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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                                   FORM 10-K
 
[X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
                    FOR THE FISCAL YEAR ENDED JULY 31, 1996
 
                                      OR
[_]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                            SECURITIES ACT OF 1934
 
                        COMMISSION FILE NUMBER 0-22906
 
                         ABC RAIL PRODUCTS CORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
               DELAWARE                              36-3498749
    (STATE OR OTHER JURISDICTION OF        (I.R.S. EMPLOYER IDENTIFICATION
            INCORPORATION)                             NUMBER)
 
                           200 SOUTH MICHIGAN AVENUE
                                  SUITE 1300
                            CHICAGO, ILLINOIS 60604
                                (312) 322-0360
         (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
 
                                     None
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
 
                         Common Stock, $.01 par value
                               (Title of class)
 
  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]
 
  Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
 
  The aggregate market value of the registrant's common stock, $.01 par value,
held by nonaffiliates of the registrant as of September 30, 1996 was
$159,942,438.
 
  The number of shares of the registrant's common stock, $.01 par value,
outstanding as of September 30, 1996 was 8,271,026.
 
                     DOCUMENTS INCORPORATED BY REFERENCE:
 
  Certain sections or portions of the registrant's 1996 Annual Report to
Stockholders and of the registrant's proxy statement for the annual meeting of
stockholders to be held on November 15, 1996, described in Parts II, III, and
IV hereof are incorporated by reference in this report.
 
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                                    PART I
 
ITEM 1--BUSINESS
 
GENERAL
 
  ABC Rail Products Corporation (the "Company") is a leader in the
engineering, manufacturing and marketing of replacement products and original
equipment for the freight railroad and rail transit industries. The Company's
products include specialty trackwork, such as rail crossings, switches;
mechanical products, such as railcar, locomotive and idler wheels, mounted
wheel sets and brake shoes; and classification yard products and automation
systems. The Company continues to operate in the composite brake shoe market
through a joint venture. See "Strategic Joint Ventures, Alliances and
Acquisitions."
 
  The Company's business began in 1902 as the American Brake Shoe and Foundry
Company. In 1987, the Company was formed by management as a Delaware
corporation to acquire substantially all of the assets and certain related
liabilities of the Railroad Products Group of Abex Corporation ("Abex"), which
was then a subsidiary of IC Industries, now Whitman Corporation. In August
1989, then current management effected a leveraged recapitalization of the
Company pursuant to which dividends and special payments of approximately $20
million were paid to its stockholders. In 1991, an affiliate of Kohlberg & Co.
("Kohlberg") acquired control of the Company through the purchase of certain
stockholder interests and newly-issued common stock of the Company. In 1995,
Kohlberg sold its entire interest in the common stock of the Company.
 
  Leading Freight Railroad Market Shares. The Company has a substantial share
of all of the specialty trackwork and mechanical products markets it serves.
Based upon industry information and information gathered from its customers,
the Company believes that it has an approximately 50% share of the North
American freight specialty trackwork market, more than twice that of its next
largest competitor.
 
  Integrated Manufacturing and Engineering Capability. The Company is the only
vertically integrated specialty trackwork manufacturer in North America. It
designs, engineers and manufactures in-house a full line of specialty
trackwork products, including rail transit specialty trackwork based on
technology provided through the Company's relationship with Cogifer S.A.
("Cogifer"). See "--Cogifer Relationship" for additional information on
Cogifer. The Company maintains six specialty trackwork manufacturing
facilities located in various U.S. geographical areas. Certain specialty
trackwork components that are subject to the most concentrated pressure must
be made of special manganese steel alloys, which harden under the repeated
pressure of passing wheels. The Company is the only U.S. specialty trackwork
manufacturer that operates its own manganese steel foundry for the manufacture
of these key specialty trackwork components. This foundry enables the Company
to maintain strict quality control at all stages of the production process. In
addition, the Company is the only North American specialty trackwork
manufacturer with the in-house ability to design and craft the wooden patterns
used to produce its specialty trackwork component castings. This capability,
together with more than 80 years of specialty trackwork designs contained in
the Company's extensive computer-aided design system, gives the Company a
competitive advantage in responding to freight railroads' needs for customized
products manufactured to rigorous standards. This capability also allows the
Company to adapt to European technologies for high-speed and light rail
applications, derived through its relationship with Cogifer, to serve the
needs of rail transit customers. The Company also designs, engineers and
manufactures in-house its entire line of wheels and brake shoes and, as a
result of the wheel mounting business, reworks and distributes new and used
freight car wheel sets.
 
  Capital Investment. Over the last two fiscal years, the Company implemented
a special capital expenditure program. These expenditures are expected to
reduce costs and increase capacity in the Company's specialty trackwork
operations and to reduce costs and improve efficiencies in its wheel
operations. The special capital expenditure program consists of: the fiscal
1995 completion of a new machining facility at its Calera, Alabama wheel plant
to reduce costs and improve efficiencies in the production of railroad and
idler wheels; the purchases of new process equipment for its other specialty
trackwork facilities to decrease scrap rates and rework costs and ensure
superior product quality; and, in late February 1995, the purchase of a
manufacturing facility in Chicago
 
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Heights, Illinois, which will house the new state-of-the-art equipment that
will support the Company's specialty trackwork initiatives. The Company
expects to continue to finance these and ordinary expenditures primarily out
of free cash flow and secured borrowings.
 
  Expanding Rail Transit Market Presence. The Company is also a supplier of
specialty trackwork to North American rail transit systems, which generally
conform to freight railroad standards. Historically, however, sales of
specialty trackwork to the rail transit industry have accounted for only a
small portion of the Company's specialty trackwork sales. The Company has
recognized a rising demand for rail transit specialty trackwork and has
responded by forming a dedicated rail transit marketing group and aggressively
pursuing rail transit projects throughout North America. Increasingly, North
American transit system authorities are evaluating or employing European-style
high-speed and light rail technology, particularly with respect to proposed
new systems. The Company has access to much of this technology through its
relationship with Cogifer, which the Company believes enhances its ability to
compete in the rail transit market.
 
  Strategic Joint Ventures, Alliances and Acquisitions. The Company
continually explores opportunities to enhance its technology base and
marketing and distribution capabilities. In addition, the Company seeks
acquisitions of complementary product lines, particularly those that offer
potential manufacturing or marketing synergies. On June 21, 1996, the Company 
established a wheel mounting, wheel assembly and trackwork service operation in 
Tacoma, Washington. The Company is currently leasing the operating facility from
its prior operators. On May 31, 1996, the Company acquired Deco Industries Inc.
of Milwaukee, Wisconsin and selected assets of Deco Automation located in
Norristown, Pennsylvania ("Deco"). Deco manufactures railroad classification
yard retarder control and automation systems. In May 1996, the Company announced
a joint venture agreement with China's Ministry of Railroads to establish the
Datong ABC Castings Company Ltd. The joint venture will manufacture wheels in
China primarily for the rapidly growing Chinese railway markets. The Company's
contribution of its 40 percent share in the joint venture will consist of
technical know-how, expertise and cash. The Company's cash infusion of
approximately $9.3 million will be made over the next two to four months, and is
expected to be funded from operations. Through July 31, 1996, $1.6 million had
been contributed to the joint venture. On July 31, 1995, the Company entered
into a 50/50 joint venture with Anchor Brake Shoe Company ("Anchor"). The
purpose of the joint venture is to design, manufacture, market and sell railcar
composite brake shoes. The Company's initial contribution to the joint venture
included the inventory and property, plant and equipment of its composite brake
shoe facility in Chicago, Illinois and certain related accounts receivable and
other current assets aggregating $3.5 million. Anchor contributed its composite
brake shoe facility which, net of a promissory note from the joint venture,
resulted in an initial contribution of $3.5 million. Certain of the assets
contributed to the joint venture by the Company will be sold by the joint
venture. Any difference between the aggregate sales proceeds and the aggregate
contributed value of such assets will be credited to the appropriate partner if
such sale occurs prior to an agreed upon date. Pursuant to a related Commission
Agreement between the Company and the joint venture, the joint venture must pay
the Company a 3% commission on sales of the joint venture that are generated
through the Company. No such commissions were earned in fiscal 1996. In May
1995, the Company acquired from General Electric Railcar Wheel and Parts Service
Corporation ("GE Railcar") substantially all of the assets associated with GE
Railcar's wheel mounting business (the "Wheel Mounting Acquisition"), which is
the largest independent railcar wheel mounting operation in the United States.
The wheel mounting business remanufactures, reworks and distributes new and used
freight car wheel sets through five production facilities located throughout the
United States. The wheel mounting business serves Class I, regional and short-
line railroads, private freight car owners and new freight car builders. The
Company believes that this operation complements the Company's existing wheel
manufacturing business as a result of its similar customer and technology base
and the opportunity for vertical integration between the two operations. In
January 1994, the Company acquired the Newton, Kansas specialty trackwork
manufacturing facility of Atchison, Topeka & Santa Fe Railway Company, a Class I
railroad. Also in January 1994, the Company and Cogifer, through a joint
venture, acquired a specialty trackwork manufacturing facility in Cincinnati,
Ohio. See "--Cogifer Relationship" for additional information on Cogifer. The
Company's relationships with Cogifer strengthen the Company's ability to
engineer and market products which employ sophisticated European-style high-
speed and light rail technology. The Company's 1988 acquisition of the Standard
Brake Shoe and Foundry Company left the Company as the sole U.S. manufacturer of
metal brake shoes and allowed the Company to realize substantial manufacturing
cost reductions. Since the Company is a
 
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manufacturer of both specialty trackwork and mechanical products, it has
greater access to railroads' engineering and purchasing departments than
companies that offer only a single product line. The Company therefore is
positioned to effectively market additional products if it were to acquire or
develop new product lines. Because the railroad supply industry is highly
fragmented, with many private companies manufacturing only single product lines
and railroads exiting the component manufacturing business, the Company
believes that a variety of acquisition opportunities exist.
 
PRODUCTS
 
 Specialty Trackwork.
 
  The Company manufactures specialty trackwork to customer specifications,
generally for replacement of existing track, in the case of freight railroads,
or for replacement and new construction of rail transit systems. The Company's
products include track switches or turnouts, which divert a train from one
track to another; crossings, which allow one set of railroad tracks to cross
through another; switch throws, which set a track switch in order to divert a
train from one track to another; and other trackwork products including guard
rails and rail lubricators. The Company also manufactures cast manganese steel
trackwork components which are sold as part of a track switch assembly or as
replacement parts. Typically, track switches serve to divert trains between two
tracks, but the Company also designs and manufactures more complicated track
switches serving three, four or even more route diversions to meet switching
requirements in areas of high density traffic, such as urban freight yards,
passenger terminals and high traffic industrial and port areas. For fiscal
1996, 1995 and 1994, sales of specialty trackwork products accounted for
approximately 49%, 57% and 54%, respectively, of the Company's net sales.
 
  In May 1996, the Company commenced activity with its classification yard
products and automation systems acquired from Deco.
 
 Mechanical Products.
 
  Railcar, Locomotive and Idler Wheels and Wheel Sets. The Company manufactures
28, 33, 36 and 38-inch diameter wheels for freight railcars and 40-inch
diameter wheels for diesel locomotives. These wheels are made of cast steel.
Within a particular size classification, variations exist in flange width and
bore size. The railroad industry generally considers wheels as "stock" items
for their common sizes and variations. In addition to producing railroad
wheels, the Company has been the sole-source manufacturer of cast idler wheels
for Caterpillar Inc.'s high-drive tracked equipment since 1988. Idler wheels
are secondary wheels, not connected to the equipment's power train, which guide
the treads on such tracked construction equipment as bulldozers and backhoes.
In May 1995 the Company commenced its wheel mounting and assembly operations as
a result of the Wheel Mounting Acquisition. The wheel mounting operation, which
is primarily a reconditioning service business, remanufactures, reworks and
distributes new and used freight car wheel sets. Freight car wheel sets consist
of the wheel, axle and bearing units that are mounted to freight cars. The
Company's reconditioning services include inspection and analysis of existing
wheel sets to determine necessary replacement parts, remachining of axle units,
replacement and/or remachining of wheels, and replacement and/or reinstallation
of bearings. The Company also supplies new wheel sets using new and/or
remachined parts of components. For fiscal 1996, 1995 and 1994, sales of
railcar, locomotive and idler wheels and wheel sets accounted for approximately
46%, 32% and 36%, respectively, of the Company's net sales.
 
  Composition and Metal Brake Shoes. Composition and metal brake shoes bear
directly on the railroad wheel and exert friction to generate braking power. As
a result, the brake shoe and the railroad wheel, while at different rates, are
worn simultaneously. Worn brake shoes are replaced during routine maintenance
or at inspection sites located at various areas along the railroad. Composition
brake shoes are made from fibers, elastomers and various resins and provide a
higher level of friction for use with modern, low-pressure braking systems;
metal brake
 
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shoes are made from cast iron. Composition and metal brake shoes are not
interchangeable. For certain applications, the composition shoe is superior for
braking and reducing heat buildup. Pursuant to American Association of
Railroads ("AAR") regulations, all new railcars and locomotives that will
operate across different railroads must have composition brake shoe systems.
Older railcars and locomotives with higher pressure braking systems require
metal brake shoes. Metal brake shoes also are preferable to composition brake
shoes in winter weather because they provide more effective braking in ice and
snow. Although the demand for metal brake shoes is expected to decline over
time as older railcars are phased out of railroads' fleets, they will continue
to be in demand on certain trains that do not operate in interchange. For
fiscal 1996, 1995 and 1994, sales of brake shoes accounted for approximately
5%, 7% and 10% of the Company's net sales, respectively. Effective July 31,
1995, the Company contributed its composition brake shoe operation into the
joint venture between the Company and Anchor. See "--Strategic Joint Ventures,
Alliances and Acquisitions."
 
INDUSTRY STANDARDS
 
  Specialty trackwork products must conform to AREA specifications in order to
be used in the North American freight railroad system. The specifications are
complex and their application on different railroads is further specified by
each railroad's maintenance-of-way engineering practices. Given these
specifications, the Company believes considerable proprietary expertise and
information are required to manufacture these products economically.
 
  The AAR interchange rules govern all matters related to railcars which
operate among different railroads (i.e., interchange). Among other things, the
interchange rules define all significant physical and dimensional elements of
interchange service railcars and their key components, including wheels and
brake shoes. The rules also require regular quality reviews and certification
of facilities used to manufacture railcars and key railcar components.
 
  The interchange and related rules also specify financial matters related to
interchange operations, including brake shoe replacement pricing. As
locomotives and railcars move across different railroads, brake shoes (rapid
wear components) often need to be replaced. Under the interchange rules, the
railroad moving the railcar at the time must replace the worn brake shoe and
the amount that can be charged to the owner of the railcar is fixed. Therefore,
the replacing railroad will use the least expensive replacement brake shoe
available that complies with the interchange rules, which tends to limit
increases in composition brake shoe prices.
 
COGIFER RELATIONSHIP
 
  North American specialty trackwork producers historically have concentrated
on the requirements of freight customers and have tended to meet rail transit
system customer needs with adaptations of freight specialty trackwork
technology. Transit customers are increasingly evaluating and employing
products specifically designed to provide smooth, quiet service on high-speed
and light rail systems.
 
  Recognizing the importance of the growing demand for European-style high-
speed and light rail technology, in February 1992 the Company formed a long-
term relationship with Cogifer. Cogifer is the leading supplier of European-
style high-speed and light rail specialty trackwork to the world market,
including specialty trackwork for the high speed TGV (Train a Grande Vitesse)
trains in France and other parts of Europe. This relationship includes separate
agreements relating to certain existing and contemplated joint ventures in
North America, technology exchange and selected worldwide joint venture
marketing efforts.
 
  ABC Rail-Cogifer Technologies is a 50-50 joint venture partnership of the
Company and Cogifer created by a partnership agreement that expires in February
2022 unless earlier terminated by the executive committee of the partnership,
by the sale of all or substantially all of the partnership's assets or by the
termination of the technology exchange agreement. The partnership's purpose is
to market, design, engineer and supply European-style high-speed and light rail
technology to the North American market. The marketing activities of the
 
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Company and the partnership are coordinated by the Company. Production is
subcontracted to the most suitable joint venture partner.
 
  The technology exchange agreement provides the Company access to Cogifer's
design concepts, expertise and information which can be applied by the Company
to the potentially large intercity "Amtrak-type" rail passenger market, the
small but developing market for high-speed freight railroad switches, and the
North American manufacturing of certain elements of European-style high-speed
and light rail specialty trackwork. Cogifer has similar access to the Company's
technology for use outside North America and other defined markets. Certain of
these exchanges may have a 2% royalty in those situations in which the
executive committee of the partnership determines that a partner has
contributed significant value. To date, no such royalty has been paid to either
party.
 
  The Company and Cogifer also have entered into a joint marketing agreement
appointing Cogifer as the Company's exclusive worldwide representative for the
sale of the Company's products, excluding sales in the U.S., Canada, Mexico and
certain other countries.
 
  In December 1993, the Company formed another 50-50 joint venture partnership,
ABC Rail-Cogifer Technologies (Industrial Division) ("ABC Rail-Cogifer
Industrial") with Cogifer. The partnership was to expire in December 2023
unless earlier terminated by a sale of substantially all of the partnership's
assets or by the executive committee. Effective May 31, 1996, the Company
purchased Cogifer's interest in the joint venture partnership. The former joint
venture plant's new role within the Company will be redirected towards track
products remanufacturing.
 
SALES AND MARKETING
 
  The Company sells directly to the majority of its customers through its own
sales force, which is organized into two groups that focus either on specialty
trackwork products or mechanical products. The Company's specialty trackwork
sales force covers the U.S. and Canada on a regional basis. The Company
supplements its specialty trackwork sales efforts with the technical support of
its engineering staff, which advises on product design and cost estimation. The
Company's mechanical products sales force covers the U.S., Canada and Mexico.
Certain members of the Company's senior management also actively participate in
marketing efforts. The Company believes that these senior executives have
developed close relationships with the purchasing managers and senior
management of many of the Company's principal customers. The Company and
Cogifer maintain a separate marketing staff which targets sales to rail transit
systems in North America. The Company markets through sales representatives to
its smaller customers, such as short lines, industrial and mining market
segments.
 
  The Company also markets its products internationally both directly and
through sales agents. A number of other countries have extensive freight
railroad systems patterned on AAR and AREA standards. Consequently, the
Company's products are either already suited, or are readily adaptable, to the
needs of customers in these markets. In addition, Cogifer is the Company's
exclusive representative for the purpose of selling specialty trackwork, wheels
and brake shoes in most overseas markets. The Company is also presently
exploring additional overseas sales and marketing opportunities. International
sales, however, represented a small portion of the Company's net sales during
fiscal 1996.
 
CUSTOMERS
 
  The Company's principal specialty trackwork customers are the North American
Class I railroads, although the Company also sells specialty trackwork to a
number of regional and short-line railroads as well as rail transit systems.
The Company's wheel and wheel mounting customers include the Class I railroads,
regional and short-line railroads, railcar and locomotive manufacturers and
railroad service companies. The Company's metal brake shoe customers include
railroads, rail transit systems and manufacturers of railcar and locomotive
braking systems. The Company's three largest customers are Atchison, Topeka and
Santa Fe Railway, Burlington
 
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Northern Railroad Company (recently merged as the Burlington Northern Santa Fe)
and Union Pacific Corporation (recently merged with Southern Pacific Railway),
which accounted for approximately 12%, 15% and 11%, respectively, of the
Company's net sales for fiscal 1996. No other customer accounted for more than
10% of fiscal 1996 net sales. In fiscal 1994, the Company entered into multi-
year agreements with Burlington Northern Railroad Company and Union Pacific
Corporation for the supply of specialty trackwork products. The Company's five
largest customers accounted for approximately 47% of the Company's net sales
during fiscal 1996.
 
MANUFACTURING
 
  In the manufacture of specialty trackwork, rail and various other steel
products purchased from outside suppliers are fabricated and bolted or welded
to cast manganese steel components in accordance with precise design standards.
Primary finished products are complete or component parts of switches and
crossings. These products are fabricated and packaged at the plant, then
shipped by rail or truck to the job site where the end user or contractor
assembles and installs them in the right-of-way. Increasingly, the Company
assembles switches and crossings at its plants and ships them in "panelized"
form to the job site where they are installed, thereby saving the track owners
the labor cost of assembling the product on site. Manufacturing operations at
the specialty trackwork plants include casting manganese steel, forging,
shearing, sawing, drilling, bending, machining and assembly. Certain cast
manganese components are subjected to an explosion hardening process which
increases their useful life.
 
  The cast steel wheel manufacturing process consists of the following steps.
Various grades of steel scrap are melted in electric furnaces and mixed with
certain alloys. Several chemical analyses are performed on each heat to insure
compliance with AAR specifications before the furnace is tapped. The metal is
poured into a graphite mold that has been machined for a specific wheel design.
The metal solidifies in the mold for a period of time depending on the wheel
size and weight. The wheel is then removed from the mold and placed in a
controlled cooling chamber. In accordance with AAR specifications, the wheel
surfaces are cleaned, heat treated, quenched and tempered. In the last steps of
the process, the wheel's critical surfaces are machined and inspected using
non-destructive ultrasonic and radiographic techniques as well as standard
gauging methods.
 
  The metal brake shoe manufacturing process consists primarily of melting cast
scrap with various alloys. The molten metal is poured into green sand molds
containing steel backs and reinforced with expanded wire bundles to prevent
premature cracking in service. The product solidifies in the mold and the rough
casting is cleaned and inspected to ensure dimensional and metallurgical
requirements are satisfied.
 
COMPETITION
 
  The Company is the largest manufacturer of specialty trackwork in North
America, serving all of the Class I railroads and a number of regional and
short-line railroads. In specialty trackwork, the Company competes with a
number of North American manufacturers, including Conley Frog/Switch & Forge
Co., Voest-Alpine Nortrak Inc., an affiliate of Voest-Alpine Eisenbahn Systemme
AG and Progress Rail. Most of these companies' manufacturing facilities are
located in the eastern U.S. which gives them a slight competitive shipping
advantage over the Company's Chicago Heights facility, which serves customers
in the eastern U.S. In the Company's opinion, the locations of its specialty
trackwork manufacturing facilities in Superior, Wisconsin, Newton, Kansas and
Pueblo, Colorado provide it with a competitive advantage with respect to
railroads operating in the western U.S. and Canada. In December 1992, the
second largest North American specialty trackwork manufacturer, with estimated
net sales of approximately $30 to $40 million in 1991 and 1992, ceased
operations.
 
  The Company is the second largest U.S. manufacturer of freight railcar and
locomotive wheels. In the market for freight railcar and locomotive cast
wheels, the Company's primary competitor is Griffin Wheel Company, a subsidiary
of AMSTED Industries, Inc. The Company also competes with Standard Steel, a
division of Freedom Forge Corporation, which manufactures forged wheels. As a
result of the Wheel Mounting
 
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Acquisition, the Company has the largest independent freight car wheel mounting
operation in North America. The majority of such wheel mounting operations are
currently performed in-house by Class I Railroads. The remaining independent
wheel mounting market is highly fragmented. The Company is the only U.S.
manufacturer of metal brake shoes. The Company is the largest supplier of
railroad classification yard retarder control and automation systems. In this
market, the Company's primary competitors are Union Switch & Signal and General
Railway Signal.
 
  The principal competitive factors in the specialty trackwork market are
product quality, on-time delivery, price and technical service and support. The
principal competitive factors in the mechanical products market are price and
product availability. The principal competitive factors in the wheel mounting
service market are product quality and availability. The limited number of
railroad customers, their efforts to reduce costs, and excess industry capacity
in certain of the Company's product lines historically have limited the
Company's ability to increase prices. The Company believes it is well-
positioned to compete in all of its served markets, due to its leading market
share, engineering capability, broad manufacturing base and long-standing
customer relationships. Historically, the Company has experienced limited
foreign competition due to the specialized nature of many of its products, the
importance of AAR product approvals and AREA specifications and the cost of
shipping. However, there can be no assurance that foreign competition will not
increase in the future.
 
ORDER BACKLOG
 
  Specialty trackwork deliveries generally require lead-times of three to six
months. Most specialty trackwork installations occur in the period from March
through October. Consequently, deliveries are somewhat seasonal, with order
backlog increasing in the spring and decreasing in the late summer. For
discussion of quarterly results of operations and working capital, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the 1996 Annual Report to Stockholders (the "Annual
Report") and incorporated by reference in Part II, Item 7 hereof. Order backlog
for wheels and brake shoes is less meaningful because these products have short
production lead-times. All order backlog figures include only firm orders for
which customers have issued releases for production and delivery and exclude
the non-current portion of any long-term supply arrangements. The Company's
specialty trackwork and mechanical products backlog was $33.0 million and $45.4
million as of July 31, 1996 and 1995, respectively. The Company expects to fill
all of its order backlog as of July 31, 1996 during the current fiscal year.
The reduction in backlog between July 31, 1996 and July 31, 1995 is primarily
due to increased capacity and improved operating efficiencies at the Company's
specialty trackwork manufacturing facilities which have shortened delivery
times, specialty trackwork multi-year customer agreements that provide for
shorter lead times for product delivery, and, in fiscal 1996, included the
additional impact of the merger-induced order delays for specialty trackwork
products.
 
INTELLECTUAL PROPERTY
 
  The Company holds 25 U.S. trademarks and 35 foreign trademarks and has
applications pending for 4 U.S. trademarks. The Company actively protects
trademarks which it believes have significant goodwill value. The Company
currently holds 26 U.S. patents and 47 foreign patents and has applications
pending for 7 U.S. patents and 31 foreign patents. The Company applies for
patent protection when it believes the expense of doing so is justified. The
Company also relies on trade secrets and know-how in the production of its
specialty trackwork and mechanical products. The Company does not believe that
its intellectual property rights are critical to its success.
 
RAW MATERIAL SUPPLIERS
 
  The principal raw materials for specialty trackwork are railroad rail and
manganese. The Company purchases rail from various rail manufacturers. In
certain instances, the Company purchases rail directly from its railroad
customers for whom specialty trackwork is being built, capitalizing on their
purchasing economies. The primary raw material for railcar and locomotive
wheels is steel scrap, a commodity material which is readily
 
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available from a number of suppliers The primary raw material for metal brake
shoes is iron scrap, a commodity material, which is readily available from a
number of suppliers.
 
  There are at least two suppliers for each raw material and component the
Company purchases. The Company currently purchases actively from a broad range
of suppliers. No supplier accounted for more than 10% of the Company's
purchases in fiscal 1996.
 
EMPLOYEES
 
  As of July 31, 1996, the Company had 1,449 employees, approximately 69% of
whom are represented by unions. The principal unions representing hourly
employees are the United Steelworkers of America and the United Auto Workers.
In fiscal 1995, the Company negotiated a new five-year collective bargaining
agreement at its Chicago Heights, Illinois trackwork manufacturing facility.
This contract covers approximately 12% of the Company's hourly employees. The
Company also entered into an initial three-year contract at the Newton, Kansas
facility covering approximately 6% of the Company's hourly employees. In fiscal
1996, the Company entered into three-year contracts at the Anderson, Indiana
and Baltimore, Maryland facilities covering approximately 11% of the Company's
hourly employees. During the second half of fiscal 1996, the Company negotiated
a new three-year collective bargaining agreement at its Calera, Alabama wheel
foundry. The contract covers approximately 36% of the Company's hourly
employees. The Company has no contracts expiring in fiscal 1997. The Company
believes that its labor relations are good.
 
ENVIRONMENTAL MATTERS
 
  For a description of compliance with environmental matters and of litigation
related thereto, see Part I, Item 3--Legal Proceedings herein.
 
ITEM 2--PROPERTIES
 
  The Company maintains its headquarters in Chicago, Illinois and conducts its
operations in nine principal manufacturing plants located throughout the U.S.
The Company believes its property and equipment is in good condition and
suitable for its needs. The Company has sufficient capacity to increase output
at its specialty trackwork manufacturing plants and its manganese steel
foundry. The Company's wheel foundry has operated at full capacity since 1988.
The Company's principal operating facilities are as follows:
 
<TABLE>
<CAPTION>
                          APPROXIMATE
                            SQUARE
LOCATION                    FOOTAGE   OWNED/LEASED             DESCRIPTION OF USE
--------                  ----------- ------------ ------------------------------------------
<S>                       <C>         <C>          <C>
Chicago Heights,
 Illinois...............    182,000       Owned    Specialty trackwork rail manufacturing
Chicago Heights,
 Illinois...............    244,000       Owned    Specialty trackwork manufacturing
Cincinnati, Ohio........    135,000       Owned(1) Specialty trackwork manufacturing
Pueblo, Colorado........    111,000       Owned    Specialty trackwork manufacturing
Superior, Wisconsin.....     94,000       Owned(2) Specialty trackwork manufacturing
Newton, Kansas..........     58,000      Leased(3) Specialty trackwork manufacturing
Milwaukee, Wisconsin....    150,000      Leased    Specialty trackwork manufacturing
Duluth, Minnesota.......     10,000      Leased    Specialty trackwork panelizing
Anderson, Indiana.......    155,000       Owned    Manganese steel trackwork castings
Crown Point, Indiana....     20,000      Leased    Manganese steel trackwork casting patterns
Calera, Alabama.........    259,000       Owned    Cast railroad wheels and idler wheels
Calera, Alabama.........     19,000       Owned(4) Cast railroad wheels and idler wheels
Baltimore, Maryland.....     61,000       Owned    Metal brake shoes
Kansas City, Kansas.....     36,000      Leased    Railroad wheel assembly
Lewistown, Pennsylvania.     29,000       Owned    Railroad wheel assembly
Chicago Heights,
 Illinois...............     21,000       Owned    Railroad wheel assembly
Corsicana, Texas........     18,000       Owned    Railroad wheel assembly
Riverside, California...     11,000      Leased    Railroad wheel assembly
Tacoma, Washington......     10,000      Leased    Railroad wheel assembly
</TABLE>
 
                                       9
<PAGE>
 
--------
(1) Facility formerly owned by ABC Rail-Cogifer Industrial. See "--Cogifer
    Relationship."
(2) Land leased from Burlington Northern.
(3) Facility is leased by the Company in connection with an industrial revenue
    bond arrangement and pursuant to a lease which grants the Company an option
    to purchase the facility for a nominal amount.
(4) This facility, which was acquired in the Wheel Mounting Acquisition, was
    not being operated by GE Railcar at the time of the acquisition. The
    Company is utilizing this facility in the production of railroad and idler
    wheels in conjunction with its other Calera facility.
 
  All of the Company's owned manufacturing and assembly facilities, other than
the Newton, Kansas and one of the Chicago Heights facilities and the former ABC
Rail-Cogifer Industrial's Cincinnati, Ohio facility, are pledged as security
under the Company's senior credit facility. The Company intends to pledge the
Chicago Heights facility to a third party lender which financed the purchase of
this facility. The Cincinnati, Ohio facility is pledged as security under a
separate line of credit facility.
 
ITEM 3--LEGAL PROCEEDINGS
 
  The Company is subject to a variety of environmental laws and regulations
governing discharges to air and water, the handling, storage and disposal of
hazardous or solid waste materials and the remediation of contamination
associated with releases of hazardous substances. Although the Company believes
it is in material compliance with all of the various regulations applicable to
its business, there can be no assurance that requirements will not change in
the future or that the Company will not incur significant cost to comply with
such requirements. In 1990, the Company established the position of Director of
Environment, Safety and Health with responsibility for monitoring compliance
with environmental, health and safety requirements. The Director works with
responsible personnel at each facility, with the Company's environmental
counsel and with environmental engineering consultants retained to assist
ongoing management of environmental, health and safety requirements.
 
  In connection with its formation and the purchase of certain assets and
liabilities from the Railroad Products Group of Abex in 1987, the Company
obtained a comprehensive environmental indemnity from Abex. The indemnity
covers environmental conditions, whether or not then known, in existence at the
time of the purchase, without dollar or time limit. Shortly after the purchase,
the Company performed surveys to assess the environmental conditions at the
time of the purchase. As a result of these studies, the Company has undertaken
environmental projects, including underground storage tank removal, corrective
action and other remedial action as necessary. Some of these actions are
ongoing and similar actions may be undertaken in the future. The costs of all
such actions have been, and of all such future actions will be, charged to
income in the period incurred. The Company believes that substantially all of
these actions are covered by the Abex indemnity. When Abex refused to
compensate the Company for costs incurred to-date, the Company filed suit
against Abex on November 18, 1991. One of the claims is also asserted in a
separate lawsuit filed in October, 1994.
 
  The Company asserts in the 1991 lawsuit that Abex is required to indemnify
the Company for (i) expenses, including legal fees, already incurred by the
Company in locating and remedying environmental contamination, (ii)
nonenvironmental losses incurred by the Company in connection with the acquired
assets and (iii) loss of property value due to other environmental remediation
expenses related to the acquired assets which may be incurred in the future.
The Company also asserts in the 1994 lawsuit that Abex is required to indemnify
the Company for the reduction in value of one of the sold properties (a
Pennsylvania manufacturing facility formerly owned by the Company) caused by
the environmental contamination at that site.
 
  Abex had asserted that it is not obligated to indemnify the Company for most
of the environmental and other claims that the Company has submitted for
indemnification and also took issue with the costs of individual remedial
measures. However, in July, 1995, a judgment was entered in the 1991 lawsuit in
the Company's favor for a substantial portion of its claims. The judgment was
not final and could have been appealed by Abex. As such, no amounts related to
this judgment were recorded in the Company's financial statements as of July
31, 1995. In October 1995, the judgment was finalized with the Company
receiving a payment of $2.8 million from
 
                                       10
<PAGE>
 
Abex. The Company's claim regarding the loss incurred on the sale of the
Pennsylvania facility is not included in the judgment and is the subject of
the 1994 lawsuit.
 
  The Company is also a party to various other legal proceedings arising in
the ordinary course of business, none of which is expected to have a material
adverse effect on the Company's business, financial condition or results of
operations.
 
ITEM 4--SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
 
  No matters were submitted to stockholders during the fourth quarter of the
fiscal year ended July 31, 1996.
 
ITEM 4A--EXECUTIVE OFFICERS OF THE REGISTRANT
 
  The executive officers of the Company during fiscal 1996 were as follows:
 
<TABLE>
<CAPTION>
          NAME           AGE                        POSITION
          ----           ---                        --------
<S>                      <C> <C>
Donald W. Grinter....... 59  Chairman of the Board and Chief Executive Officer
Ben R. Yorks............ 55  President and Chief Operating Officer
D. Chisholm MacDonald... 54  Senior Vice President, Chief Financial Officer
                             and Director
David G. Kleeschulte.... 53  Vice President, Technology and General Manager,
                             International Business Development
Eugene S. Ziemba........ 50  Vice President and General Manager, Mechanical Products
                             Division
</TABLE>
 
Mr. Yorks and Mr. Ziemba resigned as executive officers in October 1996.
 
  Donald W. Grinter. Mr. Grinter has served as the Company's Chairman of the
Board and Chief Executive Officer since December 1993. From August 1991 until
December 1993, Mr. Grinter served as the Company's President and Chief
Executive Officer and from August 1989 until August 1991, he served as the
Company's President and Chief Operating Officer. He has been a director since
August 1991. Prior to joining the Company, from June 1987 until August 1989,
Mr. Grinter was President of the Supermarket Group of Hussmann Corporation, a
subsidiary of Whitman Corporation. Mr. Grinter served as an Executive Vice
President of Abex from June 1984 until June 1987.
 
  Ben R. Yorks. Mr. Yorks served as the Company's President and Chief
Operating Officer from late December 1993 to October 1996. He served as a
director from July 1995 to October 1996. From September 1988 until December
1993, he served as President of the Forestry and Industrial Division of
Blount, Inc., a manufacturer of timber harvesting and industrial material
handling equipment.
 
  D. Chisholm MacDonald. Mr. MacDonald has served as the Company's Chief
Financial Officer since August 1987 and has served as a director since 1991.
Prior thereto, he served as Vice President and Corporate Controller of ASEA
Inc., a heavy industrial manufacturing company, in the United States from 1982
until 1987.
 
  David G. Kleeschulte. Mr. Kleeschulte has served as the Company's Vice
President, Technology and General Manager, International Business Development
since March 1994. From February 1992 to March 1994, Mr. Kleeschulte served as
the Company's Vice President-Mechanical Operations. Prior thereto, he was
plant manager of the Company's Calera, Alabama plant. Prior to the Company's
formation, Mr. Kleeschulte served as the Vice President of Engineering for
Mechanical Products of Abex.
 
  Eugene S. Ziemba. Mr. Ziemba served as Vice President and General Manager,
Mechanical Division from April 1992 to October 1996. Prior to April 1992, he
was Vice President, Operations, at Abar Ipsen Industries, a manufacturer of
heat treating equipment, from September 1990 until April 1992 and Vice
President, Operations at Fairbanks-Morse, Inc., a manufacturer of diesel
engines, from September 1984 until September 1990.
 
  Executive officers serve at the pleasure of the Board of Directors.
 
                                      11
<PAGE>
 
                                    PART II
 
ITEM 5--MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
  Information required by this item is set forth under the caption "Common
Stock Market" on page 37 and in the last two sentences under the caption
"Common Stock Market" on the inside back cover page of the Annual Report and is
incorporated by reference herein.
 
ITEM 6--SELECTED FINANCIAL DATA
 
  Information required by this item is set forth under the caption "Selected
Consolidated Financial and Operating Data" on page 12 of the Annual Report and
is incorporated by reference herein.
 
ITEM 7--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
  Information required by this item is set forth under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 13 through 18 of the Annual Report and is incorporated by
reference herein.
 
ITEM 8--FINANCIAL STATEMENTS
 
  Information required by this item is set forth on pages 19 through 37 of the
Annual Report and is incorporated by reference herein.
 
ITEM 9--CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
  None.
 
                                    PART III
 
ITEM 10--DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
  Information regarding directors of the Company is set forth under the caption
"Election of Directors" in the Company's proxy statement related to the 1996
annual meeting of stockholders (the "Proxy Statement") and is incorporated
herein by reference. Information regarding executive officers of the Company is
included as Item 4A of Part I hereof as permitted by the Instructions to 401(b)
of Regulation S-K. Information required by Item 405 of Regulation S-K is set
forth under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Proxy Statement and is incorporated by reference herein.
 
ITEM 11--EXECUTIVE COMPENSATION
 
  Information required by this item is set forth under the caption "Executive
Compensation" in the Proxy Statement and, except for information under the
captions "Executive Compensation--Report on Executive Compensation" and
"Executive Compensation--Performance Graph," is incorporated by reference
herein.
 
ITEM 12--SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
  Information required by this item is set forth under the caption "Stock
Ownership of Certain Beneficial Owners and Management" in the Proxy Statement
and is incorporated by reference herein.
 
                                       12
<PAGE>
 
ITEM 13--CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
  None.
 
                                    PART IV
 
ITEM 14--EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
 
  (a) 1. The following financial statements and the report thereon of Arthur
        Andersen LLP are included in the Annual Report, pages 19 through 37,
        and are incorporated herein by reference:
 
            Report of Independent Public Accountants
 
            Consolidated Statements of Operations for the Years Ended July 31,
            1996, 1995 and 1994
 
            Consolidated Balance Sheets as of July 31, 1996 and 1995
 
            Consolidated Statements of Stockholders' Equity (Deficit) for the
            Years Ended July 31, 1996, 1995 and 1994
 
            Consolidated Statements of Cash Flows for the Years Ended July 31,
            1996, 1995 and 1994
 
            Notes to Consolidated Financial Statements
 
     2. Financial Statement Schedules:
 
            All schedules are omitted since the required information is not
            presented or is not present in amounts sufficient to require
            submission of the schedules or because the information required is
            included in the consolidated financial statements and notes
            thereto.
 
     3. Exhibits
 
<TABLE>
<CAPTION>
      EXHIBIT
      NUMBER   DESCRIPTION OF DOCUMENT
      -------  -----------------------
     <C>       <S>                                                          <C>
       3.1     Restated Certificate of Incorporation of the Company (2)
       3.2     Bylaws of the Company (3)
       4.1     Form of certificate representing shares of Common Stock of
               the Company (1)
       4.2     Rights Agreement, dated as of September 29, 1995 between
               the Company and LaSalle National Trust, N.A., as Rights
               Agent, which includes the Form of Certificate of
               Designation, Preferences and Rights, the form of Rights
               Certificate and the Summary of Stockholder Rights Plan (5)
      10.1     Registration Rights Agreement, dated as of August 28,
               1991, among the Company, KARC and the Management Investors
               named therein (1)
      10.2     Amended and Restated Loan and Security Agreement, dated as
               of August 7, 1996, among the Company and ABC Deco Inc., as
               borrowers, the financial institutions named therein, as
               lenders, and American National Bank and Trust Company of
               Chicago, as agent, and Amendment No. 1 and Waiver thereto
               dated as of September 5, 1996
     *10.3     Stock Option Plan dated July 1, 1993 (1)
      10.4     Lease, entered into March 10, 1993, between the Company
               and Milton M. Siegel Company (1)
      10.5     Lease, entered into as of October 16, 1993, between the
               Company and Burlington Northern (1)
     *10.6     ABC Rail Corporation Master Savings Trust (1)
     *10.7     ABC Rail Corporation Savings and Investment Plan, as
               amended and restated effective as of May 1, 1988 (1)
</TABLE>
 
 
                                      13
<PAGE>
 
<TABLE>
<CAPTION>
      EXHIBIT
      NUMBER   DESCRIPTION OF DOCUMENT
      -------  -----------------------
     <C>       <S>                                                          <C>
      10.8     Partnership Agreement, dated as of February 21, 1992, by
               and between ABC Rail French Holdings, Inc. and Cogifer
               Americas, Inc. (1)
      10.9     Commercial Representation Agreement, dated February 21,
               1992, between the Company and Cogifer Industries of
               Croissy-sur-Sein, France and certain of its affiliates (1)
      10.10    Agreement, dated February 21, 1992, by and between the
               Company and Cogifer Industries (1)
      10.11    Lease, dated March 1, 1994, by and between the City of
               Newton, Kansas and the Company (2)
     *10.12    1994 Director Stock Option Plan (3)
     *10.13    Amendment No. 1 to 1994 Director Stock Option Plan
     *10.14    Form of option agreement evidencing options granted to
               Donald W. Grinter (72,000 shares), D. Chisholm MacDonald
               (40,000 shares), David G. Kleeschulte (40,000 shares), and
               Eugene Ziemba (60,000 shares) pursuant to the Stock Option
               Plan listed as Exhibit 10.3 above (3)
      10.15    Asset Purchase Agreement dated April 3, 1995, between the
               Company and General Electric Railcar Wheel and Parts
               Service Corporation (4)
     *10.16    1994 Stock Option Plan (2)
     *10.17    Agreement and General Release dated as of October 2, 1996
               between Ben R. Yorks and the Company
      13.1     Portions of 1996 Annual Report to Stockholders that are
               incorporated herein by reference
      21.1     Subsidiaries of the Company (2)
      23.1     Consent of Independent Public Accountants
      24.1     Powers of Attorney
      27.1     Financial Data Schedule
</TABLE>
 
    The Company is the guarantor of industrial revenue bonds issued by the
    City of Newton, Kansas, in a principal amount which does not exceed 10%
    of the total assets of the Company and its subsidiaries on a
    consolidated basis. The Company agrees to furnish a copy of the
    guaranty agreement to the Securities and Exchange Commission upon its
    request.
--------
*Management contract or compensation plan or arrangement.
(1) Incorporated by reference to the same numbered exhibit filed with the
    Registrant's Registration Statement on Form S-1 originally filed with the
    Securities and Exchange Commission on October 12, 1993 (SEC File No. 33-
    70242).
(2) Incorporated by reference to the same numbered exhibit filed with the
    Registrant's Registration Statement on Form S-1 originally filed with the
    Securities and Exchange Commission on April 13, 1994 (SEC File No. 33-
    77652).
(3) Incorporated by reference to the same numbered exhibit filed with the
    Registrant's Annual Report on Form 10-K for the fiscal year ended July 31,
    1994 (SEC File No. 0-22906).
(4) Incorporated by reference to the same numbered exhibit filed with the
    Registrant's Current Report on Form 8-K dated May 15, 1995 (SEC File No. 0-
    22906).
(5) Incorporated by reference to the same numbered exhibit filed with the
    Registrant's Current Report on Form 8-K dated October 2, 1995 (SEC File No.
    0-22906).
 
  (b) Reports on Form 8-K:
 
   None.
 
                                       14
<PAGE>
 
                                  SIGNATURES
 
  Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
 
Dated October 23, 1996                    ABC Rail Products Corporation
                                          (Registrant)
 
                                          /s/ Donald W. Grinter
                                          -------------------------------------
                                          Donald W. Grinter
                                          Chairman of the Board and
                                          Chief Executive Officer
 
  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on October 23, 1996:
 
/s/ Donald W. Grinter                                       *
-------------------------------------     -------------------------------------
Donald W. Grinter                         Donald R. Gant
Chief Executive Officer and Director      Director
(Principal Executive Officer)
 
 
                                                            *
                  *                       -------------------------------------
-------------------------------------     James E. Martin
Clarence E. Johnson                       Director
Director
 
 
                                                            *
                  *                       -------------------------------------
-------------------------------------     Jean-Pierre M. Ergas
George W. Peck IV                         Director
 
Director
  *The undersigned by signing his name hereunto has hereby signed this report
on behalf of the undersigned in the capacities mentioned and the above-named
officers and directors, on October 23, 1996, pursuant to a power of attorney
executed on behalf of each such director and officer and filed with the
Securities and Exchange Commission as Exhibit 24.1 to this report.
 
  /s/ D. Chisholm MacDonald
By: _________________________________
  D. Chisholm MacDonald
  Senior Vice President, Chief
  Financial
  Officer and Director
  (Principal Financial and
  Accounting Officer)
 
                                      15
<PAGE>


================================================================================


                      Securities and Exchange Commission
                            Washington, D.C. 20549



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



                                   EXHIBITS

                                      To

                          ANNUAL REPORT ON FORM 10-K
                              FOR THE YEAR ENDED
                                 JULY 31, 1996



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



                         ABC RAIL PRODUCTS CORPORATION


================================================================================
<PAGE>
 

<TABLE>
<CAPTION>
                                                                          Sequential
Exhibit                                                                      Page
Number    Description of Document                                           Number
------    -----------------------                                           ------
<C>       <S>                                                             <C>
  3.1     Restated Certificate of Incorporation of the Company (2)

  3.2     Bylaws of the Company (3)

  4.1     Form of certificate representing shares of Common Stock
          of the Company (1)

  4.2     Rights Agreement, dated as of September 29, 1995 between
          the Company and LaSalle National Trust, N.A., as Rights
          Agent, which includes the Form of Certificate of Designation,
          Preferences and Rights, the form of Rights Certificate and
          the Summary of Stockholder Rights Plan (5)

 10.1     Registration Rights Agreement, dated as of August 28, 1991,
          among the Company, KARC and the Management Investors named
          therein (1)

 10.2     Amended and Restated Loan and Security Agreement, dated as
          of August 7, 1996, among the Company and ABC Deco Inc., as
          borrowers, the financial institutions named therein, as
          lenders, and American National Bank and Trust Company of
          Chicago, as agent, and Amendment No. 1 and Waiver thereto
          dated as of September 5, 1996

*10.3     Stock Option Plan dated July 1, 1993 (1)

 10.4     Lease, entered into March 10, 1993, between the Company and
          Milton M. Siegel Company (1)

 10.5     Lease, entered into as of October 16, 1993, between the
          Company and Burlington Northern (1)

*10.6     ABC Rail Corporation Master Savings Trust (1)

*10.7     ABC Rail Corporation Savings and Investment Plan, as amended
          and restated effective as of May 1, 1988 (1)

 10.8     Partnership Agreement, dated as of February 21, 1992, by and
          between ABC Rail French Holdings, Inc. and Cogifer Americas,
          Inc. (1)

 10.9     Commercial Representation Agreement, dated February 21, 1992,
          between the Company and Cogifer Industries of Croissy-sur-Sein,
          France and certain of its affiliates (1)

 10.10    Agreement, dated February 21, 1992, by and between the Company
          and Cogifer Industries (1)
</TABLE>
<PAGE>


<TABLE>
<CAPTION>
<C>       <S>                                                             <C>
 10.11    Lease, dated March 1, 1994, by and between the City of 
          Newton, Kansas and the Company (2)

*10.12    1994 Director Stock Option Plan (3)

*10.13    Amendment No. 1 to 1994 Director Stock Option Plan

*10.14    Form of option agreement evidencing options granted to 
          Donald W. Grinter (72,000 shares), D. Chisholm MacDonald 
          (40,000 shares), David G. Kleeschulte (40,000 shares), and 
          Eugene Ziemba (60,000 shares) pursuant to the Stock Option 
          Plan listed as Exhibit 10.3 above (3)

 10.15    Asset Purchase Agreement dated April 3, 1995, between the 
          Company and General Electric Railcar Wheel and Parts Service 
          Corporation (4)

*10.16    1994 Stock Option Plan (2)

*10.17    Agreement and General Release dated as of October 2, 1996 
          between Ben R. Yorks and the Company

 13.1     Portions of 1996 Annual Report to Stockholders that are 
          incorporated herein by reference

 21.1     Subsidiaries of the Company (2)

 23.1     Consent of Independent Public Accountants

 24.1     Powers of Attorney

 27.1     Financial Data Schedule
</TABLE> 

     The Company is the guarantor of industrial revenue bonds issued by the City
     of Newton, Kansas, in a principal amount which does not exceed 10% of the
     total assets of the Company and its subsidiaries on a consolidated basis.
     The Company agrees to furnish a copy of the guaranty agreement to the
     Securities and Exchange Commission upon its request.

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

     *    Management contract or compensation plan or arrangement.

     (1)  Incorporated by reference to the same numbered exhibit filed with the
          Registrant's Registration Statement on Form S-1 originally filed with
          the Securities and Exchange Commission on October 12, 1993 (SEC File
          No. 33-70242).

     (2)  Incorporated by reference to the same numbered exhibit filed with the
          Registrant's Registration Statement on Form S-1 originally filed with
          the Securities and Exchange Commission on April 13, 1994 (SEC File No.
          33-77652).

     (3)  Incorporated by reference to the same numbered exhibit filed with the
          Registrant's Annual Report on Form 10-K for the fiscal year ended July
          31, 1994 (SEC File No. 0-22906).

     (4)  Incorporated by reference to the same numbered exhibit filed with the
          Registrant's Current Report on Form 8-K dated May 15, 1995 (SEC File
          No. 0-22906).
<PAGE>


 
     (5)  Incorporated by reference to the same numbered exhibit filed with the
          Registrant's Current Report on Form 8-K dated October 2, 1995 (SEC
          File No. 0-22906).