FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 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 1-5530

                           ALLIED PRODUCTS CORPORATION
                   ------------------------------------------
             (Exact name of registrant as specified in its charter)





            DELAWARE                                      38-0292230           
 -------------------------------              -------------------------------
 (State or other jurisdiction of              (I.R.S. Employer Identification
 incorporation or organization)                 Number)


 10 SOUTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS                         60606     
-------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)


       Registrant's telephone number, including area code (312) 454-1020


                                Not Applicable               
                                --------------               
                (former name, former address and former fiscal
                      year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of 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  requirement for
the past 90 days. Yes x No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:  11,818,609 common shares, $.01
par value, as of October 31, 1998.





<PAGE>



          ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES


                                    INDEX


          PART I. FINANCIAL INFORMATION
                  ---------------------

                  ITEM 1.FINANCIAL STATEMENTS

                         INTRODUCTION

                         CONDENSED CONSOLIDATED BALANCE SHEETS-
                         September  30, 1998 and December 31, 1997

                         CONDENSED  CONSOLIDATED  STATEMENTS OF INCOME Three and
                         Nine Months Ended September 30, 1998 and 1997

                         CONDENSED  CONSOLIDATED  STATEMENTS  OF CASH FLOWS-Nine
                         Months Ended September 30, 1998 and 1997

                         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                  ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                               CONDITION AND RESULTS OF OPERATIONS


          PART II.OTHER INFORMATION
                  -----------------

                  ITEM 1.NOT APPLICABLE

                  ITEM 2.NOT APPLICABLE

                  ITEM 3.NOT APPLICABLE

                  ITEM 4.NOT APPLICABLE

                  ITEM 5.OTHER INFORMATION

                  ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

          SIGNATURES
          ----------

          EXHIBIT  INDEX
          --------------


<PAGE>




                        PART I - FINANCIAL INFORMATION
                        ------------------------------

ITEM 1.       FINANCIAL STATEMENTS

          ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES

                                 INTRODUCTION

      The condensed  consolidated  financial  statements  included herein (as of
September  30, 1998 and for the three and nine months ended  September  30, 1998
and 1997) have been  prepared by the  Company,  without  audit,  pursuant to the
rules and regulations of the Securities and Exchange  Commission and reflect all
adjustments which are, in the opinion of management, necessary to present fairly
the condensed  consolidated  financial  information  required therein.  All such
adjustments are of a normal,  recurring  nature.  The information as of December
31,  1997 is derived  from the  audited  year end  balance  sheet for that year.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted pursuant to such rules and regulations,  although
the Company  believes that the  disclosures are adequate to make the information
presented not  misleading.  It is suggested that these  financial  statements be
read in conjunction with the financial statements and the notes thereto included
in the Company's latest annual report on Form 10-K.

      The  results  of  operations  for the three and nine month  periods  ended
September 30, 1998 and 1997 are not necessarily  indicative of the results to be
expected for the full year.

<PAGE>




            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
                                     ASSETS
<CAPTION>

<S>                                                    <C>                      <C>   
                                                        September 30, 1998       December 31, 1997
                                                       --------------------     ------------------- 
Current Assets:
             
  Cash and cash equivalents ........................   $            428,000     $           609,000
                                                       --------------------     -------------------
  Notes and accounts receivable, less allowances of
     $699,000 and $531,000, respectively ...........   $         64,928,000     $        54,729,000
                                                       --------------------     -------------------
  Inventories:
    Raw materials ..................................   $         10,015,000     $         6,193,000
    Work in process ................................            107,855,000              58,090,000
    Finished goods .................................             16,155,000              14,419,000
                                                      ---------------------     -------------------
                                                               $134,025,000     $        78,702,000
                                                      ---------------------     -------------------
 Deferred tax asset ................................   $         12,773,000     $        12,773,000
                                                       --------------------     -------------------
 Prepaid expenses ..................................   $            540,000     $           415,000
                                                       --------------------     -------------------
       Total current assets ........................           $212,694,000     $       147,228,000
                                                       --------------------     -------------------

 Plant and Equipment, at cost:
    Land ...........................................   $          2,366,000     $         2,243,000
    Buildings and improvements .....................             56,589,000              40,750,000
    Machinery and equipment ........................             62,088,000              51,339,000
                                                       --------------------     -------------------
                                                       $        121,043,000     $        94,332,000
   Less-Accumulated depreciation and amortization ..             47,792,000              48,811,000
                                                       --------------------     -------------------
                                                       $         73,251,000     $        45,521,000
                                                       --------------------     -------------------
 Other Assets:
    Deferred tax asset .............................   $          4,071,000     $         4,071,000
    Deferred charges (goodwill), net of amortization              6,173,000               1,491,000
    Other ..........................................              2,629,000               1,472,000
                                                       --------------------     -------------------
                                                       $         12,873,000     $         7,034,000
                                                       --------------------     -------------------

                                                       $        298,818,000     $       199,783,000
                                                       ====================     ===================


</TABLE>


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


<PAGE>







            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>

                    LIABILITIES AND SHAREHOLDERS' INVESTMENT
<CAPTION>
<S>                                                    <C>                      <C> 
                                                        September 30, 1998       December 31, 1997
                                                       --------------------     ------------------- 
Current Liabilities:        
  Revolving credit agreement ........................  $        116,000,000     $        50,400,000
  Current portion of long-term debt .................               388,000                 268,000
  Accounts payable ..................................            50,560,000              19,923,000
  Accrued expenses ..................................            26,493,000              25,145,000
                                                       --------------------     -------------------
         Total current liabilities ..................  $        193,441,000     $        95,736,000
                                                       --------------------     -------------------
Long-term debt, less current portion shown above ....  $          1,168,000     $           670,000
                                                       --------------------     -------------------
Other long-term liabilities .........................  $         10,646,000     $        10,353,000
                                                       --------------------     -------------------
Commitments and Contingencies
Shareholders' Investment:
    Preferred stock:
       Undesignated-authorized 1,500,000 shares         
       at September 30, 1998 and December 31,
       1997; none issued ............................  $             --         $            --
   Common Stock, par value $.01 per share; authorized
      25,000,000 shares; issued 14,047,249 shares at
      September 30, 1998 and December 31, 1997 ......               140,000                 140,000
   Additional paid-in capital .......................            94,309,000              94,709,000
   Retained earnings ................................            41,578,000              40,428,000
                                                       --------------------     -------------------
                                                       $        136,027,000     $       135,277,000
   Less: Treasury stock, at cost:  2,160,740 and
     2,144,263 shares at September 30, 1998 and
     December 31, 1997, respectively ................           (42,464,000)            (42,253,000)
                                                       --------------------     -------------------
         Total shareholder's equity .................  $         93,563,000     $        93,024,000
                                                       --------------------     -------------------

                                                       $        298,818,000     $       199,783,000
                                                       ====================     ===================

</TABLE>


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



<PAGE>








            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES

<TABLE>

                CONDENSED CONSOLIDATED STATEMENTS OF INCOME(LOSS)
<CAPTION>

<S>                                     <C>                <C>                  <C>               <C>          

                                        Three Months Ended September 30,        Nine Months Ended September 30,
                                        --------------------------------        ------------------------------- 
                                             1998               1997                 1998              1997
                                        -------------      -------------        -------------     ------------- 


Net sales ...........................   $  77,184,000      $  63,714,000        $ 229,000,000     $ 213,497,000
Cost of products sold ...............      81,071,000         47,515,000          194,953,000       160,064,000
                                        -------------      -------------        -------------     -------------
  Gross profit(loss) ................   $  (3,887,000)     $  16,199,000        $  34,047,000     $  53,433,000
                                        -------------      -------------        -------------     -------------

Other costs and expenses:

  Selling and administrative expenses   $   9,571,000      $   9,217,000        $  27,101,000     $  26,485,000

  Interest expense ..................       1,802,000            847,000            4,339,000         2,499,000

  Other (income) expense, net .......         379,000         (1,623,000)          (1,485,000)       (1,082,000)
                                        -------------      -------------        -------------     -------------

                                        $  11,752,000      $   8,441,000        $  29,955,000     $  27,902,000
                                        -------------      -------------        -------------     -------------

Income (loss) before taxes ..........   $ (15,639,000)     $   7,758,000        $   4,092,000     $  25,531,000

Provision (credit) for income taxes .      (5,343,000)         2,745,000            1,513,000         9,141,000
                                        -------------      -------------        -------------     -------------

Net income (loss) and comprehensive
  net income(loss) ..................   $ (10,296,000)     $   5,013,000        $   2,579,000     $  16,390,000
                                        =============      =============        =============     =============

Earnings (loss) per common share:
  Basic                                 $       (0.86)     $        0.42        $        0.22     $        1.35
                                        =============      =============        =============     ============= 

  Diluted                               $       (0.86)     $        0.41        $        0.21     $        1.32
                                        =============      =============        =============     ============= 

Weighted average shares outstanding:
  Basic                                    11,914,000         12,091,000           11,920,000        12,165,000
                                        =============      =============        =============     ============= 

  Diluted                                  11,996,000         12,358,000           12,069,000        12,412,000
                                        =============      =============        =============     ============= 

Dividends per common share              $        0.04      $        0.04        $        0.12     $        0.11
                                        =============      =============        =============     ============= 


</TABLE>





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



<PAGE>





            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES

<TABLE>

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

                                                                         Nine Months Ended September 30,
                                                                         ------------------------------- 
                                                                              1998              1997
                                                                         -------------    -------------- 
<S>                                                                      <C>              <C>   
Cash Flows from Operating Activities:      
   Net income ........................................................   $   2,579,000    $   16,390,000
   Adjustments to reconcile net income to net cash provided from
      (used for) provided from operating activities:
      Gains on sales of operating and nonoperating assets ............      (1,962,000)         (151,000)
      Depreciation and amortization ..................................       4,406,000         3,840,000
      Amortization of deferred charges ...............................         240,000           133,000
      Deferred income tax provision ..................................         958,000         8,065,000
      Changes in noncash assets and liabilities, net of
        noncash transactions:
         (Increase) in accounts receivable ...........................      (7,710,000)       (9,572,000)
         (Increase) in inventories ...................................     (52,387,000)      (12,079,000)
         (Increase) decrease in prepaid expenses .....................        (107,000)           16,000
         Increase (decrease)  in accounts payable and accrued expenses      30,143,000         2,418,000
      Other,net ......................................................        (713,000)           65,000
                                                                         -------------     -------------
   Net cash provided from (used for) operating activities ............   $ (24,553,000)   $    9,125,000
                                                                         -------------     -------------

Cash Flows from Investing Activities
   Additions to plant and equipment ..................................   $ (31,411,000)   $  (10,165,000)
   Payment for businesses acquired ...................................     (10,953,000)           --
   Proceeds from sales of plant and equipment ........................       3,373,000           414,000
                                                                         -------------    -------------
   Net cash used for investing activities ............................   $ (38,991,000)   $   (9,751,000)
                                                                         -------------    -------------

Cash Flows from Financing Activities:
   Borrowings under revolving credit agreement .......................   $ 131,400,000    $   83,100,000
   Payments under revolving credit agreement .........................     (65,800,000)      (67,000,000)
   Payments of short and long-term debt ..............................        (202,000)         (145,000)
   Purchase of treasury stock ........................................      (1,171,000)      (15,995,000)
   Dividends paid ....................................................        (955,000)         (811,000)
   Stock option transactions .........................................          91,000         1,147,000
                                                                         -------------    --------------
Net cash provided from financing activities ..........................   $  63,363,000    $      296,000
                                                                         -------------    --------------
Net (decrease) in cash and cash equivalents ..........................   $    (181,000)   $     (330,000)
Cash and cash equivalents at beginning of year .......................         609,000           833,000
                                                                         -------------    --------------
Cash and cash equivalents at end of period ...........................   $     428,000    $      503,000
                                                                         =============    ==============


</TABLE>


  The accompanying notes to condensed consolidated financial statements are an 
    integral part of the statements















<PAGE>




           Allied Products Corporation and Consolidated Subsidiaries
             Notes to Condensed Consolidated Financial Statements


(1)   Accrued Expenses
      ----------------

      The Company's accrued expenses consist of the following:


                                              9/30/98              12/31/97   
                                           ------------          ------------
       Salaries and wages                  $  7,726,000          $  5,560,000
       Warranty                               5,290,000             4,938,000
       Self insurance accruals                1,576,000             2,858,000
       Pensions, including retiree health     5,642,000             6,439,000
       Taxes, other than income taxes         1,812,000             1,158,000
       Environmental matters                  1,403,000             1,810,000
       Other                                  3,044,000             2,382,000
                                           ------------          ------------
                                           $ 26,493,000          $ 25,145,000
                                           ============          ============
                                         
(2)   Earnings Per Common Share
      -------------------------

            During 1997, the Financial  Accounting Standards Board (FASB) issued
      Statement of Financial  Accounting  Standards No. 128 (SFAS 128)--Earnings
      per  Share.   Earnings  per  common  share  and  weighted  average  shares
      outstanding  for the three and nine months ended  September  30, 1997 have
      been  restated to reflect the effect of adopting  the  provisions  of this
      accounting  standard.  Basic  earnings per common share for the periods in
      1998  is  based  on  the  average  number  of  common  shares  outstanding
      (11,914,000  and 11,920,000 for the three and nine months ended  September
      30, 1998,  respectively).  Diluted  earnings per common share for the same
      periods is based on the average  number of common shares  outstanding,  as
      noted above, increased by the dilutive effect of outstanding stock options
      (82,000  and 149,000 for the three and nine  months  ended  September  30,
      1998,  respectively).  Basic  earnings per common share for the periods in
      1997  is  based  on  the  average  number  of  common  shares  outstanding
      (12,091,000  and 12,165,000 for the three and nine months ended  September
      30, 1997,  respectively).  Diluted  earnings per common share for the same
      periods  in  1997  is  based  on  the  average  number  of  common  shares
      outstanding,  as noted  previously,  increased by the  dilutive  effect of
      outstanding  options  (267,000  and  247,000 for the three and nine months
      ended September 30, 1997, respectively).





<PAGE>





(3)   Treasury Shares
      ---------------

            During the third quarter of 1998,  the Company's  Board of Directors
      authorized  the  purchase  of up  to  500,000  additional  shares  of  the
      Company's   outstanding   common  stock  subject  to   prevailing   market
      conditions. See Note 10 regarding an Amendment to the Amended and Restated
      Credit  Agreement  and the  availability  of funds related to these future
      treasury stock purchases.

(4)   Acquisitions
      ------------

            During  the   second   quarter  of  1998,   the   Company   acquired
      substantially  all of the assets and assumed certain  liabilities of Great
      Bend  Manufacturing  Company  (Great Bend) located in Great Bend,  Kansas.
      Great Bend manufactures and sells tractor-mounted  front-end loaders which
      are used  principally  in  agricultural  applications.  The  Company  also
      acquired in the second quarter of 1998  substantially all of the assets of
      Universal  Turf  Equipment  Corporation  (Universal  Turf) located in Opp,
      Alabama. Universal Turf manufactures and sells turf maintenance implements
      including  reel  mowers,  verti-cut  mowers,  reel  grinders  and spraying
      equipment.  The impact of these acquisitions on the consolidated operating
      results of the Company in the third quarter and nine month periods of 1998
      is not considered significant.

(5)   Dispositions/Sales of Assets
      ----------------------------

            "Other  (income)  expense,  net" for the nine months ended September
      30, 1998 includes gains of approximately  $1,962,000  ($10,000 loss in the
      third quarter) primarily related to the sale of idle facilities.

(6)   Revised Cost Estimate
      ---------------------

            During the latter  part of the third  quarter of 1998,  the  Company
      recorded a pretax charge of $16,023,000.  This charge stems primarily from
      revised   cost   estimates   for  several   newly   designed,   automated,
      multi-station  transfer  presses  currently  in  production  at the Verson
      division.  The need for the revised cost  estimates was  identified in the
      third  quarter 1998 and reflects the impact of production  bottlenecks  in
      the  assembly  process as well as greater  than  anticipated  increases in
      subcontracting  costs. These factors are all directly  attributable to the
      strain on engineering and manufacturing resources caused by Verson's


<PAGE>



      recent significant  increase in orders. In addition to the impact on third
      quarter  earnings,  the revised cost  estimates  are expected to result in
      lower  margins at the  Verson  division  until the  presses  currently  in
      production  are  completed.  Completion of production  for the majority of
      these presses is  anticipated to occur by the end of the second quarter of
      1999. The Company, as part of the estimate revision process,  has reviewed
      all work currently in process,  all committed  press orders and all future
      business  currently  being  quoted.  Based on this review,  the Company is
      confident  that the  scope of the  problem  has been  identified  and that
      appropriate actions are being aggressively implemented.

(7)   Contingent Liabilities
      ----------------------

            The  Company  is  involved  in a number  of legal  proceedings  as a
      defending party, including product liability and environmental matters for
      which liability is reasonably  possible.  However,  after consideration of
      relevant  data  (consultation  with legal  counsel and review of insurance
      coverage,  accruals,  etc.), management believes that the eventual outcome
      of these matters will not have a material  adverse effect on the Company's
      financial position or its ongoing results of operations.

            Reference  is made to Note 10 of  Notes  to  Consolidated  Financial
      Statements in the Company's  1997 Annual Report on Form 10-K as it relates
      to a note receivable taken in connection with the sale of the business and
      assets of the former Littell  division.  Collections from this note in the
      nine months ended  September  30, 1998 totaled  $520,000  ($130,000 in the
      third quarter) and were included in "Other (income) expense."

            Reference  is made to Note 10 of  Notes  to  Consolidated  Financial
      Statements in the Company's  1997 Annual Report on Form 10-K as it relates
      to the  sale  by the  Company  of a  site  in  Coldwater,  Ohio  that  was
      contingent  on the  issuance  by the  State  of Ohio,  Ohio  Environmental
      Protection  Agency,  of a covenant not to sue. On March 31, 1998, the Ohio
      Environmental  Protection  Agency  issued  the  covenant  not to sue.  The
      Company  closed  on the sale of this  facility  for cash in the  amount of
      $3,156,000 on May 13, 1998.

            At  September  30,  1998,  the Company was  contingently  liable for
      approximately  $938,000  primarily  relating  to  outstanding  letters  of
      credit.




<PAGE>




(8)   Income Taxes
      ------------

            The  provision  (credit)  for income  taxes in the nine months ended
      September  30,  1998 and 1997 is based upon the  Federal  statutory  rates
      adjusted  for items that are not subject to taxes.  See Note 4 of Notes to
      Consolidated  Financial  Statements in the Company's 1997 Annual Report on
      Form 10-K for a further discussion related to income taxes.

(9)   Summary of Other (Income) Expense
      ---------------------------------
<TABLE>

            Other  (income)  expense for the three and nine month  periods ended
      September 30, 1998 and 1997 consists of the following:
<CAPTION>

                                 For the three months ended    For the nine months ended  
                                    9/30/98        9/30 97        9/30/98        9/30/97   
                                 -----------    -----------    -----------    -----------

<S>                              <C>            <C>            <C>            <C>         
      Interest income ........   $   (59,000)   $   (46,000)   $  (146,000)   $   (86,000)
      Goodwill amortization ..       108,000         44,000        240,000        133,000
      Net (gain) loss on sales
       of operating and non-
       operating assets ......        10,000         (8,000)    (1,962,000)      (151,000)
      Litigation
       settlements/insurance
       provision .............       314,000         81,000        883,000        638,000
      Payments received on
       long-term notes
       receivable reserved for
       as uncollectible ......      (130,000)    (1,695,000)      (520,000)    (2,195,000)
      Other miscellaneous ....       136,000          1,000         20,000        579,000
                                 -----------    -----------    -----------    -----------
                                 $   379,000    $(1,623,000)   $(1,485,000)   $(1,082,000)
                                 ===========    ===========    ===========    ===========

</TABLE>

(10)  Financial Arrangements
      ----------------------

            On June 30, 1998 the Company  entered  into  Amendment  No. 3 to the
      Amended and  Restated  Credit  Agreement.  The  amendment  provides for an
      increase to $145,000,000 (from  $125,000,000) of borrowings and/or letters
      of  credit  at  either a  floating  prime or fixed  LIBOR  (with  the rate
      dependent  on the ratio of Funded Debt to Operating  Cash Flow) rate.  The
      funds may be used for future working  capital needs of the Company,  fixed
      asset additions and possible acquisitions. On August 21, 1998, the Company
      entered into Amendment No. 4 to the Amended and Restated Credit Agreement.
      The  Amendment  provides for up to  $152,500,000  (from  $145,000,000)  of
      borrowings and/or letters of credit at either a floating


<PAGE>



      prime or fixed LIBOR (with rate  dependent  on the ratio of Funded Debt to
      Operating Cash Flow) rate. The funds associated with this increase will be
      used for the additional purchases of the Company's stock.

            During the third quarter of 1998, the Company entered into an 
      interest rate lock in conjunction with a   $75,000,000 private
      placement agreement that was in process. The Company anticipated that by 
      entering into a private placement agreement, favorable fixed interest 
      rates could be obtained on a long-term basis and that exposure to floating
      interest rates under the Amended and Restated Credit Agreement (which 
      would be reduced by the the principal amount of the private placement) 
      would be reduced. After entering into the interest lock, interest rates 
      continued to decrease. Hedging losses totaling $4,136,000 associated with
      the interest rate lock agreement have been deferred at September 30,1998
      as the agreement was designated as a hedge with respect to the private
      placement in process. The interest rate lock agreement 
      has been extended and now expires on November 20, 1998. The Company has
      the right to further extend this agreement or to make a payment (based on
      then current interest rates) in settlement of this agreement. Subsequent 
      to the end of the third quarter of 1998, the Company decided to suspend 
      its efforts to secure financing through a private placement. Hedging 
      losses at the point of suspension were reduced to approximately 
      $2,352,000 and will be recorded in the fourth quarter of 1998. The Company
      will record additional charges or credits monthly based on changes in 
      current interest rates until a final settlement of the agreement is 
      effective.

            Also during 1998, the Company entered into an interest rate swap
      agreement for $50,000,000 as part of the Amended and Restated Credit 
      Agreement Under the terms of this swap agreement, which expires on May 14,
      2001, the Company has fixed the interest rate on that portion of the      
      Amended and Reststed Credit Agreement. Remaining balances under the 
      Amended and Reststed Credit Agreement bear interest at either a floting 
      prime or fixed LIBOR (with the rate dependent on the ratio of Funded Debt 
      to Operating Cash Flow) rate. The interest rate under the swap agreement 
      exceeds the average barrowing rate under the portion of the Amended and
      Restated Credit Agreement not covered by the swap agreement by .61% as of
      September 30, 1998. This rate differential is being recorded as interest
      expense on a monthly basis.  














<PAGE>




ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS

OPERATING RESULTS
-----------------

      During the latter part of the third quarter of 1998, the Company  recorded
a pretax charge of  $16,023,000.  This charge stems  primarily from revised cost
estimates for several newly designed, automated,  multi-station transfer presses
currently in  production at the Verson  division.  The need for the revised cost
estimates was identified in the third quarter of 1998 and reflects the impact of
production  bottlenecks  in  the  assembly  process  as  well  as  greater  than
anticipated  increases in subcontracting  costs.  These factors are all directly
attributable to the strain on engineering and manufacturing  resources caused by
Verson's  recent  significant  increase in orders.  In addition to the impact on
third  quarter  earnings,  the revised cost  estimates are expected to result in
lower margins at the Verson  division until the presses  currently in production
are  completed.  Completion of  production  for the majority of these presses is
anticipated to occur by the end of the second  quarter of 1999. The Company,  as
part of the  estimate  revision  process,  has  reviewed  all work  currently in
process,  all committed  press orders and all future  business  currently  being
quoted.  


      During the second quarter of 1998, the Company acquired  substantially all
of the assets  and  assumed  certain  liabilities  of Great  Bend  Manufacturing
Company (Great Bend) located in Great Bend, Kansas.  Great Bend manufactures and
sells   tractor-mounted   front-end   loaders  which  are  used  principally  in
agricultural  applications.  The Company also acquired in the second  quarter of
1998  substantially  all of the assets of Universal Turf  Equipment  Corporation
(Universal Turf) located in Opp, Alabama.  Universal Turf manufactures and sells
turf  maintenance  implements  including  reel mowers,  verti-cut  mowers,  reel
grinders  and  spraying  equipment.  The  impact  of these  acquisitions  on the
consolidated  operating  results of the  Company in the third  quarter and first
nine months of 1998 is not  considered  significant.  The Universal Turf product
lines were integrated into the operations of the Bush Hog division.

      During the fourth quarter of 1997, the Company sold for cash substantially
all of the  assets of its Coz  division.  The  purchaser  also  assumed  certain
specified liabilities associated with this division.

      "Earnings   (loss)  per  common  share"  and  "Weighted   average   shares
outstanding"  have been  restated for the three and nine months ended  September
30, 1997 to reflect the effect of adopting  Statement  of  Financial  Accounting
Standards No. 128 - Earnings per Share.



<PAGE>



First Nine Months of 1998 Compared to First Nine Months of 1997
---------------------------------------------------------------

      Net  sales  for the  nine-month  period  ending  September  30,  1998 were
$229,000,000  compared to net sales of  $213,497,000  reported in the first nine
months of 1997. Increased sales at all of the Company's operating divisions more
than  offset  the loss of  revenue  associated  with the  Company's  former  Coz
division,  which was sold in the fourth quarter of 1997.  Income before taxes in
the first nine months of 1998 was $4,092,000  compared to income before taxes of
$25,531,000  reported  in the same  nine-month  period  of the prior  year.  The
majority  of the  decrease  in 1998 was  related to the  $16,023,000  charge for
revised cost estimates  described  above.  Net income was  $2,579,000  ($.21 per
common share-diluted) in the first nine months of 1998 compared to net income of
$16,390,000 ($1.32 per common share-diluted) in the first nine months of 1997.

      At the Bush Hog and Great Bend divisions,combined net sales increased over
15% in the first nine  months of 1998  compared  to the first nine months of the
prior year. Approximately 40% of this increase was related to the acquisition of
the Great Bend and Universal Turf  operations in the second quarter of 1998. The
remainder of the increase was principally associated with increased cutter sales
at the Bush Hog division which  benefitted  from  increased  demand in the first
half of 1998. Cutter sales during this period benefitted from a reduction of the
cattle  herd  liquidation  cycle.  Cattle  ranchers  use the cutters for grazing
pasture  maintenance.  Cutter  sales in 1998 were  also  favorably  affected  by
new/redesigned  products for the turf and landscaping  market for utilization by
commercial turf (sod) growers and for golf course maintenance.  Since the end of
the second  quarter  of the  current  year,  cutter  sales have been  negatively
affected by lower prices for major crops (corn,  wheat,  soybeans) and livestock
commodities. Strong crop yields in the Midwest and fewer exports are expected to
keep crop and live stock  commodity  prices at a low level for the next  several
months.  Loader sales have also increased in the current year, with the majority
of the increase  related to the  acquisition of the Great Bend division as noted
above.  Gross profits increased in the first nine months of 1998 compared to the
first nine months of the prior year. This increase was primarily  related to the
effects of increased  sales as discussed  above.  Gross profit margins  remained
constant  between the two nine-month  periods.  Margin  improvements  related to
favorable manufacturing variances (resulting from increased facility utilization
and  increased  labor  efficiencies)  were  offset  by the  effect of the mix of
products sold in each period.

      At the Verson  division,  sales  increased 23% in the first nine months of
1998  compared  to the  first  nine  months of 1997.  Revenue  and  profits  are
recognized  on a percentage  of  completion  basis for press  production at this
division.  The increase in net sales was principally  related to increased press
production  in the  current  year.  During  the middle  part of this  year,  the
division received a major order for presses totaling approximately  $80,000,000.
Other significantly large


<PAGE>



press orders were received  during 1997.  During 1998,  all of these large press
orders were in production, resulting in increased sales. Gross profits and gross
profit margin decreased  during the 1998 nine-month  period compared to the same
nine months of 1997.  The majority of the decrease was related to a  $16,023,000
charge  recorded in the third quarter of the current year and  discussed  above.
Additional  decreases were associated with the mix of presses in production (the
majority of revenue in 1998 was related to newly designed  presses  resulting in
manufacturing  inefficiencies and increased engineering/design costs), increased
subcontracting  costs, costs related to the hiring and training of manufacturing
personnel and lack of adequate  assembly area. The division has identified these
issues and,  during the fourth quarter of 1998,  anticipates  bringing on line a
$28,000,000   assembly  area  expansion  which  will  approximately  double  the
division's  current  assembly  area.  Warranty  costs have also increased in the
current year due to the  increased  sales volume  noted above.  These  increased
costs were partially  offset by the settlement of a claim against a third party,
which negatively impacted periods prior to 1997.

      Selling and administrative  expenses increased in the first nine months of
1998 to $27,101,000 from $26,485,000  reported in the first nine months of 1997.
As a percent of net sales,  these costs have decreased to 11.8% in 1998 compared
to 12.4% in 1997. At the  agricultural  equipment  divisions,  selling  expenses
increased due to the impact of increased sales (commissions) and the acquisition
of the Great Bend and Universal Turf operations.  Selling expenses at the Verson
division  increased  due to the  establishment  of an  international  sales  and
marketing  department  (primarily  salaries and travel costs). On a consolidated
basis, administrative expenses have decreased in 1998. Cost increases related to
normal staff  expenses and to legal fees  associated  with the  settlement  of a
claim at the Verson division and the acquisition of the Great Bend division were
offset by the impact of certain  Corporate  Office  retirements in late 1997 and
the sale of the Coz division.

      Interest expense in the first nine months of 1998 was $4,339,000  compared
to interest expense of $2,499,000 reported in the first nine months of the prior
year.  Increased borrowing needs were related to higher consolidated  receivable
levels  (primarily  associated  with Bush  Hog's  increased  sales  volume)  and
increased inventory levels (primarily  associated with the Verson division where
orders  for a total  of 10  multi-station  transfer  presses  are  currently  in
production  and some  shipment  delays have  occurred).  Other  borrowing  needs
included fixed asset additions over the past twelve months, including the Verson
plant expansion, the impact of decreased customer deposits and progress payments
against press orders at the Verson division,  and the acquisitions of Great Bend
and Universal Turf in the second quarter of 1998.  Interest expense in the first
nine months of 1998 was  partially offset by the capilalization of $637,000 of 
interest costs relating to the Company's building expansion project at the
Verson division.

      Reference is made to Note 9 of Notes to Condensed Consolidated Financial 
Statements


<PAGE>


for an analysis of Other (income) expense in the first nine months of 1998 
and 1997.

Third Quarter of 1998 Compared to Third Quarter of 1997
-------------------------------------------------------

      Net sales in the third  quarter of 1998 were  $77,184,000  compared to net
sales of $63,714,000  reported in the third quarter of 1997.  Loss before income
taxes in the third  quarter of 1998 was  $15,639,000  compared to income  before
taxes of  $7,758,000  reported  in the  third  quarter  of the prior  year.  The
majority  of the  decrease  related to a charge of  $16,023,000  recorded in the
third  quarter of 1998 for  revised  cost  estimates  at the Verson  division as
described above. Net loss was $10,296,000 ($.86 per common share-diluted) in the
third  quarter of 1998  compared  to net income of  $5,013,000  ($.41 per common
share-diluted) in the third quarter of 1997.

      Agricultural  equipment  (Bush Hog and Great Bend) sales  increased 10% in
the third  quarter of 1998  compared to the same quarter of the prior year.  The
increase was primarily  related to the  acquisitions of Great Bend and Universal
Turf as previously discussed. Rotary cutter sales decreased in the third quarter
of 1998  due to the  impact  of lower  prices  that  farmers  and  ranchers  are
receiving for major crop and livestock  commodities.  Parts sales also decreased
in the current year's third quarter. Other product line sales (loaders, tillers,
backhoes,  etc.)  increased  slightly in the third  quarter of the current year.
Gross  profits and gross profit  margins have  decreased in the third quarter of
1998  compared to the third  quarter of the prior year.  Production  levels have
been reduced in the current  year's third  quarter  resulting in less  favorable
manufacturing variances. The mix of products sold was also less favorable in the
third quarter of 1998.

      At the  Verson  division,  sales have  increased  by over 60% in the third
quarter of 1998  compared  to the third  quarter of the prior  year.  Production
continues  on  major  press  orders  from  each  of the  major  U.S.  automobile
manufacturers.  Gross  profits and gross profit  margins  have  decreased in the
third  quarter of 1998.  The  majority of the  decrease in the gross  profit was
related to a $16,023,000  charge  recorded during the third quarter of this year
as discussed above. Margins on sales currently in process are lower than margins
on sales in  process  in the third  quarter  of the  prior  year.  Margins  were
impacted by several factors  including  increased  manufacturing and engineering
subcontracting  costs  (compared to internal costs to  manufacture  and design),
lack of adequate assembly facilities (an assembly facility addition is currently
being constructed) and costs to hire and train qualified manufacturing employees
to handle the increased production levels.

      Selling and administrative expenses have increased slightly in the third 
quarter of 1998 ($9,571,000) compared to the third quarter of 1997 ($9,571,000).
As a percent of net sales, these


<PAGE>



expenses  decreased to 12.4% in the 1998 third quarter  compared to 14.5% in the
third  quarter of the prior  year.  Over 90% of the  increase in these costs was
related to the  acquisition of the Great Bend and Universal  Turf  operations in
1998.  Increases at the Verson  division in selling  costs (due to the impact of
the  establishment  of an  international  sales and  marketing  department)  and
administrative  costs (due to the expanded operations including the upgrading of
its management information systems) were offset by the effect of the sale of the
Coz division noted above.

      Interest  expense in the third quarter of 1998 was $1,802,000  compared to
interest  expense of $847,000  reported in the third quarter of 1997.  Increased
borrowing  needs were  related to  increased  receivable  levels at the Bush Hog
division,  increased  inventory  levels  at the  Verson  division,  fixed  asset
additions  at both the Bush Hog and Verson  divisions  and the  acquisitions  of
Great Bend and Universal  Turf.  Interest  expense was  partially  offset by the
capitalization of $335,000 of interest costs  relating to the Company's
building expansion project at the Verson division.

      Reference is made to Note 9 of Notes to Condensed  Consolidated  Financial
Statements  for an analysis of Other  (income)  expense in the third  quarter of
1998 and 1997.

FINANCIAL CONDITION AND LIQUIDITY
---------------------------------

      Working  capital at September 30, 1998 was  $19,253,000  (current ratio of
1.10 to 1.0) compared to working  capital of $51,492,000  (current ratio of 1.54
to 1.0) at December 31, 1997. Net receivables increased by $10,199,000 since the
end of 1997.  The  majority  of the  increase  was  related to the  agricultural
equipment divisions where record nine month sales have been recorded by the Bush
Hog division. Cash collections are dependent upon the retail sale of the product
by dealers.  Dealer sales have decreased in the third quarter of 1998 due to the
impact of lower prices the  farmers/ranchers  are  receiving for major crops and
livestock commodities. Extended payment terms are offered to dealers in the form
of floor plan  financing  which is customary in the industry.  Receivables  also
increased with the  acquisition  of the Great Bend  division.  On a consolidated
basis,  inventory  levels  have  increased  $55,323,000  since  the end of 1997.
Approximately 90% of the increase was related to the Verson division and was the
direct  result of the  number  and  extent  of jobs in  process,  the  impact of
decreased  customer  deposits and progress payments against press orders and the
effects  of  delivery  date  extensions.  The  acquisitions  of  Great  Bend and
Universal  Turf  also  resulted  in  increased  consolidated  inventories.   The
consolidated  increase in the accounts payable level ($30,637,000) since the end
of 1997 was principally  associated  with the Verson  division where  production
levels have increased significantly during 1998.

      Fixed asset additions in the first nine months of 1998 (excluding 
acquisitions) totaled


<PAGE>



$31,411,000.  The majority of these  additions were  represented by construction
costs  associated with a $28,000,000  expansion  project at the Verson division.
This  project will more than double the size of Verson's  assembly  facility and
increase the division's  capacity by approximately 35%. This,  combined with the
division's  focused  factory  concept  and  the  overall  strengthening  of  its
infrastructure,  are intended to help  alleviate  capacity  constraints  at this
operation.   Expenditures   for  production   machinery  and  equipment  at  all
manufacturing  divisions  were also made in the first nine months of 1998. It is
anticipated  that the equipment will result in reduced  manufacturing  costs and
improvements in product quality.

      Net borrowings  under the Company's  Amended and Restated Credit Agreement
increased by $65,600,000  since the end of 1997.  These  borrowings were used to
finance working capital needs and fixed asset additions noted above.

      As of September  30, 1998,  the Company had cash  balances of $428,000 and
additional funds of $34,663,000  available under its Amended and Restated Credit
Agreement. Additional capital will be required to complete the expansion project
at the Verson  division as noted above.  During the third  quarter of 1998,  the
Company  entered  into  Amendment  No.  4 to the  Amended  and  Restated  Credit
Agreement.  The amendment provides for up to $152,500,000 (from $145,000,000) of
borrowings  and/or  letters of credit at either a floating  prime or fixed LIBOR
(with the rate  dependent  on the ratio of Funded Debt to  Operating  Cash Flow)
rate.  During  the third  quarter  of 1998,  the  Company's  Board of  Directors
authorized  the  purchase of up to 500,000  additional  shares of the  Company's
outstanding  common stock subject to  prevailing  market  conditions.  The funds
associated  with the above noted  amendment to the Amended and  Restated  Credit
Agreement will be used for these stock purchases.  The Company believes the cash
flow from  operations and funds  available under the Amended and Restated Credit
Agreement are adequate to finance its operations and capital expenditures in the
near future.  At September 30, 1998, the Company was not in compliance  with two
provisions  under the Amended and Restated Credit  Agreement.  Subsequent to the
end of the third  quarter  of 1998,  the  lenders  waived  compliance  with the
related provisions solely for the quarter ended September 30, 1998. In addition,
the amount under the Amended And Restated Credit Agreement was reduced to
$145,000,000.

Reference is made to Note 10 of Notes to Condensed Consolidated Financial
Statements regarding the Company's hedging activities in relation to a private
debt placement agreement which was in process at September 30, 1998 and        
subsequently suspended on November 11, 1998.

IMPACT FROM NOT YET EFFECTIVE RULES
-----------------------------------

      In June 1997,  the  Financial  Accounting  Standards  Board (FASB)  issued
Statement of Financial  Accounting  Standards (SFAS) No. 131 - Disclosures about
Segments of an Enterprise and Related  Information.  This statement  establishes
standards for the way that public business  enterprises report information about
operating   segments  in  interim   financial  reports  issued  to  shareholders
subsequent  to  initial  annual  financial   statements   disclosure.   It  also
establishes  standards  for related  disclosures  about  products and  services,
geographic areas and major  customers.  This statement is effective on an annual
basis for financial statements for periods


<PAGE>



beginning after December 15, 1997. Interim reporting requirements begin in 1999.
Comparative information for earlier years is also to be presented.

      In February  1998,  the FASB issued SFAS No. 132  -Employers'  Disclosures
about  Pensions  and  Other  Postretirement  Benefits.  This  statement  revises
employers'  disclosures about pension and other postretirement benefit plans. It
does not change the  measurement or recognition of these plans.  It standardizes
the disclosure requirements for pension and other postretirement benefits 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
they were when other related SFAS were issued.  The Company is in the process of
evaluating the impact of these statements on its financial reporting.

      In June 1998,  the FASB issued SFAS No. 133 -  Accounting  for  Derivative
Instruments and Hedging Activities.  This statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments   embedded  in  other  contracts,   (collectively   referred  to  as
derivatives)  and for  hedging  activities.  The  Company  is in the  process of
evaluating the impact of this statement on its financial reporting.

YEAR 2000 COMPLIANCE
--------------------

      Many older  computer  software  programs  refer to years in terms of their
final two digits only.  Such  programs may  interpret  the year 2000 to mean the
year 1900 instead.  If not corrected,  these  programs could cause  date-related
transaction failures.  The Company's program to address the year 2000 compliance
issue is broken down into the following major categories:

            1.    Financial related hardware/software.
            2.    Manufacturing/engineering process controls.
            3.    Equipment manufactured for sale.
            4.    Outside source suppliers.

      The general phases common to all of the above categories are:

            1.    Identifying items that are not year 2000 complaint.
            2.    Assigning  priorities  to  identified  items,   including  the
                  assessment of items material to the operations of the Company.
            3.    Repairing or replacing  material  items  determined  not to be
                  year 2000 complaint.
            4.    Testing of material items repaired or replaced.



<PAGE>



      As of September 30, 1998,  the Company has  completed  the  identification
process in relation to three of the four categories noted above. Outside service
bureau financial  software  currently in place has been determined and tested to
be year 2000  compliant.  The  Company  has  recently  purchased  and  installed
financial  software which is year 2000 compliant.  Divisions not currently using
year 2000  compliant  software  will be utilizing  these new  programs.  Payroll
services for the Company are  currently  being  provided by an outside  service.
Payroll  software is not year 2000  compliant.  The Company is in the process of
having  this  software  upgraded  by the  end of  1998.  Financial  hardware  is
currently  being  tested for  compliancy.  The majority of the hardware has been
purchased  within  the last two years and is  believed  to be  compliant. 
Certification of compliance and subsequent testing needs to be completed. Older 
hardware  will be  replaced  over  the  next  year as  part of  ongoing  upgrade
programs.

      Manufacturing/engineering   process   controls  and   equipment   includes
equipment  to  manufacture  and  design  products  sold by the  Company.  Design
equipment used in the engineering of agricultural  equipment has been determined
and tested to be year 2000 compliant.  At the Verson division,  design equipment
not year 2000 compliant has yet to be identified and prioritized. The Company is
in the process of selecting  outside experts to identify,  repair or replace and
test the equipment  (hardware and software) which is not compliant at this time.
This process  should be completed by the first quarter of 1999. The Company does
not have a significant amount of manufacturing  equipment with embedded computer
chips or hardware/software which would present a problem at the beginning of the
year  2000.  Compliancy  certificates  have  been  received  from the  equipment
manufacturers and all testing,  where necessary,  should be completed by the end
of the first quarter of 1999.

      None of the  equipment  manufactured  by Bush Hog and Great  Bend  include
hardware/software  or embedded computer chips.  Stamping presses manufactured by
the Verson  division  contain  software and embedded  computer  chips.  However,
neither of these items effect the operation of the presses as it relates to year
2000 issues.  The Company believes that it has little,  if any, exposure related
to equipment manufactured by its divisions in relation to the year 2000 issue.

      The Company has identified  outside vendors which provide  services which,
if not year  2000  compliant,  could  have an effect  on the  operations  of the
Company. Sources include banking,  investment,  pension obligations,  insurance,
etc. During the fourth quarter of 1998, these service providers will be asked to
update the Company on the status of their year 2000 compliance. The Company will
then need to evaluate these responses and determine if a contingency  plan would
be necessary should the vendor not be compliant.

      The total cost associated with required  modifications to become year 2000
compliant is not expected to be material to the  Company's  financial  position.
Through September 30, 1998,


<PAGE>



the Company has spent approximately  $250,000 on the project to become year 2000
compliant. This amount does not include the cost of internal efforts to complete
the project. The costs associated with the replacement of computerized  systems,
hardware  or  equipment,  substantially  all of  which is  capitalized,  are not
included in the above estimate as such  replacements  or upgrades were necessary
to operate efficiently and such costs would have been incurred even if year 2000
compliance was not an issue. The Company anticipates that an additional $250,000
may be spent in completing  the year 2000  compliance  project.  These costs are
being funded through  operating  cash flow.  The Company's year 2000  compliance
program is an ongoing  process and the estimates of costs and  completion  dates
for various components of the program described above are subject to change.

      The Company is in the process of developing contingency plans should year
2000 compliance not be achieved in a timely manner. The Company believes its
greatest risk of exposure to noncompliance (in relation to year 2000 issues over
which the Company has control) is associated with financial related hardware and
software. While significant progress toward compliance has been made over the 
past year, failure to obtain compliance could result in the delay of the 
reporting of financial results. The Company, at this time, is unable to 
determine the impact of non year 2000 compliance by outside venders. In many
instances, the use of alternative vendors who are year 2000 compliant would be
considered.
  
      The above expectations are subject to uncertainties.  For example,  if the
Company  was  affected by the  inability  of  suppliers  or major  customers  to
continue  operations  due to  such  a  problem,  the  Company  could  experience
interruption in some aspects of its activities,  which could  materially  impact
our results of operations or financial condition. The Company believes that with
the  completion  of the year 2000  project,  as scheduled,  the  possibility  of
significant interruptions of normal operations should be reduced.

SAFE HARBOR STATEMENT
---------------------

      Statements  contained  within the  Management  Discussion  and Analysis of
Financial  Condition and Results of Operations  that relate to future  operating
periods are subject to risks and  uncertainties  that could cause actual results
to differ from management's  projections.  Operations of the Company include the
manufacturing and sale of agricultural and industrial machinery.  In relation to
the  Bush Hog and  Great  Bend  divisions,  forward-looking  statements  involve
certain   factors  that  are  subject  to  change.   These  elements   encompass
interrelated  factors  that  affect  farmers  and cattle  ranchers'  confidence,
including  demand for  agricultural  products,  grain  stock  levels,  commodity
prices,  weather  conditions,  crop and animal diseases,  crop yields, farm land
values and government farm programs.  Other factors  affecting all operations of
the Company  include  actions of  competitors  in the  industries  served by the
Company,  production  difficulties  including  capacity and supply  constraints,
labor  relations,  interest  rates,  the ability of the Company to identify  and
correct  any  year  2000  issues  in  a  timely   manner  and  other  risks  and
uncertainties.  The Company's outlook is based upon assumptions  relating to the
factors discussed above.








<PAGE>








                          PART II - OTHER INFORMATION


Item 5      Other Information
            -----------------

            Reference  is made to Note 10 Financial  Arrangements  of " Notes to
Condensed  Consolidated  Financial  Statements"  and Exhibit 10 for  information
related to the Amendment to the Amended and Restated Credit Agreement.


Item 6.     Exhibit and Reports on Form 8-K
            -------------------------------

(a)   Exhibits - See Exhibit Index included herein.

(b)   Reports  on Form 8-K - There  were no  reports  on Form 8-K for the  three
      months ended September 30, 1998.
























<PAGE>








SIGNATURES
----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                 ALLIED PRODUCTS CORPORATION     
                                 ---------------------------     
                                        (REGISTRANT)




November 13, 1998                /s/ Robert J. Fleck                            
-----------------                -------------------                            
                                 Robert J. Fleck
                                 Vice President- Accounting and Chief Accounting
                                  & Administrative Officer




November 13,1998                 /s/ Mark C. Standefer                          
----------------                 -----------------                              
                                 Mark C. Standefer
                                 Vice President, General Counsel & Secretary

























<PAGE>








                          ALLIED PRODUCTS CORPORATION

                               INDEX TO EXHIBITS




EXHIBIT NO.                        DESCRIPTION OF EXHIBITS
-----------                        -----------------------

    10               Material Contract - Amendment No. 4 to the Credit Agreement
    27               Financial Data Schedules