<PAGE>
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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 year ended December 31, 1998
                                    OR
     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934
          For the transition period from ___________ to ____________.

                       Commission File Number 1-3574


                      HASTINGS MANUFACTURING COMPANY
          (Exact name of registrant as specified in its charter)

                    Michigan                         38-0633740
            (State of incorporation)    (I.R.S. Employer Identification No.)

            325 North Hanover Street
               Hastings, Michigan                      49058
    (Address of principal executive offices)         (Zip Code)

    Registrant's telephone number, including area code:  (616) 945-2491

        Securities registered pursuant to Section 12(b) of the Act:

                                                NAME OF EACH EXCHANGE
              TITLE OF EACH CLASS                ON WHICH REGISTERED
         -----------------------------         -----------------------
         Common Stock, $2.00 par value         American Stock Exchange

     Securities registered pursuant to Section 12(g) of the Act:  None

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 [ ]



<PAGE>
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.  [X]

Aggregate market value of voting stock of Registrant held by non-affiliates
as of March 22, 1999 was $7,242,235.

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of March 22, 1999:

               Common Stock - $2 par value    789,526 Shares

            Documents and Information Incorporated by Reference

  Part III, Items 10, 11, 12 and 13      Proxy Statement for Annual Meeting
                                               to be held May 4, 1999

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<PAGE>
PART I

ITEM 1.   BUSINESS.

          Hastings Manufacturing Company (the "Company") is a Michigan
corporation organized in 1929 with its headquarters and U.S. manufacturing
facilities in Hastings, Michigan.

          The Company is primarily a manufacturer of piston rings for
automotive and light duty truck applications for the replacement market.
In addition, certain of the Company's piston ring products are produced for
original equipment applications.  To a lesser extent, the Company packages
and sells automotive mechanics' specialty tools and additives for engines,
transmissions and cooling systems.  All of the Company's products are also
sold in Canada.  Those products are produced and/or packaged and
distributed by the Company's Canadian subsidiary, Hastings, Inc., located in
Barrie, Ontario.

          The Company distributes its replacement products through numerous
auto parts jobbers and warehouse distributors within the U.S. and Canada.
These products are also distributed nationally and internationally through
numerous large-scale engine rebuilders and various retailer outlets.  The
Company now distributes the majority of its export sales on a direct
country basis.  Prior to early 1997, international sales had been primarily
distributed through one U.S. based customer.

          Prior to September 3, 1995, the Company maintained a position in
the manufacture and distribution of automotive and light truck related
filters.  As of that date, those filter product line assets and operations
were sold to CLARCOR, Inc. of Rockford, Illinois.  Certain filter
operations were continued through late 1996 for the purchaser under the
terms of a Transition Agreement.  Per the terms of that agreement, the
Company was required to vacate its former Knoxville, Tennessee facility
during 1996.  The Company's operations formerly located at that facility,
primarily piston ring packaging and distribution, were relocated to the
Hastings, Michigan facility in May of that year.  Additional factors
related to the filter operations sale are included in Note 2 to the
Consolidated Financial Statements (included in Item 8).

          As described in Note 3 to the Consolidated Financial Statements
(included in Item 8), in December 1996 the Company implemented a
restructuring plan designed to significantly reduce operating costs and
provide for more efficient operations at both the U.S. and Canadian
facilities.  That plan included the curtailment of most Canadian based
piston ring manufacturing effective April 30, 1997.  As noted, the
Company's Canadian subsidiary continues to distribute piston rings
throughout Canada.  However, its product is now sourced from the U.S.
operations.  The Canadian facility also continues to manufacture certain

                                     -1-
<PAGE>
piston ring parts and provides packaging operations for tools and piston
ring sets.  Effective in early 1999, the Canadian subsidiary became
responsible for all specialty tool distribution within the Canadian, U.S.,
and foreign markets.

          Fiscal 1997 was a critical year for the Company as it exited the
filter transition and implemented its restructuring effort.  The Company
returned to profitability for the first full year period since 1994.  The
Company built upon that success through the 1998 fiscal year fueled by
added sales growth and a continued commitment to control its operating
costs.  The leveraging of the realized sales growth against a modest
increase in operating expenses resulted in a favorable profit margin gain.

          The Company made several significant operating changes in its way
of conducting business following its restructuring efforts.  During 1997,
for instance, the Company made substantial progress in expanding its
overseas distribution channels on a country-direct basis.  By the close of
1997, the Company had contracted new distribution in Australia, South
America, the Middle East, Israel, Puerto Rico, and South America.  The
maturity of several of those markets contributed to the overall sales gain
achieved in 1998.  That combined sales gain however, revealed certain
operating constraints within the Company's manufacturing capabilities.  As
a result, the Company experienced a period of product shortages through the
latter half of 1998.  In response to those pressures, the Company has begun
the implementation of lean manufacturing principles including the
conversion to a more cellular approach to certain manufacturing processes.
This conversion should result in production efficiencies through both
reduced product lead times and capacity improvements.  This conversion
process will continue through much of the 1999 calendar year.

          Beginning in 1996, and carrying over to 1997, the Company made
substantial strides in its quality and business control operations.  The
Company's commitment to these initiatives was rewarded with QS-9000 and
ISO-9002 quality registrations in July 1997.  In February 1999, and
following several successful follow-up audits, the Company was recommended
for upgrade to ISO-9001 thus giving recognition to its product design
capabilities.

          The market for the Company's products is highly competitive.
The Company has two principal competitors in the pinston ring market.  The
principal methods of competition in the industry are price, service,
product performance, and product availability.  The Company ranks among the
three largest domestic producers of replacement piston rings.

          Among the Company's trade names used in marketing its products
are "Hastings," "Casite," and "Flex-Vent," which are registered trademarks
in the United States and many foreign countries.  The Company also holds a
number of patents and licenses.  In the opinion of management, the
Company's business generally is not dependent upon patent protections.
                                     -2-
<PAGE>
          The Company ships orders to customers within a short period,
ordinarily one week or less from the time orders are received.
Accordingly, backlog is not significant in the business of the Company and
no separate figures of backlog are kept by the Company.  The Company's
sales have limited seasonal fluctuations.

          None of the practices of the Company or the industries in which
it operates create any unusual working capital requirements that would be
material to an understanding of the business taken as a whole.

          The sales of the Company are to many customers and are not
dependent upon a single customer or a few customers.  As stated in Note 12
to the Consolidated Financial Statements (included in Item 8), net sales to
one customer (Chrysler Corporation), however, represented approximately
$3,874,000, $3,180,000, and $3,155,000 of the Company's consolidated sales
for 1998, 1997, and 1996 respectively.

          Raw materials essential to the production of the Company's
products are standard items obtainable in the open market and are purchased
from many vendors.  The Company maintains its own foundry facility at the
Hastings, Michigan location for producing the cast iron material required
for many of its piston ring applications.

          Research and development are performed by the Company's
engineering staff relating to improvements in products and production as
well as the design and testing of new products.  The Company's expenditures
for research and development are not material.

          The Company has no material governmental contracts.

          Compliance with federal, state, and local environmental laws and
regulations governing discharges into the environment is not expected to
have a material effect upon the capital expenditures, earnings, or
competitive position of the Company.

          The Company and its subsidiaries have a total employment of
approximately 465 employees.  Employee relations at all of the Company's
plant locations are considered to be satisfactory.

          While the Company maintains operations in Canada, there are no
unusual risks attendant to the Company's foreign operations.  The products
of the Company are sold worldwide.  Financial information regarding the
Company's geographic sales and long-lived assets is included in Note 12 to
the Consolidated Financial Statements contained in Item 8 below.





                                     -3-
<PAGE>
ITEM 2.   PROPERTIES.

          The general offices and manufacturing and distribution plant,
which produces and distributes piston rings and, through the transition
date discussed in Item 1 above, produced filters and filter component parts
for CLARCOR Inc., are owned by the Company and are located at 325 North
Hanover Street, Hastings, Michigan.  This facility consists of
approximately 260,000 square feet of production space, 154,000 square feet
of available warehouse area, and 35,000 square feet of office area.

          The Company's wholly owned Canadian subsidiary, Hastings, Inc.,
owns and operates manufacturing and warehouse facilities for piston rings,
additives, and mechanics' specialty tools and is located in Barrie,
Ontario.  This facility includes approximately 65,000 square feet of
production and warehouse space and 4,000 square feet of office space.

          As of year-end, production levels within the Company's Hastings,
Michigan facility were near 80% of capacity.

ITEM 3.   LEGAL PROCEEDINGS.

          The Company is not a party to any pending legal proceedings other
than routine litigation incidental to its business.  In the opinion of
management, the outcome of any litigation currently pending will not
materially affect the Company's consolidated financial position.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          No matter was submitted during the fourth quarter of 1998 to a
vote of security holders through the solicitation of proxies or otherwise.


                                  PART II

ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
          MATTERS.

          The Company's common stock is traded on the American Stock
Exchange (ticker symbol HMF).  On March 22, 1999, there were 789,526
outstanding shares and the approximate number of record shareholders
was 279.

          High and low sales prices and cash dividends, per quarter, are as
set forth below.  All results have been adjusted to reflect the two-for-one
stock split as discussed in Note 13 to the Consolidated Financial
Statements in Item 8 below.



                                     -4-
<PAGE>
<TABLE>
<CAPTION>
                                    1998                          1997
                        ----------------------------   ---------------------------
                                             CASH                          CASH
                           STOCK PRICE     DIVIDENDS     STOCK PRICE     DIVIDENDS
                         HIGH       LOW      PAID      HIGH       LOW      PAID
                        ----------------------------------------------------------
<S>                    <C>        <C>       <C>      <C>        <C>       <C>
First Quarter. . . .    $24-1/2    $19-7/8   $.075    $15-1/8    $12-1/2   $.05
Second Quarter . . .     24-3/4     22-3/4    .08      14-3/8     13        .05
Third Quarter. . . .     23         20-3/4    .08      19-5/8     13-3/8    .075
Fourth Quarter . . .     20-3/4     16-1/2    .08      20-3/4     18-7/8    .075
</TABLE>

          The Company expects to continue its policy of paying regular
quarterly dividends, although this policy is dependent upon future
earnings, capital requirements, and financial condition.  In addition, cash
dividends are restricted in accordance with the Company's loan agreements
as described in Note 6 to the Consolidated Financial Statements included in
Item 8 below.  Unrestricted retained earnings under the agreements amounted
to $2,618,277 at December 31, 1998.

          The Company made no unregistered sales of any of its securities
during 1998.

ITEM 6.   SELECTED FINANCIAL DATA.

<TABLE>
<CAPTION>
                                         1998              1997             1996<F2>          1995<F3>           1994
                                      -----------       -----------       -----------       -----------       -----------
<S>                                  <C>               <C>               <C>               <C>               <C>
Net Sales . . . . . . . . . . . .     $38,752,104       $35,574,954       $39,408,610       $63,228,312       $74,572,222
Net Income (Loss) . . . . . . . .       1,730,427           955,233          (884,843)       (3,023,180)          448,921
Basic and Diluted
  Earnings (Loss) per Share<F1> .            2.24              1.24             (1.15)            (3.93)              .58
Long-Term Debt. . . . . . . . . .       4,620,000           565,625         2,028,125         3,490,625         6,223,900
Total Assets. . . . . . . . . . .      36,188,500        33,390,331        34,454,989        37,547,568        47,854,279
Dividends per Share<F1> . . . . .            .315               .25               .20               .20               .20
Average Shares Outstanding:<F1>
  Basic . . . . . . . . . . . . .         771,496           768,516           768,516           768,516           768,516
  Diluted . . . . . . . . . . . .         772,694           768,680           768,516           768,516           768,516






                                     -5-
<PAGE>
<FN>
<F1> Average shares outstanding and the related per share results have been
adjusted to reflect the two-for-one stock split discussed in Note 13 to the
Consolidated Financial Statements included in Item 8 below.

<F2> The 1996 data includes non-recurring restructuring and relocation
costs totaling $819,900.  Refer to Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and Notes 2 and
3 to the Consolidated Financial Statements included in Item 8, "Financial
Statements and Supplementing Data."

<F3> The 1995 data includes the effects of the sale of filter operations
and the subsequent realignment of the organizational structure to a smaller
size.  Refer to Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 2 to the Consolidated
Financial Statements included in Item 8, "Financial Statements and
Supplementary Data."
</FN>
</TABLE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS.

          As noted in the Company's recent filings under the Securities
Exchange Act, 1997 reflected a full year of post-filter operating results
following the sale of the Company's filter assets and operations in September
1995.  As such, 1998 versus 1997 comparisons are not impacted by the sale.
Certain comparisons between 1997 and 1996, however, continue to be impacted
by the transition period following the sale, which extended through most of
1996.  The effects of the post-filter transition have been fully documented
in previous filings.  In addition to the impact of the filter operations
sale, the Company announced a restructuring program in the fourth quarter
of 1996 as discussed in Note 3 to the Consolidated Financial Statements.
The impact from that program is likewise reflected in the following analysis,
as applicable.

          For the year, the Company generated net income of $1,730,427
compared to net income of $955,233 in 1997.  This enhanced profitability
was the result of various factors, each of which is more fully described
below.  These factors include a net sales gain in 1998 of 8.9% over 1997
levels; a gross profit margin improvement driven by lower material costs
with overhead costs increasing at a slower pace than sales increases; and
continued control over operating expenses which increased a very modest
1.7% in comparison to the 12.1% increase in gross profit.





                                     -6-
<PAGE>
RESULTS OF OPERATIONS

NET SALES

1998 COMPARED TO 1997

          Net sales for 1998 increased $3,177,150, or 8.9%, from
$35,574,954 in 1997 to $38,752,104.  This growth in net sales reflects
increases in piston ring volume within the Company's domestic aftermarket,
private brand, and export markets.  The growth in the domestic aftermarket
reflects the continued success of the Company's increased focus on this
aspect of the piston ring market.  The growth in the private brand area is
the result of increased volume to several major customers.  The increase in
the export area reflects the on-going development and growth of the
Company's direct export efforts.

          Net sales increased by $540,209, or 6.4%, in the fourth quarter
primarily due to the factors discussed above related to the annual sales
increase.

1997 COMPARED TO 1996

          Net sales for 1997 decreased $3,833,656, or 9.7% from 1996.  This
decrease reflects the impact of the filter transition.  Filter operations
accounted for $5,992,800 in net sales for the full year of 1996, whereas
there are no filter sales included in the 1997 results.  As such, net sales
for the remaining products in 1997 increased $2,159,144, or 6.5%.

COST OF SALES AND GROSS PROFIT

1998 COMPARED TO 1997

          Cost of sales for 1998 increased $1,809,202, or 7.4%, from
$24,285,197 in 1997 to $26,094,399.  The increase in cost of sales reflects
the corresponding increase in net sales.  The gross profit margin increased
to 32.7% in 1998 from 31.7% in 1997.  This increase is primarily due to a
decrease in certain raw material costs and overhead costs increasing at a
rate lower than the sales increase, offset largely by increased labor
costs.  As disclosed in Note 4 to the Consolidated Financial Statements,
the positive effect resulting from the 1998 liquidation of certain LIFO
inventory layers was comparable to 1997 (approximately $60,600 and $53,000
pre-tax reduction in costs of sales for 1998 and 1997, respectively).
While overhead costs increased during 1998, the rate of increase trailed
the rate of sales increase due to the fixed nature of a large portion of
these costs.  Labor costs increased in 1998 as a result of the collective
bargaining agreement and additional overtime required by increased customer
demand and the Company's efforts to significantly reduce the time from
customer order to product shipment.

                                     -7-
<PAGE>
          The gross profit margin generated in the fourth quarter (37.7%)
was higher than the margin reported through the third quarter of 1998
(31.1%) primarily because the factors noted above had their greatest impact
in the fourth quarter.

1997 COMPARED TO 1996

          Cost of sales for 1997 decreased $5,013,944, or 17.1%, from 1996.
The gross profit margin increased to 31.7% for 1997 from 25.7% in 1996.
The aggregate cost of sales reduction, with the improvement in the gross
profit margin, reflects the absence of any filter related activity in 1997.
The 1996 results were affected by the transition agreement that the Company
had with the purchaser of the Company's filter operations.  The agreement
restricted the Company to a minimum gross profit on filter products in
1996.  In addition to the specific filter production costs included in the
1996 results, certain product driven distribution and support operating
costs are included in cost of sales.  Following the 1996 relocation of
certain piston ring operations from the Company's Knoxville facility, which
was included in the filter sale, those operating costs decreased from
$3,785,000 in 1996 to $2,762,000 in 1997.  Lastly, retiree medical costs,
which are allocated to cost of sales and operating expenses, decreased in
1997 compared to 1996.  As discussed in Note 9 to the Consolidated
Financial Statements, in April 1997, the Company announced an amendment to
its postretirement benefit plans.  The amendment resulted in an $870,000
reduction in cost of sales.

OPERATING EXPENSES

1998 COMPARED TO 1997

          Operating expenses for 1998 increased $154,767, or 1.7%, from
$9,186,371 in 1997 to $9,341,138.  Advertising expenses decreased $47,911,
or 12.8%, from the 1997 total.  This decrease reflects the cost of a
biannual product catalog expense in 1997, combined with minor 1998
reductions in cooperative advertising, printed material, and various other
advertising costs.  These 1998 reductions were offset slightly by an
increase in advertising support staff salaries.  Selling expenses decreased
$179,737, or 5.8%, from the 1997 total.  This decrease is primarily due to
a reduction in various sales personnel expenses, offset slightly by a sales
driven increase in agency commissions.  General and administrative expenses
increased $382,415, or 6.7%, from the 1997 total.  This increase is due
primarily to an increase in the provision for doubtful accounts receivable,
offset by a number of insignificant account decreases.  The provision
increase, amounting to $422,500, relates primarily to two accounts which
management believes is not indicative of the collectability of remaining
accounts.



                                     -8-
<PAGE>
          Fourth quarter 1998 operating expenses were $227,809 higher than
the 1997 primarily due to a $220,600 charge relating to an uncollectible
accounts receivable.

1997 COMPARED TO 1996

          Total operating expenses for 1997 decreased significantly from
1996.  These reductions reflect the full elimination of any filter
sensitive expenses by the Company in 1997, as well as the favorable results
of the December 1996 restructuring plan discussed in Note 3 to the
Consolidated Financial Statements and a $180,000 reduction in retiree
medical costs relating to the plan amendment discussed above and in Note 9
to the Consolidated Financial Statements.

OTHER EXPENSES

1998 COMPARED TO 1997

          Other expenses, net for 1998 increased by $5,987 over the 1997
net amount.  Short-term borrowings in 1998 remained above the 1997 levels
through late August of this year, reflecting increased working capital
requirements as driven by the net sales increase.  As discussed in the
"Liquidity and Capital Resources" section below, the Company restructured
its short- and long-term debt obligations in late August 1998.  This debt
restructuring had a significant effect on the interest expense amounts for
both the fourth quarter and year-to-date periods.  As a result, annual
interest expense increased $61,452, or 12.0%, from the 1997 total.  For the
fourth quarter, interest expense was up $109,681, or 87.5%.  Interest
expense will remain higher for the next several years as the Company
amortizes its long-term debt.  This increase, however, should be offset by
lower pension expense and Pension Benefit Guaranty Corporation (PBGC)
premiums resulting from the increased funding position of the Company's
defined benefit pension plans.  The 1998 and 1997 interest income amounts
were derived from the escrowed funds generated by the sale of the filter
operations which were held until early September of this year.

1997 COMPARED TO 1996

          Other expenses, net for 1997 increased by $261,639 over the 1996
net amount.  The net interest position reflects both lower expense and
income.  This relationship represents a continued decline in net borrowings
resulting from normal long-term debt amortization combined with the use of
interest earning funds previously held through 1996 for capital equipment
acquisitions.  The 1997 and 1996 interest income amounts both reflect the
interest derived from the escrowed funds noted earlier, while the 1996
amounts also reflect the interest earned on the funds held for capital



                                     -9-
<PAGE>
acquisition.  The favorable 1996 "Other, net" amount primarily reflects a
$204,500 gain from the termination of an interest rate swap agreement in
March of that year.

TAXES ON INCOME

          The impact of income taxes on the reported results of the Company
is detailed in Note 10 to the Consolidated Financial Statements.  The 1998
and 1997 effective tax rates of 37.9% and 39.4%, respectively, are higher
than the statutory federal rate of 34% due primarily to the impact of state
income taxes and certain nondeductible expenses.  The 1996 effective tax
credit rate of 28.5% is lower than the statutory rate due primarily to the
increase in the valuation allowance for certain unused foreign tax credits
and the recognition of an accumulated state income tax obligation.

          As of December 31, 1998, the Company recorded net deferred income
tax assets of $7,115,493.  The major components include the tax effect of
net operating loss carryforwards of $1,206,318 and net accrued retirement
and postretirement benefit obligations totaling $5,056,048.  The
realization of these recorded benefits is dependent upon the generation of
future taxable income.

          The net operating loss carryforwards fully expire in 2010, 2011,
and 2012, if not previously utilized.  Management has prepared projections
of taxable income for future years indicating that the cumulative net
operating loss is expected to be fully utilized by the end of the first
quarter of 2000.

          The Company further expects to be able to realize the deferred
tax assets related to the retirement and postretirement benefit obligations
as it pays these benefits.  Such payments will constitute an expense that
is deductible for tax reporting purposes over many years.  During each of
the ten years before the recent net operating loss carryforwards arose,
the Company has been able to deduct these benefits for tax reporting
purposes and reduce its current tax liability accordingly.  As a result of
the 1997 amendment to the retiree medical plan as discussed in Note 9 to
the Consolidated Financial Statements, current tax deductible payments
are expected to exceed the annual expense recognition for financial
reporting purposes, thus accelerating the absorption of the future
periods' tax benefit.

          Management believes that it is more likely than not that adequate
levels of future income will be generated to absorb the net operating loss
carryforwards, the deductible amounts related to the retirement and
postretirement benefit obligations, and the remaining net deductible
temporary differences.  In addition, based upon projected foreign source
income, management believes it is more likely than not that the foreign tax
credits will be utilized prior to their expiration.

                                     -10-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

          The Company's primary cash requirements continue to be for
operating expenses such as labor costs and raw materials, and for funding
accounts receivable, capital expenditures, and long-term debt service.
Historically, the Company's primary sources of cash have been from
operations and from bank borrowings.  As a result of the full transition
out of filter operations, and the favorable impact of the subsequent
restructuring efforts, the Company expects to generate sufficient future
funds from operations and bank borrowings to fund its growth and operating
needs.  In late August 1998, the Company entered into a $6,600,000 long-
term debt agreement with its primary lender.  This new agreement allowed
the Company to take advantage of favorable interest rate conditions.
Borrowings under this new long-term debt agreement were used for several
purposes including: raising the Company's defined benefit plans to funding
levels that would alleviate the payment of the variable rate PBGC premiums;
consolidating the remaining long-term debt obligations; and paying down
certain short-term notes payable.  As a result of this new long-term debt
agreement, the Company's short-term line with its primary lender was
reduced from $5,000,000 to $3,000,000.  Total short-term lines available to
the Company as of December 31, 1998 totaled $5,200,000, of which $2,900,000
was unused.  In connection with the floating rate debt exposure, the
Company entered into an interest rate swap agreement essentially fixing the
interest rate on that debt within a small range.  The rate will fluctuate
between 7.45% to 7.95% depending upon certain Company performance
parameters.  As of December 31, 1998 the "fixed" rate on those borrowings
was 7.70%.

          During 1998, the Company used $1,192,259 of net cash for
operating activities.  The realized net income, depreciation, and decrease
in deferred income taxes were offset by increases in accounts receivable,
inventories and other assets, and a decrease in the periodic postretirement
benefit obligation.  The decline in the deferred income tax asset is
primarily the result of the additional funding of the Company's defined
benefit pension plans, as discussed above, and the partial utilization of
the net operating loss carryforwards.  The increased accounts receivable
and inventory reflect the additional working capital requirements that are
necessary to support the higher sales level.  The increase in the prepaid
pension asset of $2,675,688 was generated when the Company funded the
defined benefit plans to specified limits.  As such, it did not have a
direct effect on operations during 1998.  Excluding this item, net cash
generated from operating activities amounted to $1,483,429.  The investing
activities for 1998 reflect the Company's continued commitment to enhancing
its production capabilities, as capital expenditures totaled $2,246,598.
Capital expenditures should decline in 1999 as the Company moves toward
adopting cellular manufacturing.  Investing activities also reflect the
September 1998 release of escrowed funds relating to the 1995 sale of


                                     -11-
<PAGE>
filter operations.  These funds were subsequently used to reduce short-term
notes payable.  Financing activities reflect the increased reliance on
short-term borrowings to help satisfy increased working capital needs.
Financing activities also reflect the proceeds from the new long-term debt
agreement and the subsequent utilization of a portion of the proceeds to
pay down short- and long-term debt.  Dividends paid increased in 1998 due
to the continued improved operating results.

          During 1997, the Company generated net cash of $2,129,643 from
operating activities.  The realized net income, depreciation and decrease
in deferred income taxes were only partially countered by increased
accounts receivable and a reduction in the postretirement benefit
obligation.  The decline in the deferred income tax asset is the result of
the partial utilization of the net operating loss carryforwards, while the
postretirement benefit factor reflects, in part, the impact from the
modification of the retiree health plan that was effective in April 1997.
The majority of the Company's 1997 investing activities reflect capital
equipment purchases that the Company utilized to enhance its production
capabilities.  The financing activities for 1997 reflect a modest decrease
in reliance on short-term borrowings combined with the reduction of long-
term debt levels through normally scheduled quarterly payments.

          During 1996, the Company generated net cash of $1,188,280 from
operating activities.  The reported net loss and the reductions in accounts
payable and accruals were more than offset by depreciation and reductions
in accounts receivable and inventories.  The realized reductions in
accounts payable, accounts receivable, and inventories were primarily a
result of the Company's full transition out of filter operations.  The
outlay of $1,343,291 for capital expenditures in 1996 reflects, in part,
enhancements to the Hastings, Michigan facility in relation to the
inventory and shipping operations relocation from the Knoxville facility
subsequent to the filter operations sale.  The financing activities for
1996 reflect a reduced reliance on short-term borrowings throughout most of
the year, combined with the reduction of long-term debt levels through
scheduled debt payments.

          As noted throughout the above discussion, the Company has
realized its second consecutive year of significant sales increases from
its core product lines.  This growth has resulted in an increased net
income level combined with increased working capital demands.  The Company
will continue to monitor its working capital needs in order to balance its
cash and growth demands.  At this time, the Company anticipates that
operations (which will be subject to minimal current cash outflows for U.S.
income taxes due to the utilization of the net operating loss
carryforwards), in combination with the balancing of available short-term
lines with operations, will generate cash flows that will be sufficient to
fund its working capital, capital outlays, and dividend requirements through
1999.

                                     -12-
<PAGE>
NEW ACCOUNTING STANDARDS

          SFAS No. 133, entitled "Accounting for Derivative Instruments and
Hedging Activities" and issued in June 1998, requires companies to recognize
all derivatives contracts as either assets or liabilities in the balance
sheet and to measure them at fair value.  If certain conditions are met, a
derivative may be specifically designated as a hedge, the objective of
which is to match the timing of gain or loss recognition on the hedging
derivative with the recognition of (i) the changes in the fair value of the
hedged asset or liability that are attributable to the hedged risk or
(ii) the earnings effect of the hedged forecasted transaction.  For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change.  SFAS No. 133 is effective
for all fiscal quarters of fiscal years beginning after June 15, 1999.

          Historically, the Company has not entered into derivatives
contracts for speculative purposes.  The Company does periodically enter
into interest rate swap and collar agreements to reduce the impact of
changes in interest rates on its floating rate borrowings.  However, the
fair value of such derivatives are not significant.  Accordingly, the
Company does not expect adoption of the new standard on January 1, 2000 to
materially affect its consolidated financial statements.

YEAR 2000 READINESS DISCLOSURE

          The year 2000 (Y2K) issue is the result of computer programs
having been written using two digits, rather than four, to define the
applicable year.  Any of the Company's computers, computer programs,
manufacturing and administrative equipment, or products that have date-
sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000.  If any of the Company's systems that have date-
sensitive software use only two digits, system failures or miscalculations
may result causing disruptions of operations, including, among other
things, a temporary inability to process transactions or engage in similar
normal business activities.

          During 1995, the Company's internal data processing staff began
an evaluation of the Company's exposure to the effects of the Y2K issue.
As a member of certain automotive supplier trade associations, awareness of
the Y2K issue was both highlighted and documented beginning in early 1996.
At that point, the Company established a multi-disciplined committee to
coordinate the Company's efforts in addressing the Y2K impact.  This
committee continues to include several members of the internal Executive
Committee with responsibility for full board-level reporting on this issue.
Through the efforts of this committee, the Company coordinates both internal
and external reviews of its Y2K exposure.



                                     -13-
<PAGE>
          Internally, this committee evaluated the general operating
systems for the Company as well as the security systems, telecommunications
networks, manufacturing equipment, and internal personal computer (PC)
operations.  Through the second half of 1996 and much of 1997, the Company
utilized the services of an outside consultant, as well as its internal
resources, to convert its computer systems to be Y2K compliant.  As of
December 31, 1998, the Company's core operating system and applications,
its PC operating systems and the majority of its PC applications were
believed to be compliant.  The remaining PC applications are expected to be
compliant in mid-1999, pending installation of the next software release
or upgrade as needed.  Manufacturing equipment testing has been completed
with no perceived Y2K exposure.  At this point, the Company is
targeting a full-scale, live test of its operating systems for Y2K
compliance in mid-1999.  Incremental costs related to the Y2K project,
primarily consisting of expenses related to the consultant, approximated
$120,000 through 1998 with $10,000, $80,000 and $30,000 charged to
operating expenses as incurred in 1998, 1997 and 1996, respectively.
Internal costs, which are not incremental in nature, have not been tracked
by the Company.  Future costs to be incurred to complete Y2K compliance and
testing procedures, primarily related to direct Company personnel, are not
expected to be material.

          With the inception of the committee in 1996, the Company began to
focus externally as well.  The committee identified suppliers of products
and services deemed to be critical to the Company's operations, as well as
customers deemed to have the greatest Y2K exposure (e.g., EDI
communications).  The Company has coordinated via surveys with these key
contacts.  While the Company cannot guarantee Y2K compliance by its key
suppliers and customers, and in many cases will be relying on statements
from outside vendors without independent verification, preliminary results
indicate that these key suppliers and customers are aware of the issues and
are working to assure their compliance before the year 2000.  At this time,
the Company is not aware of any key suppliers or customers who will not be
Y2K compliant by the year 2000.  The Company's next steps will be to update
the solicitation of key customers, obtain more detailed information from
certain key suppliers and customers, and follow up with those companies who
did not respond to the original surveys.

          In addition, final plans are being developed for the 1999 internal
compliance test procedures.  Pending the results of that procedure, the
Company intends to prepare a contingency plan that will specify what
exposures it still perceives and what it plans to do if important components
are not expected to be Y2K compliant in a timely manner.  The Company
expects to prepare and evaluate its contingency plan by mid-1999.





                                     -14-
<PAGE>
FORWARD-LOOKING STATEMENTS

          With the exception of historical matters, the matters discussed
in this commentary include certain predictions and projections that may be
considered forward-looking statements under securities laws.  These
statements are subject to a number of important risks and uncertainties
that could cause actual results to differ materially including, but not
limited to, economic, competitive, governmental, and technological factors
affecting the Company's operations, markets, products, services, and prices.
The Company undertakes no obligation to update, amend, or clarify forward-
looking statements, whether as a result of new information, future events
or otherwise.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

          The Company is exposed to potential market risks on interest
rates relating to a swap agreement transacted with its primary lender in
connection with its long-term debt agreement.  Management believes that the
fluctuation in interest rates in the near future will not have a material
impact on its consolidated financial statements taken as a whole.  The
Company does not use derivative financial instruments for trading purposes.




























                                     -15-
<PAGE>
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

              Hastings Manufacturing Company and Subsidiaries

                     Consolidated Financial Statements
                  Years Ended December 31, 1998 and 1997
              Hastings Manufacturing Company and Subsidiaries

                                 Contents
              ===============================================



     Consolidated Balance Sheets -
       December 31, 1998 and 1997                                  14-15

     Consolidated Statements of Income -
       Years Ended December 31, 1998, 1997 and 1996                   16

     Consolidated Statements of Stockholders' Equity -
       Years Ended December 31, 1998, 1997 and 1996                   17

     Consolidated Statements of Cash Flows -
       Years Ended December 31, 1998, 1997 and 1996                18-19

     Notes to Consolidated Financial Statements                    20-36

     Report of Independent Certified Public Accountants               37





















                                     -16-
<PAGE>
<TABLE>
              Hastings Manufacturing Company and Subsidiaries

                        Consolidated Balance Sheets
            ==================================================
<CAPTION>
                                                             DECEMBER 31
                                                       1998              1997
                                                    -----------       -----------
<S>                                                <C>               <C>
ASSETS

CURRENT ASSETS
  Cash                                              $   635,773       $   558,172
  Accounts receivable, less allowance for
     possible losses of $210,000 and $215,000         5,489,165         5,148,906
  Refundable income taxes                                     -            13,475
  Inventories (Note 4):
     Finished products                                8,317,084         7,460,534
     Work in process                                    660,534           572,307
     Raw materials                                    1,620,604         1,239,657
  Prepaid expenses and other assets                      75,655            75,669
  Future income tax benefits (Note 10)                2,395,856         2,351,687
  Other current assets (Note 2)                               -           958,517
                                                    -----------       -----------

TOTAL CURRENT ASSETS                                 19,194,671        18,378,924
                                                    -----------       -----------

PROPERTY AND EQUIPMENT
  Land and improvements                                 635,692           658,243
  Buildings                                           5,275,207         4,633,937
  Machinery and equipment                            19,503,267        18,180,840
                                                    -----------       -----------

                                                     25,414,166        23,473,020
  Less accumulated depreciation                      16,411,078        15,156,120
                                                    -----------       -----------

NET PROPERTY AND EQUIPMENT                            9,003,088         8,316,900
                                                    -----------       -----------

PREPAID PENSION ASSET (Notes 6 and 8)                 2,675,688                 -

INTANGIBLE PENSION ASSET (Note 8)                       564,949           815,189

FUTURE INCOME TAX BENEFITS (Note 10)                  4,719,637         5,828,923


                                     -17-
<PAGE>
OTHER ASSETS                                             30,467            50,395
                                                    -----------       -----------

                                                    $36,188,500       $33,390,331
                                                    ===========       ===========
</TABLE>

       SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.









































                                     -18-
<PAGE>
<TABLE>
              Hastings Manufacturing Company and Subsidiaries

                        Consolidated Balance Sheets
            ==================================================
<CAPTION>
                                                             DECEMBER 31
                                                       1998              1997
                                                    -----------       -----------
<S>                                                <C>               <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Notes payable to banks (Note 5)                   $ 2,300,000       $ 3,400,000
  Accounts payable                                    1,536,612         1,475,098
  Accruals:
     Compensation                                       600,599           494,781
     Pension plan contribution (Note 8)                       -           608,786
     Income taxes                                        41,294                 -
     Taxes other than income                            152,932           172,854
     Miscellaneous                                      300,780           217,731
  Current portion of postretirement
     benefit obligation (Note 9)                      1,044,175         1,110,442
  Current maturities of long-term
     debt (Note 6)                                    1,320,000         1,462,500
                                                    -----------       -----------
TOTAL CURRENT LIABILITIES                             7,296,392         8,942,192

LONG-TERM DEBT, less current
  maturities (Note 6)                                 4,620,000           565,625

PENSION AND DEFERRED COMPENSATION
  OBLIGATION, less current portion
  (Note 8)                                            2,604,111         3,243,618

POSTRETIREMENT BENEFIT OBLIGATION,
  less current portion (Note 9)                      14,650,755        15,318,770
                                                    -----------       -----------

TOTAL LIABILITIES                                    29,171,258        28,070,205
                                                    -----------       -----------

COMMITMENTS AND CONTINGENCIES
  (Notes 6, 8 and 9)





                                     -19-
<PAGE>
STOCKHOLDERS' EQUITY (Notes 6, 7, 8 and 13)
  Preferred stock, $2 par value,
     authorized and unissued 500,000 shares                   -                 -
  Common stock, $2 par value, 1,750,000 
     shares authorized; 789,526 and
     780,626 shares issued and
     outstanding                                      1,579,052         1,561,252
  Additional paid-in capital                            338,272           145,788
  Retained earnings                                   7,273,410         5,793,219
  Accumulated other comprehensive income:
    Cumulative foreign currency
       translation adjustment                          (981,073)         (750,655)
    Pension liability adjustment
       ($1,806,695 and $2,165,876, net of
       tax of $614,276 and $736,398,
       respectively) (Note 8)                        (1,192,419)       (1,429,478)
                                                    -----------       -----------
    Total accumulated other comprehensive
       income                                        (2,173,492)       (2,180,133)
                                                    -----------       -----------

TOTAL STOCKHOLDERS' EQUITY                            7,017,242         5,320,126
                                                    -----------       -----------

                                                    $36,188,500       $33,390,331
                                                    ===========       ===========
</TABLE>

       SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.




















                                     -20-
<PAGE>
<TABLE>
              Hastings Manufacturing Company and Subsidiaries

                     Consolidated Statements of Income
            ==================================================
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                                  19987             19976             1996
                                               -----------      -----------      -----------
<S>                                           <C>              <C>              <C>
NET SALES                                      $38,752,104      $35,574,954      $39,408,610

COST OF SALES (Note 9)                          26,094,399       24,285,197       29,299,141
                                               -----------      -----------      -----------

Gross profit                                    12,657,705       11,289,757       10,109,469
                                               -----------      -----------      -----------

OPERATING EXPENSES
  Advertising                                      325,070          372,981          349,660
  Selling                                        2,940,478        3,120,215        3,593,143
  General and administrative
    (Note 9)                                     6,075,590        5,693,175        6,320,095
  Non-recurring restructuring
    and relocation costs
    (Notes 2 and 3)                                      -                -          819,900
                                               -----------      -----------      -----------

                                                 9,341,138        9,186,371       11,082,798
                                               -----------      -----------      -----------

Operating income (loss)                          3,316,567        2,103,386         (973,329)
                                               -----------      -----------      -----------

OTHER EXPENSES (INCOME)
  Interest expense                                 571,774          510,322          570,397
  Interest income                                  (35,982)         (47,062)        (145,853)
  Other, net                                        (3,652)          62,893         (160,030)
                                               -----------      -----------      -----------

                                                   532,140          526,153          264,514
                                               -----------      -----------      -----------

Income (loss) before income tax 
  expense (benefit)                              2,784,427        1,577,233       (1,237,843)




                                     -21-
<PAGE>
INCOME TAX EXPENSE (BENEFIT) 
  (Note 10)                                      1,054,000          622,000         (353,000)
                                               -----------      -----------      -----------
NET INCOME (LOSS)                              $ 1,730,427      $   955,233      $  (884,843)
                                               ===========      ===========      ===========


BASIC AND DILUTED EARNINGS
  (LOSS) PER SHARE OF COMMON
  STOCK (Notes 11 and 13)                      $      2.24      $      1.24      $     (1.15)
                                               ===========      ===========      ===========
</TABLE>

       SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



































                                     -22-
<PAGE>
<TABLE>
              Hastings Manufacturing Company and Subsidiaries
              Consolidated Statements of Stockholders' Equity
            ==================================================
<CAPTION>
                                                                                      ACCUMULATED
                                                     ADDITIONAL                          OTHER
                                        COMMON        PAID-IN         RETAINED       COMPREHENSIVE
                                        STOCK         CAPITAL         EARNINGS          INCOME             TOTAL
                                      ---------      ----------      -----------      -----------       -----------
<S>                                 <C>              <C>            <C>               <C>              <C>
BALANCE, January 1, 1996             $  777,626       $119,318       $ 6,854,865      $(2,526,831)      $ 5,224,978
Comprehensive income (loss):
  Net loss                                    -              -          (884,843)               -          (884,843)
  Other comprehensive income (loss):
    Foreign currency
      translation adjustment                  -              -                 -          (11,054)          (11,054)
    Pension liability adjustment
      ($1,115,188, net of tax of
      $379,164) (Note 8)                      -              -                 -          736,024           736,024
                                                                                                        -----------
                                                                                                            724,970
                                                                                                        -----------

Total comprehensive income (loss)                                                                          (159,873)
Shares issued under restricted
  stock plan, net of shares
  forfeited                               2,650         20,888                 -                -            23,538
Cash dividends ($.20 per share)               -              -          (156,195)               -          (156,195)
                                     ----------       --------       -----------      -----------       -----------

BALANCE, December 31, 1996              780,276        140,206         5,813,827       (1,801,861)        4,932,448
Comprehensive income:
  Net income                                  -              -           955,233                -           955,233
  Other comprehensive income:
    Foreign currency
      translation adjustment                  -              -                 -         (139,200)         (139,200)
    Pension liability adjustment
      (($362,230), net of tax of
      ($123,158)) (Note 8)                    -              -                 -         (239,072)         (239,072)
                                                                                                        -----------
                                                                                                           (378,272)
                                                                                                        -----------






                                     -23-
<PAGE>
Total comprehensive income                                                                                  576,961
Shares issued under restricted
  stock plan, net of shares
  forfeited                                 350          5,582                 -                -             5,932
Cash dividends ($.25 per share)               -              -          (195,215)               -          (195,215)
Two-for-one stock split (Note 13)       780,626              -          (780,626)               -                 -
                                     ----------       --------       -----------      -----------       -----------

BALANCE, December 31, 1997            1,561,252        145,788         5,793,219       (2,180,133)        5,320,126
Comprehensive income:
  Net income                                  -              -         1,730,427                -         1,730,427
  Other comprehensive income:
    Foreign currency
      translation adjustment                  -              -                 -         (230,418)         (230,418)
    Pension liability adjustment
      ($359,181, net of tax of
      $122,122) (Note 8)                      -              -                 -          237,059           237,059
                                                                                                        -----------
                                                                                                              6,641
                                                                                                        -----------

Total comprehensive income                                                                                1,737,068
Shares issued under restricted
  stock plan, net of shares
  forfeited                              17,800        192,484            (3,300)               -          (206,984)
Cash dividends ($.315 per share)              -              -          (246,936)               -          (246,936)
                                     ----------       --------       -----------      -----------       -----------

BALANCE, December 31, 1998           $1,579,052       $338,272       $ 7,273,410      $(2,173,492)      $ 7,017,242
                                     ==========       ========       ===========      ===========       ===========
</TABLE>

       SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
















                                     -24-
<PAGE>
<TABLE>
              Hastings Manufacturing Company and Subsidiaries

                   Consolidated Statements of Cash Flows
            ==================================================
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                         1998             1997              1996
                                                      -----------      -----------       ------------
<S>                                                  <C>              <C>               <C>
Operating Activities
  Net income (loss)                                   $ 1,730,427      $   955,233       $  (884,843)
  Adjustments to reconcile net
    income (loss) to net cash
    from (for) operating activities:
    Depreciation                                        1,464,944        1,337,100         1,255,252
    Gain on sale of property
      and equipment                                        (1,991)               -                 -
    Deferred income taxes (benefit)                       955,000          591,000          (370,000)
    Change in postretirement
      benefit obligation                                 (734,282)        (757,820)           70,058
    Changes in operating assets and
      liabilities:
      Accounts receivable                                (420,582)        (291,894)        1,764,615
      Refundable income taxes                              12,994           51,933           159,290
      Inventories                                      (1,434,958)         (37,063)          709,006
      Prepaid expenses and other
        current assets                                       (203)          31,656           (21,651)
      Prepaid pension cost                             (2,675,688)               -                 -
      Other assets                                         20,274           93,315           (97,240)
      Accounts payable and
        accruals                                         (108,194)         156,183        (1,396,207)
                                                      -----------      -----------       -----------

Net cash from (for)
  operating activities                                 (1,192,259)       2,129,643         1,188,280
                                                      -----------      -----------       -----------

Investing Activities
  Capital expenditures                                 (2,246,598)      (1,770,302)       (1,343,291)
  Release of filer sale escrow funds                      958,517                -                 -
  Proceeds from sale of property
    and equipment                                           7,899            1,299                 -
                                                      -----------      -----------       -----------

Net cash for investing activities                      (1,280,182)      (1,769,003)       (1,343,291)
                                                      -----------      -----------       -----------
</TABLE>

                                     -25-
<PAGE>
<TABLE>
              Hastings Manufacturing Company and Subsidiaries

                   Consolidated Statements of Cash Flows
            ==================================================
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                         1998             1997              1996
                                                      -----------      -----------       ------------
<S>                                                  <C>              <C>               <C>
Financing Activities
  Proceeds from issuance
    of notes payable
    to banks                                          $ 9,500,000      $ 7,850,000       $ 9,900,000
  Principal payments on
    notes payable to banks                            (10,600,000)      (7,450,000)       (8,400,000)
  Proceeds from issuance of
    long-term debt to banks                             6,600,000                -                 -
  Principal payments on
    long-term debt                                     (2,688,125)      (1,462,500)       (1,560,500)
  Dividends paid                                         (246,936)        (195,215)         (156,195)
                                                      -----------      -----------       -----------

Net cash from (for)
  financing activities                                  2,564,939       (1,257,715)         (216,695)
                                                      -----------      -----------       -----------

Effect of Exchange Rate
  Changes on Cash                                         (14,897)          (2,536)          (80,017)
                                                      -----------      -----------       -----------

Net Increase (Decrease) in Cash                            77,601         (899,611)         (451,723)

Cash, beginning of year                                   558,172        1,457,783         1,909,506
                                                      -----------      -----------       -----------

Cash, end of year                                     $   635,773      $   558,172       $ 1,457,783
                                                      ===========      ===========       ===========

Supplemental Cash Flow Information
  Cash paid during the year for:
    Income taxes, net of
      refunds                                         $    52,593      $   (40,793)      $  (172,890)
    Interest                                              591,639          524,814           578,061
</TABLE>

       SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                     -26-
<PAGE>
              Hastings Manufacturing Company and Subsidiaries

                 Note to Consolidated Financial Statements
              ===============================================

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

            Hastings Manufacturing Company and subsidiaries (Company) is
primarily a manufacturer of automotive and light duty truck piston rings
for the replacement market.  To a lesser extent, the Company packages and
sells automotive mechanics' specialty tools and additives for engines,
transmissions and cooling systems.  The Company's headquarters and primary
manufacturing facilities are located in Hastings, Michigan.  All of the
Company's products are also sold in Canada.  These products are produced
and/or packaged and distributed by the Company's Canadian subsidiary,
Hastings, Inc., located in Barrie, Ontario.

          The Company distributes its products primarily through numerous
auto parts jobbers and warehouse distributors for sale primarily in the
automotive replacement market throughout the U.S. and Canada.  Certain of
the Company's piston rings are produced for original equipment
applications.  The Company distributes the majority of its export sales on
a direct country basis.  Prior to early 1997, international sales had
historically been distributed through one U.S. customer.  The Company
performs ongoing credit evaluations of its customers and provides reserves
for probable credit losses.

PRINCIPLES OF CONSOLIDATION

          The consolidated financial statements include the accounts of the
parent company and its subsidiaries.  Upon consolidation, all significant
intercompany accounts and transactions are eliminated.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

          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. Actual results could differ from
those estimates.





                                     -27-
<PAGE>
REVENUE RECOGNITION

          The Company recognizes revenue when its products are shipped to
its customers.

FAIR VALUE OF FINANCIAL INSTRUMENTS

          The fair value of the Company's financial instruments, comprised
of cash, short-term receivables and payables, notes payable to banks
(variable interest rate) and long-term debt (variable interest rate)
approximates their carrying values.  The fair value of the Company's
interest rate swap agreement, as disclosed in Note 6, is not material.

INVENTORIES

         Inventories are stated at cost, not in excess of market.  The
Company uses the last-in, first-out (LIFO) method of determining costs for
U.S. raw material inventories.  Remaining inventories are valued using the
first-in, first-out (FIFO) method.

PROPERTY, EQUIPMENT AND DEPRECIATION

          Property and equipment are stated at cost, less accumulated
depreciation. Depreciation is computed primarily by the straight-line
method for financial reporting purposes, based on the estimated useful
lives of the respective assets, and accelerated methods with minimum lives
for income tax purposes.

RETIREMENT PLANS

          The Company sponsors noncontributory, defined benefit plans which
cover all employees of the Company who are covered by collective bargaining
agreements. The plans provide benefits based on an employee's earnings and
years of benefit service.  The Company funds these plans in amounts
consistent with the funding requirements of federal laws and regulations.
As discussed in Note 6, the Company provided additional funding to the
plans during 1998.  The plans' assets are invested in stocks, bonds,
annuities and short-term investments.

          The Company also sponsors defined contribution retirement savings
plans for its employees and has entered into a deferred compensation
agreement with a former officer as described in Note 8.

          The Company provides certain healthcare and life insurance
benefits for eligible retired employees. Postretirement benefits are
accounted for on the accrual basis, during the employee's years of service,
based on the expected cost of providing benefits to that employee and the
employee's beneficiaries and covered dependents.

                                     -28-
<PAGE>
STOCK OPTIONS

          The Company applies the provisions of Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and
related interpretations in accounting for its stock option plan.  Under APB
25, because the exercise price of the Company's employee stock options
equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.

ADVERTISING COSTS

          All advertising costs are expensed in the period in which they
are incurred.

INCOME TAXES

          The Company provides deferred income taxes based on enacted
income tax rates in effect on the dates temporary differences between the
financial reporting and tax bases of assets and liabilities reverse.  The
effect on deferred tax assets and liabilities of a change in income tax
rates is recognized in income in the period that includes the enactment
date.  To the extent that available evidence about the future raises doubt
about the realization of a deferred tax asset, a valuation allowance is
established.

          As disclosed in Note 10, the Company has recorded deferred tax
assets reflecting the benefit of net operating loss carryforwards expiring
in 2010, 2011 and 2012, foreign tax credit carryforwards expiring through
2003, accrued pension and postretirement obligations estimated to be
payable in varying amounts over the next 25 to 30 years and other net
deductible temporary differences.  Realization of the recorded income tax
benefits is dependent on generating sufficient taxable income and foreign
source income prior to expiration of the loss carryforwards and foreign tax
credit carryforwards. Although realization is not assured, management
believes it is more likely than not that all of the deferred tax assets
will be realized.  The amount of the deferred tax asset considered
realizable, however, could be reduced in the near term if estimates of
future taxable income and foreign source income during the carryforward
periods are reduced.

            No provision for income taxes has been made on the accumulated
undistributed earnings of approximately $3,795,000 of the Canadian
subsidiary.  These earnings are intended to be permanently reinvested in
facilities and other assets and have borne income taxes that would offset,
in major part, any tax liability resulting from their distribution.




                                     -29-
<PAGE>
BASIC AND DILUTED EARNINGS PER SHARE

          Basic earnings per share (EPS) is based on the weighted average
number of shares of common stock outstanding during each period.  It
excludes the dilutive effects of additional common shares that would have
been outstanding if the shares, under the Company's stock option plan, had
been issued.  It also excludes the dilutive effect of contingently issuable
shares, outstanding under the Company's restricted stock plan described in
Note 7, to the extent those shares have not yet been vested.  Diluted EPS
includes the effects of the Company's stock options and contingently
issuable shares.  Basic and diluted EPS are retroactively adjusted for
stock dividends and stock splits.

INTEREST RATE AGREEMENTS

            The Company enters into interest rate swap and collar
agreements to reduce the impact of changes in interest rates on its
floating rate borrowings.  Interest rate swap agreements are contracts to
exchange floating rate for fixed rate interest payments over the life of
the agreements without the exchange of the underlying notional amounts.
Interest rate collar agreements limit the Company's interest rates on
floating rate borrowings to a range within a minimum (floor) and a maximum
(cap) interest rate.  The notional amounts of interest rate agreements are
used to measure interest to be paid or received and do not represent the
amount of exposure to credit loss.  The differential paid or received on
interest rate agreements is recognized as an adjustment to interest
expense.

          The counterparty to the Company's interest rate agreements is a
commercial bank with which the Company has other financial relationships.
While the Company is exposed to credit loss in the event of nonperformance
by the counterparty, the Company does not anticipate nonperformance by the
other party, and no material loss would be expected from such non-
performance.

          The Company does not enter into interest rate agreements, or
other derivative financial instruments, for trading purposes.

FOREIGN CURRENCY TRANSLATION

            The financial statements of the Company's Canadian operations,
where the functional currency is the Canadian dollar, are translated at the
exchange rate in effect at year-end for assets and liabilities.  Income and
expense items are translated at the average exchange rate for the year.
Related translation adjustments are reported as a separate component of
accumulated other comprehensive income.  Gains and losses from foreign
currency transactions, which are not significant, are included in current
earnings.

                                     -30-
<PAGE>
NEW ACCOUNTING STANDARDS

          Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income," issued in September 1997, was adopted by
the Company during 1998. SFAS No. 130 requires that all components of
comprehensive income and total comprehensive income be reported in one of
the following: a statement of income and comprehensive income, a statement
of comprehensive income or a statement of stockholders' equity.  The
Company has elected to report comprehensive income in its consolidated
statements of stockholders' equity.  Comprehensive income is comprised of
net income and all changes to stockholders' equity, except those due to
investments by owners and distributions to owners.  For the Company,
components of comprehensive income include net income, the foreign currency
translation adjustment relating to the Company's Canadian operations and
the pension liability adjustment relating to the Company's underfunded
pension plan, as disclosed in Note 8.

          SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information," issued in June 1997 and which supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise," establishes
standards for the way that public companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial
statements issued to the public. It also establishes standards for
disclosures regarding products and services, geographic areas and major
customers.  SFAS No. 131 defines operating segments as components of a
company about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how
to allocate resources and in assessing performance.  Operating segments
which exhibit similar characteristics are permitted to be aggregated into a
single operating segment for financial reporting purposes.  As defined by
SFAS No. 131, the Company has two operating segments, U.S. operations and
Canadian operations, based on management's geographic reporting
responsibilities.  As discussed in the previous "Nature of Operations"
section, all of the Company's products are sold in both the U.S. and
Canada. In addition, the operating segments' production processes, types of
customers, distribution methods, regulatory environment and expected long-
term financial performance are very similar.  Because management believes
aggregation of its two operating segments is consistent with the objective
and basic principles of SFAS No. 131, financial information regarding its
operating segments has been aggregated for financial reporting purposes.
Additional information required to be disclosed by SFAS No. 131 is included
in Note 12.

          SFAS No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits," issued in February 1998, revises employers'
disclosures about pension and other postretirement benefit plans.  It does


                                     -31-
<PAGE>
not change the measurement or recognition of those plans.  SFAS No. 132
standardizes the disclosure requirements to the extent practicable,
requires additional information on changes in the benefit obligations and
fair values of plan assets that will facilitate financial analysis and
eliminates certain disclosures that are no longer as useful as when they
were first required to be presented.  Information required to be disclosed
by SFAS No. 132 is included in Notes 8 and 9.

          SFAS No. 130, 131 and 132 were first effective for the Company's
1998 consolidated financial statements.  As required, prior year
information has been restated to conform to the provisions of the new
standards.  The implementation of these new standards did not affect
results of operations or financial position.

          SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," issued in June 1998, requires companies to recognize all
derivatives contracts as either assets or liabilities in the balance sheet
and to measure them at fair value.  If certain conditions are met, a
derivative may be specifically designated as a hedge, the objective of
which is to match the timing of gain or loss recognition on the hedging
derivative with the recognition of (i) the changes in the fair value of the
hedged asset or liability that are attributable to the hedged risk or (ii)
the earnings effect of the hedged forecasted transaction.  For a derivative
not designated as a hedging instrument, the gain or loss is recognized in
income in the period of change. SFAS No. 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999.

          Historically, the Company has not entered into derivatives
contracts for speculative purposes.  The Company does periodically enter
into interest rate swap and collar agreements to reduce the impact of
changes in interest rates on its floating rate borrowings.  However, the
fair value of such derivatives are not significant.  Accordingly, the
Company does not expect adoption of the new standard on January 1, 2000 to
materially affect its consolidated financial statements.

NOTE 2 - SALE OF FILTER OPERATIONS

          Effective on September 3, 1995, the Company sold its filter
product line assets to CLARCOR Inc. (CLARCOR) of Rockford, Illinois.  The
sale was accounted for as a sale of a portion of a segment of a business.
As part of the sale, the Company and CLARCOR entered into a Transition
Agreement which provided for the Company's manufacture and supply to
CLARCOR of certain filters and filter component parts until certain
manufacturing equipment, located at the Company's Hastings, Michigan plant,
could be moved and set up at CLARCOR's plant facilities.  It also provided
for the reimbursement of certain administrative costs directly related to



                                     -32-
<PAGE>
the manufacture and supply of filters and filter components to CLARCOR.
The transition period was completed during the third quarter of 1996.
Expense reimbursement included in 1996 net sales amounted to $736,000.

          The Transition Agreement also included certain provisions for the
continued distribution (not manufacture) of filter products through the
Company's Canadian subsidiary, at the discretion of CLARCOR.  In early
November 1996, the Company received notification from CLARCOR that this
arrangement would terminate on December 31, 1996.  Related distribution
revenue, included in 1996 net sales, amounted to $1,123,000.

          Total filter sales and estimated operating profit for 1996
approximated $5,992,800 and $525,000, respectively.  The estimated
operating profit, which reflects those operating expenses for which the
Company estimated would not recur as a result of the sale, includes
$625,000 of reduced filter cost of sales resulting from liquidation of LIFO
inventories caused by the elimination of all remaining filter inventory.

          In 1996, during the course of the transition period, the Company
relocated its piston ring packaging operations from Knoxville, Tennessee to
Hastings, Michigan.  The relocation and associated training costs were non-
recurring in nature.  These costs, all of which were incurred during the
first and second quarters of 1996, totaled approximately $468,400 and are
included in "Non-recurring restructuring and relocation costs" in the
accompanying 1996 consolidated statement of income.

          At December 31, 1997, "Other current assets" consisted of
$958,517 held in escrow relating to the sale.  These funds were released
from escrow in September 1998.  Of the total $720,400 employee severance
benefits accrued and expensed in September 1995 relating to the sale,
$457,834 was paid through December 31, 1998, with the remaining $262,566
balance to be paid in monthly payments through 2005.  No other filter-
related assets or liabilities remained at December 31, 1998 and 1997.

NOTE 3 - RESTRUCTURING COSTS

          In December 1996, management and the Board of Directors approved
a restructuring plan designed to significantly reduce operating costs and
provide for a more streamlined and efficient operating structure
concentrating on piston ring manufacturing.  Operating results for 1996,
exclusive of non-recurring restructuring and relocation costs discussed
here and in Note 2, were adversely affected by two major factors.  First,
fulfilling the Company's production and administrative responsibilities
under the filter Transition Agreement, discussed in Note 2, proved more
costly than anticipated.  Second, with the assistance of an outside
corporate consulting firm, management determined that staffing remained at



                                     -33-
<PAGE>
too high of a level throughout the remainder of 1996 based on actual and
anticipated revenues.  These factors, in addition to the CLARCOR
notification discussed in Note 2, precipitated the restructuring plan.

          In addition to reducing staffing levels at both the U.S. and
Canadian manufacturing facilities, the restructuring plan called for the
termination of most Canadian piston ring manufacturing effective April 30,
1997.  The Canadian subsidiary continues to distribute piston rings
throughout Canada, being sourced entirely by U.S. operations.  This
facility also continues to manufacture certain piston ring parts and
provide packaging operations for automotive mechanics' specialty tools and
piston ring sets.

          Total restructuring costs, all recognized in the fourth quarter
of 1996, amounted to $351,500 and are included in "Non-recurring
restructuring and relocation costs" in the accompanying 1996 consolidated
statement of income. Of the total, $247,000 and $104,500 related to
employee severance benefits and consulting fees, respectively, and were
paid during 1996 and 1997.

NOTE 4 - INVENTORIES

          Inventories valued using the LIFO method were $2,654,000 and
$2,272,000 at December 31, 1998 and 1997, respectively.

          If the FIFO method of inventory valuation had been used by the
Company, inventories would have been $1,212,000 and $1,387,000 higher than
reported at December 31, 1998 and 1997, respectively.

          Reduction of inventory quantities in 1998, 1997 and 1996 resulted
in a liquidation of LIFO inventories carried at lower costs prevailing in
prior years as compared to current years' purchases.  The effect of these
reductions increased net income (or reduced the net loss) by $40,000,
$35,000 and $447,300 ($.05, $.05 and $.58 per share, on a diluted basis, as
adjusted for the stock split discussed in Note 13) for 1998, 1997 and 1996,
respectively. Of the $447,300 amount for 1996, $412,500 resulted from the
elimination of all remaining filter inventory during 1996.

NOTE 5 - SHORT-TERM BORROWINGS

            In August 1998, the Company entered into a loan agreement with
its primary lender which provides for an unsecured $6,600,000 term credit
loan (see Note 6) and an unsecured $3,000,000 credit authorization for
revolving credit loans and letters of credit. Under the agreement, the
Company's short-term line with its primary lender was reduced from
$5,000,000 to $3,000,000.  Interest for both the short-term and long-term
borrowings is based on three different pricing options:  a negotiated rate,


                                     -34-
<PAGE>
a Eurodollar rate plus a factor and a floating rate (greater of the federal
funds rate plus a factor or the prime rate).  The effective Eurodollar rate
and floating rate are increased by a margin rate, ranging from 1.50% to
2.00%, which is based upon certain Company performance parameters.  The
Company maintains two additional unsecured lines of credit with banks
aggregating $2,200,000, with interest rates based on prime.  Of the
$5,200,000 total short-term lines available to the Company at December 31,
1998, $2,900,000 was unused.

          At December 31, 1997, the Company maintained unsecured lines of
credit with various banks aggregating $4,700,000 with interest at
negotiated rates based upon prime or LIBOR.  Available borrowings amounted
to $1,300,000 at December 31, 1997.

          The weighted average interest rate on short-term borrowings
outstanding at December 31, 1998 and 1997 was 9.10% and 8.25%,
respectively.  The interest rate on short-term borrowings in effect at
December 31, 1998 was unusually high as it is based on the federal funds
interest rate which typically increases as of the last day of the calendar
year.  The weighted average interest rate on the Company's short-term
borrowings for the seven-day period preceding December 31, 1998 was 7.4%.

NOTE 6 - LONG-TERM DEBT

          As discussed in Note 5, the Company restructured its short-term
and long-term borrowing arrangements in August 1998.  The entire $6,600,000
under the term loan portion of the new loan agreement was borrowed and was
used to additionally fund the Company's defined benefit plans, to pay off
the previously outstanding long-term debt and, as discussed in Note 5, to
reduce short-term notes payable.  The additional funding to the Company's
defined benefit plans resulted in the $2,675,688 prepaid pension asset in
the accompanying consolidated balance sheets at December 31, 1998.  The
term loan is payable in quarterly principal payments of $330,000, plus
interest based on the pricing options discussed in Note 5.  In connection
with the $6,600,000 term loan, the Company entered into an interest rate
swap agreement essentially to fix the interest rate on these long-term
borrowings at 5.95% plus the margin, discussed in Note 5, resulting in an
interest rate range of 7.45% to 7.95%.  At December 31, 1998, the interest
rate in effect on these long-term borrowings was 7.70% and the notional
amount of the swap agreement amounted to $5,940,000.  Of the $5,940,000
outstanding long-term debt balance at December 31, 1998, $1,320,000 is due
in 1999.  Remaining maturities are $1,320,000 annually for the years 2000
through 2002 with the $660,000 balance due in 2003.

          The term loan agreement requires the Company to maintain certain
financial balances and ratios and limits the amount of cash dividends.
Unrestricted retained earnings under the agreement amounted to $2,618,277
at December 31, 1998.

                                     -35-
<PAGE>
          In March 1996, the Company terminated its interest rate swap
agreement related to its floating rate borrowings outstanding at the time,
receiving $204,500 from the bank as a result of favorable interest rates.
This amount is included in "Other, net" in the accompanying 1996
consolidated statement of income.  At the same time, in order to continue
to limit its interest rate exposure, the Company entered into an interest
rate collar agreement which was in effect until the August 1998 debt
restructuring discussed above.  The collar agreement provided for a cap
rate on floating rate borrowings of 8.25% and a related floor of 6.75%.

          At December 31, 1997, the Company had outstanding long-term debt
totaling $2,028,125, with $1,462,500 due in 1998, under two term loans
payable in quarterly installments through May 1999.  Interest on these
borrowings was based on LIBOR.  As discussed above, these borrowings were
paid off with the proceeds of the August 1998 borrowing.

NOTE 7 - STOCKHOLDERS' EQUITY

STOCKHOLDERS' RIGHTS PLAN

         On February 13, 1996, the Company's Board of Directors authorized
the adoption of a Series A Preferred Stock Purchase Rights Plan (Plan).
Under the Plan, a dividend distribution of one Series A Preferred Stock
Purchase Right (Right) was made for each outstanding share of common stock,
payable to shareholders of record on March 8, 1996.  The Plan is designed
to protect shareholders against unsolicited attempts to acquire control of
the Company in a manner that does not offer a fair price to all
shareholders.  In addition, it is intended to help protect and preserve
ownership of the Company's principal tradenames and trademarks.

          Each Right entitles shareholders to purchase one one-hundredth of
a share of preferred stock from the Company at a price of $100 per share,
subject to adjustment.  The Rights will become exercisable only if a person
or group (Acquiring Person) acquires 15% or more of the Company's common
stock or announces a tender offer that would result in ownership of 30% or
more of the common stock.  A person beneficially owning 15% or more of the
outstanding shares of common stock on February 13, 1996, or any affiliates
or associates thereof, do not constitute an Acquiring Person under the
Plan.

          The Company's Series A Preferred Stock consists of 500,000 shares
authorized, at $2 par value, none of which are issued.  Shares of preferred
stock are reserved at a level sufficient to permit the exercise in full of
all the outstanding Rights.  Under terms specified in the Plan, the Company
has the right to redeem the Rights at one cent per Right.




                                     -36-
<PAGE>
STOCK OPTION PLAN

            The Company's Stock Option and Restricted Stock Plan of 1997
permits the grant of options to directors, officers and key employees to
purchase shares of common stock.  A total of 38,000 shares (all share and
option amounts adjusted for the two-for-one stock split discussed in Note
13) are authorized for grant under the plan.  During both 1998 and 1997,
12,850 options were granted under the plan.  The options, which were
immediately vested upon grant, may be exercised for up to ten years after
the date of the grant.

          A summary of activity for the plan is as follows:

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                                  1998                                 1997
                                        -------------------------             ------------------------
                                                         WEIGHTED                             WEIGHTED
                                                         AVERAGE                              AVERAGE
                                                         EXERCISE                             EXERCISE
                                        SHARES            PRICE               SHARES           PRICE
                                        ------           --------             ------          --------
<S>                                    <C>             <C>                   <C>             <C>
Options outstanding,
   beginning of year                    12,850          $ 20.125                   -          $     -
Granted                                 12,850            18.250              12,850           20.125
Exercised                                    -                 -                   -                -
Terminated                              (1,700)           20.125                   -                -
                                        ------          --------              ------          -------
Options outstanding,
   end of year                          24,000          $ 19.121              12,850          $20.125
                                        ======          ========              ======          =======

Options exercisable,
   end of year                          11,150          $ 20.125                   -          $     -
                                        ======          ========              ======          =======

Options available for
   grant, end of year                   14,000                                25,150
                                        ======                                ======
</TABLE>

          The Company has adopted the disclosure-only provisions of SFAS
No. 123, "Accounting For Stock-Based Compensation," relating to its stock
option plan. Accordingly, no compensation cost has been recognized.  Had
compensation cost for the Company's stock options been determined based on


                                     -37-
<PAGE>
their fair values at the grant dates consistent with the provisions of SFAS
No. 123, the Company's net income and earnings per share, on a diluted
basis, would have been reduced to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                           YEAR ENDED DECEMBER 31,
                                             1998            1997
                                          ----------       --------
<S>   <C>                                <C>              <C>
       Net income - as reported           $1,730,427       $955,233
       Net income - pro forma              1,654,919        871,533

       Earnings per share on a
         diluted basis - as reported            2.24           1.24
       Earnings per share on a
         diluted basis - pro forma              2.14           1.13
                                          ==========       ========
</TABLE>

            The weighted average fair values per option at the date of
grant for options granted under the plan during 1998 and 1997 was $6.17 and
$7.32, respectively. The fair values of the option awards were estimated
using the Black-Scholes option-pricing model with the following weighted-
average assumptions:

<TABLE>
<CAPTION>
                                           YEAR ENDED DECEMBER 31,
                                             1998            1997
                                          ----------       --------
<S>   <C>                                <C>              <C>
       Dividend yield                        1.50%           1.50%
       Expected volatility                  35.98%          34.00%
       Risk-free interest rate               4.51%           5.71%
       Expected life in years                5.00            5.00
                                            =====           =====
</TABLE>

RESTRICTED STOCK PLAN

          The Company has established a restricted stock plan under which
certain officers and key employees may be awarded shares of restricted
stock as deferred compensation.  Shares awarded pursuant to the plan are
restricted as to sale and transfer for periods of up to five years.  The
stock awards vest 20% per year over the five-year period if predetermined
corporate performance goals are met.  If goals are not met, the current


                                     -38-
<PAGE>
year's vesting amount is forfeited.  If there is a change in control of the
Company, the shares will vest immediately.  The recipient of the award has
all the rights of a shareholder, provided that all performance goals are
met.  During 1998, 1997 and 1996, the Company awarded 10,600, 5,000 and
5,600 shares, respectively, of its common stock valued at $219,700, $68,438
and $71,400, respectively, as deferred compensation which is charged to
expense based upon the vesting schedule and upon achievement of the
performance goals.  Shares valued at $21,402 (1,700 shares), $62,506 (4,650
shares) and $47,862 (2,950 shares) were forfeited during 1998, 1997 and
1996, respectively.  Share amounts have been adjusted for the stock split
discussed in Note 13.






































                                     -39-
<PAGE>
NOTE 8 - PENSION AND RETIREMENT SAVINGS

          Information regarding the Company's defined benefit plans as of
and for the years ended December 31, 1998, 1997 and 1996 is as follows:

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                                 1998                1997                  1996
                                              -----------         -----------           -----------
<S>                                          <C>                 <C>                   <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation, beginning of year         $16,999,923         $16,361,101           $16,902,042
Service cost                                       10,403              14,073                23,316
Interest cost                                   1,127,711           1,187,023             1,177,904
Actuarial (gain) loss                             198,040             898,019              (314,453)
Benefits paid                                  (1,480,157)         (1,460,293)           (1,427,708)
                                              -----------         -----------           -----------
Benefit obligation, end of year                16,855,920          16,999,923            16,361,101
                                              -----------         -----------           -----------

CHANGE IN PLAN ASSETS
Fair value of plan assets, beginning of year   13,407,163          12,729,054            12,083,154
Actual return on plan assets                    1,118,034           1,815,742             1,134,411
Employer contributions                          3,727,181             322,826               936,389
Benefits paid                                  (1,480,157)         (1,460,459)           (1,424,900)
                                              -----------         -----------           -----------
Fair value of plan assets, end of year         16,772,221          13,407,163            12,729,054
                                              -----------         -----------           -----------
Funded status                                     (83,699)         (3,592,760)           (3,632,047)
Unrecognized actuarial loss                     2,147,995           2,168,785             2,253,620
Unrecognized transition
 obligation                                      611,392             815,189             1,018,986
                                              -----------         -----------           -----------
Net amount recognized in the
  consolidated balance sheets                 $ 2,675,688         $  (608,786)          $  (359,441)
                                              ===========         ===========           ===========

AMOUNTS RECOGNIZED IN THE
  CONSOLIDATED BALANCE SHEETS
Prepaid pension cost                          $ 2,675,688         $         -           $         -
Pension obligation                             (2,371,644)         (2,981,065)           (2,745,228)
Accrued pension plan contribution                       -            (608,786)             (359,441)
Intangible asset                                  564,949             815,189               941,583
Accumulated other comprehensive
  income, before tax effect                     1,806,695           2,165,876             1,803,645
                                              -----------         -----------           -----------


                                     -40-
<PAGE>
Net amount recognized in the
  consolidated balance sheets                 $ 2,675,688         $  (608,786)          $  (359,441)
                                              ===========         ===========           ===========

WEIGHTED-AVERAGE ASSUMPTIONS AS OF
  DECEMBER 31
Discount rate                                        6.75%               7.00%                 7.50%
Expected return on plan assets                       8.00%               8.00%                 8.00%
Range of expected compensation
 increase                                          0-5.5%              0-5.5%                0-5.5%


COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost                                  $    10,403         $    14,073           $    23,316
Interest cost                                   1,127,711           1,187,023             1,177,904
Expected return on plan assets                 (1,052,551)           (946,392)             (914,140)
Amortization of unrecognized
  transition obligation                           203,797             203,797               203,797
Amortization of unrecognized
  net loss                                        153,347             113,670               145,566
                                              -----------         -----------           -----------
Net periodic benefit cost                     $   442,707         $   572,171           $   636,443
                                              ===========         ===========           ===========
</TABLE>

          The above represents the aggregation of amounts for the Company's
two defined benefit plans.  As of December 31, 1998, one of the plans had
an accumulated benefit obligation in excess of plan assets.  For that plan,
the benefit obligation and accumulated benefit obligation, which are equal,
amounted to $14,888,810 and the fair value of plan assets amounted to
$14,659,752.

          The Company's foreign subsidiary maintains a defined contribution
retirement savings plan.  Due to overfunding of the plan, there were no
contributions in 1998, 1997 and 1996.

          The Company has two defined contribution retirement savings
plans, covering substantially all domestic employees, which are funded
solely through contributions based on formulas as defined in the plan
agreements.  The assets are held in trust for the sole benefit of the
employees.  Contribution expense was $668,000, $569,000 and $656,000 for
1998, 1997 and 1996, respectively, relating to these plans.

          As part of the sale of its filter operations, as described in
Note 2, the Company entered into a deferred compensation agreement with a
former officer of the Company.  The deferred compensation benefits are to
be paid over a period of ten years, commencing in November 1995.  Deferred


                                     -41-
<PAGE>
compensation expense, representing the present value of future payments,
amounted to $343,450 in 1995 and was included as a cost of the filter
operations sale.  At December 31, 1998 and 1997, respectively, the deferred
compensation liability amounted to $262,566 and $290,347, of which $30,086
and $27,780 was due within one year.

NOTE 9 - POSTRETIREMENT BENEFIT PLANS

            Information regarding the Company's postretirement benefit
plans as of and for the years ended December 31, 1998, 1997 and 1996 is as
follows:

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                                 1998                1997                  1996
                                              -----------         -----------           -----------
<S>                                         <C>                 <C>                   <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation, beginning of year        $  9,824,296        $ 18,801,763          $ 19,437,103
Service cost                                       49,855              93,153               216,106
Interest cost                                     669,152             851,571             1,350,383
Amendment                                               -          (7,346,249)                    -
Actuarial (gain) loss                             298,894          (1,251,069)             (656,325)
Benefits paid                                    (949,725)         (1,324,872)           (1,545,504)
                                             ------------        ------------          ------------
Benefit obligation, end of year              $  9,892,472        $  9,824,297          $ 18,801,763
                                             ============        ============          ============

Funded status                                $ (9,892,472)       $ (9,824,297)         $(18,801,763)
Unrecognized prior service benefit
  relating to 1997 plan amendment              (6,465,014)         (6,968,577)                    -
Unrecognized actuarial loss                       662,556             363,662             1,614,731
                                             ------------        ------------          ------------
Net amount recognized in the
  consolidated balance sheets                 (15,694,930)        (16,429,212)          (17,187,032)
Less current portion                           (1,044,175)         (1,110,442)           (1,641,040)
                                             ------------        ------------          ------------

Long-term portion                            $(14,650,755)       $(15,318,770)         $(15,545,992)
                                             ============        ============          ============

WEIGHTED-AVERAGE DISCOUNT RATE
  ASSUMPTION AS OF DECEMBER 31                       6.75%               7.00%                 7.50%
                                             ============        ============          ============




                                     -42-
<PAGE>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost                                 $     49,855        $     93,153          $    216,106
Interest cost                                     669,152             851,571             1,350,383
Amortization of unrecognized
  prior service cost                             (503,563)           (377,672)                    -
Amortization of unrecognized
  net loss                                              -                   -                49,072
                                             ------------        ------------          ------------
Net periodic benefit cost                    $    215,444        $    567,052          $  1,615,561
                                             ============        ============          ============
</TABLE>

          Because the Company's contributions to the plans are fixed on a
per active and retired employee basis, assumed inflationary increases or
decreases in health care costs would have no impact on the postretirement
benefit obligation at December 31, 1998, or on the future annual aggregate
service and interest costs.

          In early April 1997, the Company announced the amendment of its
postretirement benefit plans, principally to adjust the cost-sharing
provisions.  The amendment resulted in a reduction of the Company's
accumulated postretirement benefit obligation by $7,346,249, which created
an unrecognized prior service benefit.  Net periodic postretirement benefit
cost for 1997, including amortization of the unrecognized prior service
benefit over a period of 15 years, was reduced by approximately $1,050,000
(approximately $870,000 related to "Cost of Sales" and $180,000 related to
"General and Administrative" expenses) as a result of the plan amendment.
In early 1998, the Company received a letter from legal representatives of
its bargaining unit retirees requesting a meeting with Company management
and legal counsel to discuss the Company's legal obligation to provide the
postretirement benefits at the pre-amendment level.  While negotiations
continue as of the date of this report, management believes that adjustments
to the plans, if any, will not have a material effect on the financial
position or results of operations of the Company.


NOTE 10 - INCOME TAXES

          The components of income (loss) before income taxes are as
follows:









                                     -43-
<PAGE>
<TABLE>
<CAPTION>
                                             YEAR ENDED DECEMBER 31,
                                    1998             1997               1996
                                 ----------       ----------         -----------
<S> <C>                         <C>              <C>                <C>
     Domestic                    $2,717,888       $1,648,915         $(1,087,158)
     Foreign                         66,539          (71,682)           (150,685)
                                 ----------       ----------         -----------

                                 $2,784,427       $1,577,233         $(1,237,843)
                                 ==========       ==========         ===========
</TABLE>

          Income tax expense (benefit) is made up of the following
components:

<TABLE>
<CAPTION>
     Year ended December 31, 1998
                                                        DEFERRED-
                                                        VALUATION
                                                        ALLOWANCE
                       CURRENT         DEFERRED          CHANGE           TOTAL
                       --------        ---------        ---------       ---------
<S> <C>               <C>             <C>              <C>             <C>
     Domestic          $ 68,000        $ 985,000        $       -       $1,026,000
     Foreign             31,000           (3,000)               -           28,000
                       --------        ---------        ---------       ----------
                       $ 99,000        $ 955,000        $       -       $1,054,000
                       ========        =========        =========       ==========

     Year ended December 31, 1997

     Domestic          $ 39,000        $ 602,000        $       -       $ 641,000
     Foreign             (8,000)         (11,000)               -         (19,000)
                       --------        ---------        ---------       ---------
                       $ 31,000        $ 591,000        $       -       $ 622,000
                       ========        =========        =========       =========

     Year ended December 31, 1996

     Domestic          $ 54,000        $(399,000)       $  40,000       $(305,000)
     Foreign            (37,000)         (11,000)               -         (48,000)
                       --------        ---------        ---------       ---------
                       $ 17,000        $(410,000)       $  40,000       $(353,000)
                       ========        =========        =========       =========
</TABLE>

                                     -44-
<PAGE>
          The tax effects of temporary differences that give rise to the
net future income tax benefit are as follows:

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                       1998             1997
                                                    ----------       ----------
<S>  <C>                                           <C>              <C>
      Deferred income tax assets:
        Postretirement benefit
          obligation                                $5,336,277       $5,625,932
        Pension obligation                                   -          886,652
        Current asset valuation
          allowances                                   751,214          736,138
        Net operating loss carryforwards             1,206,318          796,643
        Foreign tax credit carryforwards               316,924          304,659
        Deferred compensation                           89,268           98,718
        Other                                          293,393          273,295
                                                    ----------       ----------

      Total deferred income tax assets               7,993,394        8,722,037
                                                    ----------       ----------

      Deferred income tax liabilities:
        Accumulated depreciation                      (437,023)        (374,306)
        Prepaid pension costs                         (280,229)               -
        Other                                         (160,649)        (167,121)
                                                    ----------       ----------

      Total deferred income tax liabilities           (877,901)        (541,427)
                                                    ----------       ----------

      Net deferred income tax assets                 7,115,493        8,180,610
      Less current portion                           2,395,856        2,351,687
                                                    ----------       ----------

      Noncurrent portion                            $4,719,637       $5,828,923
                                                    ==========       ==========
</TABLE>

          The Company's net operating loss carryforwards for federal income
tax purposes amounted to $3,547,994 at December 31, 1998, of which $686,098
expires in 2010, $100,185 in 2011 and $2,761,711 in 2012, if not previously
utilized. Foreign tax credits, amounting to $316,924 at December 31, 1998,
expire through 2003, if not previously utilized.



                                     -45-
<PAGE>
          Income taxes differed from the amount computed by applying the
federal statutory rate of 34% to income before income tax expense (benefit)
as follows:

<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                                                       1998             1997               1996
                                                     ----------       --------           ---------
<S>   <C>                                           <C>              <C>                <C>
       Computed "expected" tax
         (benefit)                                   $  947,000       $536,000           $(421,000)
       Increase (decrease) in
         tax resulting from:
         Valuation allowance change
           due to foreign tax credits                         -              -              40,000
         State income taxes, net of
           federal income tax
           benefit                                       38,000         44,000              36,000
         Other                                           69,000         42,000              (8,000)
                                                     ----------       --------           ---------

                                                     $1,054,000       $622,000           $(353,000)
                                                     ==========       ========           =========
</TABLE>

NOTE 11 - EARNINGS PER SHARE

          A reconciliation of the numerators and denominators in the basic
and diluted EPS calculations follows:



















                                     -46-
<PAGE>
<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                                1998               1997              1996
                                             ----------          --------          ---------
<S>                                         <C>                 <C>                   <C>
Numerator:
  Net income (loss) used for
    both basic and diluted
    EPS calculation                          $1,730,427          $955,233          $(884,843)
                                             ==========          ========          =========
Denominator:
  Weighted average shares
    outstanding for the
    period - used for basic
    EPS calculation                             771,496           768,516            768,516
  Dilutive effect of stock
    options and contingently
    issuable shares                               1,198               164                  -
                                             ----------          --------          ---------
  Weighted average shares
    outstanding for the
    period - used for diluted
    EPS calculation                             772,694           768,680            768,516
                                             ==========          ========          =========
</TABLE>

          All outstanding shares have been adjusted for the two-for-one
stock split discussed in Note 13.

NOTE 12 - GEOGRAPHIC AND MAJOR CUSTOMER INFORMATION

          The Company's net sales were made to customers in the following
countries:

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                1998              1997             1996
                                             -----------       -----------       -----------
<S>                                         <C>               <C>               <C>
  United States                              $29,178,656       $26,592,046       $28,982,205
  Canada                                       4,101,109         4,552,463         5,004,885
  Other foreign countries                      5,472,339         4,430,445         5,421,520
                                             -----------       -----------       -----------

Consolidated total                           $38,752,104       $35,574,954       $39,408,610
                                             ===========       ===========       ===========
</TABLE>
                                     -47-
<PAGE>
          The location of the Company's long-lived assets is as follows:

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                1998              1997             1996
                                             -----------       -----------       -----------
<S>                                         <C>               <C>               <C>
  United States                              $ 7,781,410       $ 7,098,006       $ 6,754,303
  Canada                                       1,221,678         1,218,894         1,182,137
                                             -----------       -----------       -----------

Consolidated total                           $ 9,003,088       $ 8,316,900       $ 7,936,440
                                             ===========       ===========       ===========
</TABLE>

          Net sales to one customer represented approximately $3,874,000,
$3,180,000 and $3,155,000 of the Company's consolidated sales for 1998,
1997 and 1996, respectively.

NOTE 13 - STOCK SPLIT

          On February 17, 1997, the Board of Directors authorized a two-
for-one stock split, effected in the form of a stock dividend, effective
March 23, 1997, payable to shareholders of record on March 2, 1997.  On a
split basis, the Company had 780,626 shares outstanding at December 31,
1997.  An amount equal to the par value of the common shares issued will be
transferred from retained earnings to common stock to effect the stock
split.  This transfer has been reflected in the consolidated statements of
stockholders' equity at December 31, 1997.  All references to number of
common shares, except shares authorized, and to all per share information
have been adjusted to reflect the stock split on a retroactive basis.

















                                     -48-
<PAGE>




Report of Independent Certified Public Accountants




Hastings Manufacturing Company
Hastings, Michigan

          We have audited the accompanying consolidated balance sheets of
Hastings Manufacturing Company and subsidiaries as of December 31, 1998 and
1997, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended
December 31, 1998. These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

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

          In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Hastings Manufacturing Company and subsidiaries at December 31, 1998 and
1997, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles.



/s/BDO Seidman, LLP
BDO Seidman, LLP
Grand Rapids, Michigan
February 26, 1999




                                     -49-
<PAGE>
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

          Not applicable.

                                 PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

          The information required by this item is incorporated herein by
reference from the sections entitled "Directors and Executive Officers" and
"Section 16(a) Beneficial Ownership Reporting Compliance" in the Registrant's
definitive proxy statement relating to its Annual Meeting of Shareholders
to be held May 4, 1999.

ITEM 11.  EXECUTIVE COMPENSATION.

          The information required by this item is incorporated herein by
reference from the sections entitled "Compensation of Directors," "Executive
Compensation," and "Deferred Compensation" and in the Registrant's
definitive proxy statement relating to its Annual Meeting of Shareholders
to be held May 4, 1999.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

          The information required by this item is incorporated herein by
reference from the section entitled "Voting Securities" in the Registrant's
definitive proxy statement relating to its Annual Meeting of Shareholders
to be held May 4, 1999.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          The information required by this item, if any, is incorporated
herein by reference from the sections entitled "Directors and Executive
Officers" and "Compensation Committee Interlocks and Insider Participation"
in the Registrant's definitive proxy statement relating to its Annual
Meeting of Shareholders to be held May 4, 1999.












                                     -50-
<PAGE>
                                  PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     ITEM 14(a)1.   FINANCIAL STATEMENTS.

     (A)  The following financial statements are filed as part of this
document in Item 8, "Financial Statements and Supplementary Data."

                                                                        PAGE
     Consolidated Balance Sheets as of December 31, 1998 and 1997       14-15
     Consolidated Statements of Income for the years ended
        December 31, 1998, 1997 and 1996                                16
     Consolidated Statements of Stockholders' Equity for the years
        ended December 31, 1998, 1997 and 1996                          17
     Consolidated Statements of Cash Flows for the years ended
        December 31, 1998, 1997 and 1996                                18-19
     Notes to Consolidated Financial Statements                         20-36
     Report of Independent Certified Public Accountants                 37

     (B)  Financial Statement Schedule

     Report of Independent Certified Public Accountants                 46
     Schedule II - Valuation and Qualifying Accounts                    47

     ITEM 14(a)2.   FINANCIAL STATEMENT SCHEDULES.

          The Financial Statement Schedule set forth in the Index to
Financial Statement Schedules hereto is filed as a part of this Form 10-K
Report.

     ITEM 14(a)3.   EXHIBITS.

NUMBER

3(a)      Amended Articles of Incorporation of Hastings Manufacturing
          Company, filed as an exhibit to the Form 10-Q Quarterly Report
          for the period ended September 30, 1998, are here incorporated by
          reference.

3(b)      Bylaws of Hastings Manufacturing Company, filed as an exhibit to
          the Form S-8 Registration Statement (File No. 333-74489) filed
          on March 16, 1999, are here incorporated by reference.






                                     -51-
<PAGE>
4(a)      NBD Bank Amended and Restated Letter Agreement for $6,600,000
          Term Loan and $3,000,000 Credit Authorization to Make Revolving
          Credit Loans and Issue Letters of Credit dated August 28, 1998,
          filed as an exhibit to the Form 10-Q Quarterly Report for the
          period ended September 30, 1998, is here incorporated by
          reference.

4(b)      Restated Master Agreement dated August 10, 1998, regarding an
          interest rate swap transaction between Hastings Manufacturing
          Company and NBD Bank, filed as an exhibit to the Form 10-Q
          Quarterly Report for the period ended September 30, 1998, is here
          incorporated by reference.

4(c)      Commercial Line of Credit Agreement and Note, dated as of January
          23, 1998, between Hastings Manufacturing Company and Hastings
          City Bank, filed as an exhibit to the Form 10-Q Quarterly Report
          for the period ended June 30, 1998, is here incorporated by
          reference.

4(d)      Preferred Stock Purchase Rights Plan, filed as an exhibit to Form
          8-K filed with the Securities and Exchange Commission on February
          15, 1996, is here incorporated by reference.

4(e)      Confirmation, dated as of March 12, 1996, regarding an interest
          rate collar transaction between Hastings Manufacturing Company
          and NBD Bank, filed as an exhibit to the Form 10-K Annual Report
          for the year ended December 31, 1996, is here incorporated by
          reference.

10(a)     List of Recipients of Indemnity Agreement and Form of Indemnity
          Agreement.

10(b)     1990 Restricted Stock Plan.<F1>

10(c)     Asset Purchase Agreement between Hastings Manufacturing Company
          and CLARCOR Inc. dated as of September 3, 1995, filed as an
          exhibit to the Form 8-K filed with the Securities and Exchange
          Commission on September 20, 1995, is incorporated herein by
          reference.

10(d)     Transition Agreement, dated September 3, 1995, among Hastings
          Filters, Inc., Hastings Manufacturing Company and Hastings, Inc.
          and joined in by CLARCOR Inc., filed as an exhibit to the Form
          10-Q Quarterly Report for the period ended September 30, 1997, is
          incorporated herein by reference.




                                     -52-
<PAGE>
10(e)     Stock Option and Restricted Stock Plan of 1997, filed as Exhibit
          A to the Company's Proxy Statement for its 1998 annual Meeting,
          is here incorporated by reference.<F1>

10(f)     Form of Incentive Stock Option Agreement for use under the 1997
          Stock Option and Restricted Plan of 1997.<F1>

10(g)     Form of Nonqualified Stock Option Agreement for use under the
          Stock Option and Restricted Stock Plan of 1997.<F1>

21        Subsidiaries of Hastings Manufacturing Company.

23        Consent of BDO Seidman, LLP

24        Powers of Attorney

27        Financial Data Schedule as of December 31, 1998 and for the year
          then ended.

---------------------
     <F1> Management contract or compensatory plan or arrangement.




     ITEM 14(b).    REPORTS ON FORM 8-K.

          No reports on Form 8-K were filed during the fourth quarter of
1998.




















                                     -53-
<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
on Form 10-K to be signed below on its behalf by the undersigned, thereunto
duly authorized.

                                   HASTINGS MANUFACTURING COMPANY
                                        (registrant)


Dated: March 31, 1999              By /S/ THOMAS J. BELLGRAPH
                                      Thomas J. Bellgraph
                                      Its Vice President, Finance
                                          (Principal Financial and
                                          Accounting Officer)

































                                     -54-
<PAGE>
          Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated below (such
persons constituting a majority of the board of directors).

     SIGNATURE                     TITLE                    DATE


/S/ ANDREW F. JOHNSON         Co-Chief Executive       March 31, 1999
Andrew F. Johnson             Officer, President/
                              Operations and
                              Director

/S/ MARK R. S. JOHNSON        Co-Chief Executive       March 31, 1999
Mark R. S. Johnson            Officer, President/
                              Marketing and
                              Director

*/S/ DALE W. KOOP              Director                March 31, 1999
Dale W. Koop


*/S/ MONTY C. BENNETT         Director                 March 31, 1999
Monty C. Bennett


*/S/ DOUGLAS A. DECAMP        Director                 March 31, 1999
Douglas A. DeCamp


________________________      Director                 March __, 1999
William R. Cook


*/S/ NEIL A. GARDNER          Director                 March 31, 1999
Neil A. Gardner


*/S/ RICHARD L. FOSTER        Director                 March 31, 1999
Richard L. Foster


*By /S/ THOMAS J. BELLGRAPH
Thomas J. Bellgraph
Attorney In Fact




                                     -55-
<PAGE>
                      HASTINGS MANUFACTURING COMPANY

                             AND SUBSIDIARIES


                       FINANCIAL STATEMENT SCHEDULES

                           FORM 10-K ITEM 14(a)2


                       YEAR ENDED DECEMBER 31, 1998






































                                     -56-
<PAGE>
                      HASTINGS MANUFACTURING COMPANY
                             AND SUBSIDIARIES

                  INDEX TO FINANCIAL STATEMENT SCHEDULES


                                                                       PAGE


Report of Independent Certified Public Accountants
on Financial Statement Schedule                                          46


Schedule:

     II - Valuation and Qualifying Accounts                              47


     Other schedules have been omitted because they were inapplicable or
otherwise not required.





























                                     -57-
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE


Hastings Manufacturing Company
Hastings, Michigan


The audits referred to in our report dated February 26, 1999 relating to
the consolidated financial statements of Hastings Manufacturing Company and
subsidiaries, which is contained in Item 8 of this Form 10-K, included the
audit of the financial statement schedule listed in the accompanying index.
This financial statement schedule is the responsibility of the Company's
management.  Our responsibility is to express an opinion on this financial
statement schedule based upon our audits.

In our opinion, such financial statement schedule presents fairly, in all
material respects, the information set forth therein.




/s/ BDO Seidman, LLP
BDO Seidman, LLP
Grand Rapids, Michigan
February 26, 1999























                                     -58-
<PAGE>
<TABLE>
                          HASTINGS MANUFACTURING COMPANY AND SUBSIDIARIES
                          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>


COLUMN A                            COLUMN B             COLUMN C             COLUMN D       COLUMN E
--------                           ----------    ------------------------    -----------    ----------

                                                        ADDITIONS
                                                 ------------------------
                                   BALANCE AT    CHARGED TO    CHARGED TO                   BALANCE AT
                                   BEGINNING      COSTS AND      OTHER       DEDUCTIONS/      END OF
DESCRIPTION                        OF PERIOD      EXPENSES      ACCOUNTS     WRITE-OFFS       PERIOD
-----------                        ----------    ----------    ----------    -----------    ----------
<S>                                 <C>            <C>          <C>            <C>           <C>
                                       $              $            $               $             $
Year Ended December 31, 1998:

   Allowance for possible
   losses and receivables            215,000        458,400          --         463,500       210,000
                                     =======        =======       =======       =======       =======
Year Ended December 31, 1997:

   Allowance for possible
   losses on receivables             215,000         36,000          --          36,000       215,000
                                     =======        =======       =======       =======       =======
Year Ended December 31, 1996:

   Allowance for possible
   losses on receivables             225,000          5,300          --          15,300       215,000
                                     =======        =======       =======       =======       =======
</TABLE>
















                                     -59-
<PAGE>
                               EXHIBIT INDEX

NUMBER


3(a)      Amended Articles of Incorporation of Hastings Manufacturing
          Company, filed as an exhibit to the Form 10-Q Quarterly Report
          for the period ended September 30, 1998, are here incorporated by
          reference.

3(b)      Bylaws of Hastings Manufacturing Company, filed as an exhibit to
          the Form S-8 Registration Statement (File No. 333-74489) filed
          on March 16, 1999, are here incorporated by reference.

4(a)      NBD Bank Amended and Restated Letter Agreement for $6,600,000
          Term Loan and $3,000,000 Credit Authorization to Make Revolving
          Credit Loans and Issue Letters of Credit dated August 28, 1998,
          filed as an exhibit to the Form 10-Q Quarterly Report for the
          period ended September 30, 1998, is here incorporated by
          reference.

4(b)      Restated Master Agreement dated August 10, 1998, regarding an
          interest rate swap transaction between Hastings Manufacturing
          Company and NBD Bank, filed as an exhibit to the Form 10-Q
          Quarterly Report for the period ended September 30, 1998, is here
          incorporated by reference.

4(c)      Commercial Line of Credit Agreement and Note, dated as of January
          23, 1998, between Hastings Manufacturing Company and Hastings
          City Bank, filed as an exhibit to the Form 10-Q Quarterly Report
          for the period ended June 30, 1998, is here incorporated by
          reference.

4(d)      Preferred Stock Purchase Rights Plan, filed as an exhibit to Form
          8-K filed with the Securities and Exchange Commission on February
          15, 1996, is here incorporated by reference.

4(e)      Confirmation, dated as of March 12, 1996, regarding an interest
          rate collar transaction between Hastings Manufacturing Company
          and NBD Bank, filed as an exhibit to the Form 10-K Annual Report
          for the year ended December 31, 1996, is here incorporated by
          reference.

10(a)     List of Recipients of Indemnity Agreement and Form of Indemnity
          Agreement.

10(b)     1990 Restricted Stock Plan.<F1>


                                     -60-
<PAGE>
10(c)     Asset Purchase Agreement between Hastings Manufacturing Company
          and CLARCOR Inc. dated as of September 3, 1995, filed as an
          exhibit to the Form 8-K filed with the Securities and Exchange
          Commission on September 20, 1995, is incorporated herein by
          reference.

10(d)     Transition Agreement, dated September 3, 1995, among Hastings
          Filters, Inc., Hastings Manufacturing Company and Hastings, Inc.
          and joined in by CLARCOR Inc., filed as an exhibit to the Form
          10-Q Quarterly Report for the period ended September 30, 1997, is
          incorporated herein by reference.

10(e)     Stock Option and Restricted Stock Plan of 1997, filed as Exhibit
          A to the Company's Proxy Statement for its 1998 annual Meeting,
          is here incorporated by reference.<F1>

10(f)     Form of Incentive Stock Option Agreement for use under the 1997
          Stock Option and Restricted Plan of 1997.<F1>

10(g)     Form of Nonqualified Stock Option Agreement for use under the
          Stock Option and Restricted Stock Plan of 1997.<F1>

21        Subsidiaries of Hastings Manufacturing Company.

23        Consent of BDO Seidman, LLP

24        Powers of Attorney

27        Financial Data Schedule as of December 31, 1997 and for the year
          then ended.

---------------------
     <F1> Management contract or compensatory plan or arrangement.













                                     -61-