EXHIBIT 10.7
                                                           FORM 10-Q
                                         QUARTER ENDED JUNE 30, 2000


                                         Bucyrus International, Inc.
                                P.O. Box 500 . 1100 Milwaukee Avenue
                          South Milwaukee, Wisconsin, 53172-0500,USA
                                (414) 768-4000 . Fax: (414) 768-4474


Frank P. Bruno
Vice President - Human Resources
(414) 768-4391 . Fax: (414) 768-5060



August 8, 2000


Mr. Timothy W. Sullivan
Bucyrus International, Inc.
1100 Milwaukee Avenue
South Milwaukee, WI  53172

Dear Tim:

This letter will serve as an amendment and clarification of the letter
dated April 4, 2000 outlining your terms of employment with Bucyrus
International, Inc. (the "Company"), and supersedes the April 4, letter
in all respects.  As stated in the April 4 letter, for purposes of
measuring your term of employment for all employees benefits, bonus
programs and other purposes, your "rehire date" will be January 17, 2000
(but you will receive credit for prior service as set forth in this
letter), and your employment will continue subject to termination by
either you or the Company as outlined herein.

Your initial position will be Executive Vice President.  You will be a
member of the Office of Chief Executive Officer.  The Office of Chief
Executive Officer ("OCEO") is responsible for the oversight of the day
to day operations of the business and its strategic direction as
approved by the Board of Directors.  The Vice President of Operations
and certain staff positions to be determined will join you in this
Office.  In addition to your role as a member of the OCEO, your direct
responsibilities will include Sales and Marketing.  You will act as
representative for the Chief Executive Officer when he is not present at
the Company.  Effective August 15, 2000, you will assume the position of
President.

Your initial base salary will be $250,000 annually.  Your base salary
will increase to $300,000 annually at the time you assume the position
of President.  Your base salary will be paid in accordance with the
payroll practices of the Company.  You will be eligible to participate
in the Incentive Program for Sales and Marketing Management personnel.

You shall be entitled to participate in all employee benefit plans and
programs generally available to senior executives of the Company,
including medical, dental, life insurance, disability insurance and
retirement plans, subject to eligibility requirements and generally
applicable terms of such plans.  Your retirement benefits will be based
on all service with the Company, including prior service (but you will
not receive any service for the period for which you were not an
employee of the Company).

Your employment with the Company will be subject to your agreement and
compliance with Exhibit A to this letter relating to protection of
confidential information, noncompetition, noninterference and
nonsolicitation.

Your employment may be terminated by the Company at any time, with or
without cause.  However, in the event your employment is terminated by
the Company for any reason other than cause, you will be entitled to
receive as severance pay one year base salary, paid in accordance with
normal payroll practices of the Company.  There will be no incentive
compensation paid for any period, which is not a complete fiscal year.

If the terms of your employment as outlined by this letter are agreeable
to you, please indicate on the enclosed copy of this letter and return
it to me.

                                   Very truly yours,


                                   /s/Frank P. Bruno
                                   Frank P. Bruno
                                   Vice President Human Resources

The terms of employment with the Company
Are agreed to as provided in this letter,
Including Exhibit A.
Dated this 10 day of August, 2000


/s/T. W. Sullivan
Timothy W. Sullivan


                              Exhibit A

                      Rider to Employment Letter
                                  of
                    Timothy Sullivan ("Executive")
                                 with
               Bucyrus International, Inc. ("Company")
                         Dated August 8, 2000

     1.   Protection of Confidential Information.  Executive
acknowledges that during the course of his employment with the Company,
its subsidiaries and affiliates, he will be exposed to documents and
other information regarding the confidential affairs of the Company, its
subsidiaries and affiliates, including without limitation information
about their past, present and future financial condition, the markets
for their products, key personnel, past, present or future actual or
threatened litigation, trade secrets, current and prospective customer
lists, vendor sources, operational methods, acquisition plans,
prospects, plans for future development and other business affairs and
information about the Company and its subsidiaries and affiliates not
readily available to the public (the "Confidential Information").
Executive further acknowledges that the services to be performed by him
as an employee of the Company in the positions of Executive Vice
President and President are of a special, unique, unusual, extraordinary
and intellectual character.  In recognition of the foregoing, the
Executive covenants and agrees as follows:

     1.1  No Disclosure or Use of Confidential Information.  At no
          time shall Executive ever divulge, disclose, or otherwise
          use any Confidential Information for purposes other than
          carrying out his duties as an employee of the Company in the
          best interests of the Company, unless and until such
          information is readily available in the public domain by
          reason other than Executive's unauthorized disclosure or use
          thereof, unless such disclosure or use is expressly
          authorized by the Board of Directors of the Company
          ("Board") in writing in advance of such disclosure.

     1.2  Return of Company Property, Records and Files.  Upon the
          termination of Executive's employment with the Company at
          any time for any reason, or at any other time the Board may
          so direct, Executive shall promptly deliver to the Company's
          offices in South Milwaukee, Wisconsin all of the property
          and equipment of the Company, its subsidiaries and
          affiliates (including any cell phones, pagers, credit cards,
          personal computers, etc.) and any and all documents,
          records, and files, including any notes, memoranda, customer
          lists, reports and any and all other documents, including
          any copies thereof, whether in hard copy form or on a
          computer disk or hard drive, which relate to the Company,
          its subsidiaries, affiliates, successors or assigns, and/or
          their respective past and present officers, directors,
          employees or consultants (collectively, the "Company
          Property, Records and Files"); it being expressly understood
          that, upon termination of Executive's employment, Executive
          shall not be authorized to retain any of the Company
          Property, Records and Files, except to the extent expressly
          so authorized in writing by the Board.

     2.   Noncompetition.  During the term of Executive's employment
with the Company and for the two-year period immediately following the
date of termination of Executive's employment at any time and for any
reason (the "Restricted Period"), Executive shall not, directly or
indirectly, (i) enter the employ of, or render any consulting services
to, any entity that competes with the Company, or its subsidiaries,
affiliates (provided that such term as used in this Section 2 shall not
include entities that are affiliates of the Company solely by reason of
being affiliates of American Industrial Partners Capital Fund II, L.P.),
successors, or assigns, in the conduct of the "Business" (as defined in
this Section 2) in the United States and/or any foreign country within
which, during the twelve (12) month period preceding Executive's
termination of employment, the Company, or its subsidiaries, affiliates,
successors, or assigns, engaged in the Business; or (ii) assist or
participate in any such competing entity in any capacity, including
without limitation, as an individual, partner, shareholder, officer,
director, principal, agent, trustee or consultant; provided, however,
Executive may own, directly or indirectly, solely as a passive
investment, securities of any entity traded on any national securities
exchange if Executive is not a controlling person of, or a member of a
group which controls, such entity and does not, directly or indirectly
own 5% or more of any class of securities of such entity.  For purposes
of this Section 2, the "Business" shall mean (x) the manufacture and/or
sale of surface mining equipment and spare parts of the kind
manufactured, sold and provided by the Company or any subsidiary,
affiliate, successor or assign at any time during the term of
Executive's employment with the Company and which the Company continues
to manufacture, sell or produce during the Restricted Period; (y)
maintenance and service related to the equipment and spare parts
referenced in subsection (x) above; and (z) the manufacture and/or sale
of, and maintenance and service related to, any surface mining equipment
with respect to which, prior to the date of termination of Executive's
employment hereunder, the Company or any subsidiary, affiliates,
successor or assign has or shall have made a material financial
investment in contemplation of manufacturing, selling, maintaining or
servicing.

     3.   Noninterference.  During the term of Executive's employment
with the Company and for the Restricted Period, Executive shall not,
directly or indirectly, solicit, induce, or attempt to solicit or induce
any officer, director, employee, agent or consultant of the Company or
any of its subsidiaries, affiliates, successors or assigns to terminate
his, her or its employment or other relationship with the Company or its
subsidiaries, affiliates, successors or assigns for the purpose of
associating with any competitor of the Company or its subsidiaries,
affiliates, successors or assigns, or otherwise encourage any such
person or entity to leave or sever his, her or its employment or other
relationship with the Company or its subsidiaries, affiliates,
successors or assigns for any reason, other than pursuant to the
discharge of Executive's duties as an employee of the Company.

     4.   Nonsolicitation.  During the term of Executive's employment
with the Company and the for Restricted Period, Executive shall not,
directly or indirectly, solicit, induce, or attempt to solicit or induce
any customers, clients, vendors, suppliers, or consultants then under
contract to the Company or its subsidiaries, affiliates, successors or
assigns, to terminate his, her or its relationship with the Company or
its subsidiaries, affiliates, successors or assigns, for the purpose of
associating with any competitor of the Company or its subsidiaries,
affiliates, successors or assigns, or otherwise encourage such
customers, clients, vendors, suppliers or consultants then under
contract to terminate his, her or its relationship with the Company or
its subsidiaries, affiliates, successors or assigns for any reason,
other than pursuant to the discharge of Executive's duties as an
employee of the Company.

     5.   Rights and Remedies upon Breach of a Restrictive Covenant.
If Executive breaches, or threatens to commit a breach of, any of the
provisions of Sections 1 through 4 above (the "Restrictive Covenants"),
the Company and its subsidiaries, affiliates, successors or assigns
shall have the following rights and remedies, each of which shall be
independent of the others and severally enforceable, and each of which
shall be in addition to, and not in lieu of, any other rights or
remedies available to the Company or its subsidiaries, affiliates,
successors or assigns at law or in equity.

     5.1  Specific Performance.  The right and remedy to have the
          Restrictive Covenants specifically enforced by any court of
          competent jurisdiction by injunctive decree or otherwise, it
          being agreed that any breach or threatened breach of the
          Restrictive Covenants would cause irreparable injury to the
          Company or its subsidiaries, affiliates, successors or
          assigns and that money damages would not provide an adequate
          remedy to the Company or its subsidiaries, affiliates,
          successors or assigns.

     5.2  Accounting.  The right and remedy to require Executive to
          account for and pay over to the Company or its subsidiaries,
          affiliates, successors or assigns, as the case may be, all
          compensation, profits, monies, accruals, increments or other
          benefits derived or received by Executive as a result of any
          transaction or activity constituting a breach of any of the
          Restrictive Covenants.

     5.3  Severability of Covenants.  Executive acknowledges and
          agrees that the Restrictive Covenants are reasonable and
          valid in geographic and temporal scope and in all other
          respects.  If any court determines that any of the
          Restrictive Covenants, or any part thereof, is invalid or
          unenforceable, the remainder of the Restrictive Covenants
          shall not thereby be affected and shall be given full force
          and effect without regard to the invalid portions.

     5.4  Modification By the Court.  If any court determines that any
          of the Restrictive Covenants, or any part thereof, is
          unenforceable because of the duration or scope of such
          provision, such court shall have the power to reduce the
          duration or scope of such provision, as the case may be (it
          being the intent of the parties that any such reduction be
          limited to the minimum extent necessary to render such
          provisions enforceable), and, in its reduced form, such
          provision shall then be enforceable.

     5.5  Enforceability in Jurisdictions.  Executive intends to and
          hereby confers jurisdiction to enforce the Restrictive
          Covenants upon the courts of any jurisdiction within the
          geographic scope of such covenants.  If the courts of any
          one or more of such jurisdictions hold the Restrictive
          Covenants unenforceable by reason of the breadth of such
          scope or otherwise, it is the intention of the Executive
          that such determination not bar or in any way affect the
          right of the Company or its subsidiaries, affiliates,
          successors or assigns to the relief provided herein in the
          courts of any other jurisdiction within the geographic scope
          of such covenants, as to breaches of such covenants in such
          other respective jurisdictions, such covenants as they
          relate to each jurisdiction being, for this purpose,
          severable into diverse and independent covenants.

     5.6  Attorneys' Fees.  Executive agrees that the Company shall be
          entitled to recover from Executive all costs, including
          attorneys' fees and expert witness fees, which the Company
          incurs in enforcing the Restrictive Covenants or pursuing
          damages for the Executive's breach of the Restrictive
          Covenants.