defaults with respect to the
Borrower, including but not limited to insolvency,
bankruptcy, judgments and ERISA.

INCREASED COSTS/
CHANGE OF
CIRCUMSTANCES: The Credit Agreement will contain customary
provisions protecting the Lenders in the event of
unavailability of funding, increased costs and
funding losses. Capital adequacy protection will be
provided for regulatory changes adopted after the
date of the Credit Agreement. The Credit Agreement
will also provide for the general indemnification of
the Agent, Arranger, and their affiliates, as well as
the Lenders (and their respective assignees and/or
participants) by the Borrower.

TRANSFERS AND
PARTICIPATIONS: Each Lender will have the right to transfer or sell
participations in its Loans. Assignments to financial
institutions meeting the criteria of an eligible
assignee (to be defined), in minimum amounts of
$10,000,000, will be permitted with the consent of the
Borrower and the Agent and payment by assignor or
assignee of a processing fee.

EXPENSES: Costs and expenses, including reasonable attorney's
fees (including costs and expenses of outside counsel
and allocated cost of in-house legal services),
incurred at any time by the Agent and the Arranger in
the negotiation, syndication, documentation and closing
shall be paid by the Borrower, regardless of whether
the Facility closes. The Borrower shall pay all costs
and expenses, including legal costs, incurred by the
Agent in connection with any amendment, waiver or
modification to the Facility requested by the Borrower.
The Borrower shall pay all reasonable costs and
- --------------------------------------------------------------------------------

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<PAGE>

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

expenses, including legal costs, incurred by the Agent
and any Lender in enforcing any loan document.

REQUIRED BANKS: Lenders having more than 50% of the commitments, or
after termination of commitments, more than 50% of
outstanding loans.

DOCUMENTATION: The Facility will be subject to a credit agreement
("the Credit Agreement") and other documentation, which
shall contain suitable conditions and covenants
mutually acceptable to the Borrower, the Agent and the
Lenders, but not limited to those described above.

GOVERNING LAW
AND JURISDICTION: State of New York.

THIS SUMMARY OF TERMS AND CONDITIONS (THE "TERM SHEET") IS NOT MEANT TO BE, NOR
SHALL IT BE CONSTRUED AS, AN ATTEMPT TO DESCRIBE ALL THE TERMS AND CONDITIONS
THAT WOULD PERTAIN TO THE FACILITY, NOR DO ITS TERMS SUGGEST THE SPECIFIC
PHRASING OF DOCUMENTATION CLAUSES. INSTEAD, IT IS INTENDED TO OUTLINE CERTAIN
BASIC POINTS OF BUSINESS UNDERSTANDING AROUND WHICH THE FACILITY COULD BE
STRUCTURED AND IS SUBJECT TO REVIEW OF LEGAL AND TAX ISSUES.

[LOGO] Page 7 March 11, 1997

<PAGE>

PRICING GRID
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

R.J. TOWER CORPORATION
$750,000,000
SIX-YEAR SENIOR REDUCING REVOLVING CREDIT FACILITY
(IN BASIS POINTS)

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LEVEL I LEVEL II LEVEL III
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Debt / Capitalization Less than 20% Greater than or Greater than or
equal to 20% but equal to 30% but
less than 30% less than 40%
- -----------------------------------------------------------------------------------
Eurodollar Rate Margin 17.00 20.00 25.00
and Letter of Credit Fees
- -----------------------------------------------------------------------------------
Facility Fee 8.00 10.00 12.50
- -----------------------------------------------------------------------------------
All-In Drawn 25.00 30.00 37.50
Eurodollar Margin
- -----------------------------------------------------------------------------------
Base Rate Margin 0.00 0.00 0.00

- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LEVEL IV LEVEL V LEVEL VI
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Debt / Capitalization Greater than or Greater than or Greater than or
equal to 40% but equal to 50% but equal to 60%
less than 50% less than 60%
- -----------------------------------------------------------------------------------
Eurodollar Rate Margin 30.00 42.50 50.00
and Letter of Credit Fees
- -----------------------------------------------------------------------------------
Facility Fee 15.00 20.00 25.00
- -----------------------------------------------------------------------------------
All-In Drawn 45.00 62.50 75.00
Eurodollar Margin
- -----------------------------------------------------------------------------------
Base Rate Margin 0.00 0.00 0.00
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
* As measured quarterly.
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------

</TABLE>

[LOGO] Page 8 March 11, 1997

<PAGE>

KIRKLAND & ELLIS
PARTNERSHIPS INCLUDING PROFESSIONAL CORPORATIONS
200 East Randolph Drive
Chicago, Illinois 60601

To Call Writer Direct: 312 861-2000 Facsimile:
312 861-2000 312 861-2200

April 8, 1997

Tower Automotive, Inc.
4508 IDS Center
Minneapolis, Minnesota 55402

Ladies and Gentlemen:

We are acting as special counsel to Tower Automotive, Inc., a
Delaware corporation (the "Company"), in connection with the proposed
registration by the Company of: (i) 10,013,500 shares of its Common Stock,
par value $.01 per share (the "Common Stock"), including 1,513,500 shares of
its Common Stock to cover over-allotments, if any (collectively, the "Primary
Shares") for sale by the Company and (ii) 1,590,000 shares of Common Stock to
be sold by certain Selling Stockholders (the "Secondary Shares" and, together
with the Primary Shares, the "Shares"), pursuant to a Registration Statement
on Form S-3 (Registration No.333-21943), originally filed with the Securities
and Exchange Commission (the "Commission") on February 18, 1997 under the
Securities Act of 1933, as amended (the "Act") (such Registration Statement,
as amended or supplemented, is hereinafter referred to as the "Registration
Statement"). The Shares to be offered by the Company are to be sold pursuant
to an Underwriting Agreement (the "Underwriting Agreement"), by and among the
Company, Donaldson, Lufkin & Jenrette Securities Corporation, PaineWebber
Incorporated, Robert W. Baird & Co. Incorporated, Morgan Stanley & Co.
Incorporated and Piper Jaffray Inc.

For purposes of this opinion, we have assumed the authenticity of
all documents submitted to us as originals, the conformity to the originals
of all documents submitted to us as copies and the authenticity of the
originals of all documents submitted to us as copies. We have also assumed
the legal

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April 8, 1997
Page 2

capacity of all natural persons, the genuineness of the signatures of persons
signing all documents in connection with which this opinion is rendered, the
authority of such persons signing on behalf of the parties thereto other than
the Company and the due authorization, execution and delivery of all documents
by the parties thereto other than the Company. As to any facts material to the
opinions expressed herein, we have relied upon the statements and
representations of officers and other representatives of the Company and
others.

Our opinion expressed below is subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of
(i) any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), (iii)
public policy considerations which may limit the rights of parties to obtain
certain remedies and (iv) any laws except the internal laws of the State of
Illinois, the General Corporation law of the State of Delaware and the federal
law of the United States of America.

Based upon and subject to the foregoing qualifications, assumptions
and limitations and the further limitations set forth below, we hereby advise
you that in our opinion:

1. The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware.

2. The Primary Shares have been duly authorized, and, when
(i) the Registration Statement becomes effective under the Act, (ii) the
Board of Directors of the Company has taken all necessary action to approve
the issuance

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April 8, 1997
Page 3

and sale of the Primary Shares and (iii) the Shares have been duly executed
and delivered on behalf of the Company and issued in accordance with the
terms of the Underwriting Agreement upon receipt of the consideration to be
paid therefor, will be validly issued, fully paid and nonassessable.

3. The Secondary Shares have been duly authorized and are
validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion with the Commission
as Exhibit 5.1 to the Registration Statement. We also consent to the
reference to our firm under the heading "Legal Matters" in the Registration
Statement. In giving this consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission. This opinion and consent may be
incorporated by reference in a subsequent registration statement on Form S-3
filed pursuant to Rule 462(b) under the Act with respect to the registration
of additional securities for sale in the offering contemplated by the
Registration Statement.

We do not find it necessary for the purposes of this opinion, and
accordingly we do not purport to cover herein, the application of the
securities or "Blue Sky" laws of the various states to the issuance and sale
of the Shares.

This opinion is limited to the specific issues addressed herein,
and no opinion may be inferred to implied beyond that expressly stated
therein. We assume no obligation to revise or supplement this opinion should
the present laws of the States of Illinois or Delaware or the federal law of
the United States be changed by legislative action, judicial decision or
otherwise.

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April 8, 1997
Page 4

This opinion is furnished to you pursuant to Item 601(b)(5) of
Regulation S-K promulgated under the Act and may be relied upon as
contemplated thereby.

Very truly yours,

KIRKLAND & ELLIS

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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota
April 10, 1997