SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                           Commission File No. 0-21830

                  TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)


         Delaware                                      25-1672791
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

                            980 North Michigan Avenue
                                   Suite 1000
                                Chicago, IL 60611
                    (Address of Principal executive offices)

                                 (312) 280-8844
              (Registrant's telephone number, including area code)

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

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

Common Stock, $.01 par value                     NASDAQ National Market System


Indicate by checkmark  whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

               YES  X                                     No
                  -----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements incorporated by reference in Part II of this Form 10-K.

State the aggregate  market value of the voting stock held by  nonaffiliates  of
the registrant. The aggregate market value shall by computed by reference to the
price at which the stock was sold,  or the average bid and asked  prices of such
stock,  as of a specified date within 60 days prior to the date of filing.  (See
definition of affiliate in Rule 405).

                $169,058,504              as of January 28, 2000

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                 CLASS                 OUTSTANDING AT JANUARY 28, 2000

        Common Stock, $.01 par value            10,322,280







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                                     PART I

ITEM 1. BUSINESS

                                   THE COMPANY

        Transportation Technologies Industries, Inc. (formerly Johnstown America
Industries,  Inc.,  the "Company") is a leading  manufacturer  of components for
heavy-duty and medium-duty trucks, buses, specialty vehicles and the truck parts
aftermarket. Product lines include: Gunite wheel-end components; Brillion custom
iron  castings;  Imperial  body and chassis  components;  Bostrom  truck and bus
seating systems;  and Fabco steerable drive axles and gearboxes.  The Company is
headquartered in Chicago,  Illinois and has manufacturing operations in Alabama,
California,   Illinois,  Indiana,  Pennsylvania,   Tennessee,  Texas,  Virginia,
Washington and Wisconsin.

        Formerly, the Company had a second operating segment which was a leading
manufacturer  and lessor of new and rebuilt  freight cars used for hauling coal,
intermodal containers,  highway trailers,  automobiles,  agricultural and mining
products. See "Corporate History of the Company" below.

        Gunite  Corporation  ("Gunite") is a leading North American  supplier of
wheel-end  systems and components,  such as brake drums,  disc wheel hubs, spoke
wheels, rotors and automatic slack adjusters to original equipment manufacturers
("OEMs") in the medium and heavy-duty truck and trailer industries and the truck
parts aftermarket.

        Brillion  Iron Works,  Inc.  ("Brillion")  operates  one of the nation's
largest and most  versatile  iron  foundries  and is focused on  providing  high
quality complex  castings to the heavy-duty truck industry and to customers in a
wide  range  of  industries,  including  industrial  machinery,  automotive  and
construction  equipment markets.  A leader in ductile iron technology,  Brillion
specializes in the production of lightweight,  intricate thin wall castings.  In
addition to providing an important  source of high quality  castings for Gunite,
Brillion has  long-standing  relationships  with many of its over 225 customers.
Brillion also manufactures and sells a line of farm equipment products.

        Imperial  Group,  L.P.  ("Imperial")  is a  leading  Tier I and  Tier II
supplier of body and chassis  components  for  heavy-duty  truck and transit bus
OEMs. Imperial  fabricates a broad line of nearly 5,500 metal products,  ranging
from  bumpers to  fenders to fuel  tanks.  Imperial  also  provides a variety of
value-added services such as chrome plating, polishing,  assembly and sequencing
of parts and chassis.

        Bostrom  Seating,  Inc.  ("Bostrom")  is a leading  manufacturer  of air
suspension  and static seating  systems for the medium and heavy-duty  truck and
bus industries.

        Fabco  Automotive   Corporation  ("Fabco")  is  a  leading  supplier  of
steerable  drive  axles,  gear boxes and  related  parts for  heavy-duty  on/off
highway trucks and utility vehicles.

        For a definition of certain terms used in this Form 10-K,  see "Glossary
of Certain Terms" at the end of this item.

CORPORATE HISTORY OF THE COMPANY

        An  investor  group led by  Thomas M.  Begel,  the  Chairman,  and Chief
Executive  Officer of the Company and the former  Chairman,  President and Chief
Executive  Officer of the  Pullman  Company,  formed the  Company in 1991 as the
holding   company  for  Johnstown   America   Corporation   ("JAC")  to  acquire
substantially  all of the assets of the  freight car  manufacturing  business of
Bethlehem  Steel  Corporation  ("Bethlehem"),  a  business  started  in  1901 in
Johnstown, Pennsylvania and acquired by Bethlehem in 1923.

        In July 1993, the Company  completed an initial  public  offering of its
common stock and in February 1994 the Company completed a secondary  offering of
its common stock.

        In January 1995, the Company purchased Bostrom,  a leading  manufacturer
of  heavy-duty  truck  seating  systems  located  in  Piedmont,   Alabama,   for
approximately  $32.4  million.   Bostrom  was  founded  in  1935  in  Milwaukee,
Wisconsin.

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        In January 1995, the Company through Freight Car Services,  Inc. ("FCS")
acquired a freight car rebuilding and repair facility in Danville,  Illinois for
$2.5 million and spent $2.6 million for refurbishment. FCS started operations in
October 1995.

        In August 1995, the Company  acquired Truck Components Inc.  ("TCI"),  a
holding  company for  Gunite,  Brillion,  and Fabco,  for  approximately  $266.1
million in cash, including the repayment of TCI's existing indebtedness. TCI was
formed in 1987 in order to acquire  Gunite and Fabco from  Fruehauf  Corporation
now known as K-H  Corporation  ("K-H").  In 1988,  TCI acquired  Brillion from a
group of  investors  led by the Robins  Group.  Gunite was founded in  Rockford,
Illinois  in 1854 as a custom  manufacturer  of cast  iron  products.  Fabco was
founded in 1918 in Oakland, California as a manufacturer of truck components and
specialty   vehicles.   Brillion  was  founded  in  1890  as  a  farm  equipment
manufacturer and constructed its first iron foundry in 1933.

        In April 1999, the Company acquired Imperial, headquartered in Portland,
Tennessee, for approximately $61.6 million,  consisting of $58.8 million in cash
and 156,740  shares of the Company's  common stock.  The purchase  price is also
subject to a contingent  earn-out of up to $4.0 million  based on the  operating
results of  Imperial's  Washington  plant for the 24 months  ending  April 2001.
Imperial was founded in 1962.

        In May 1999, the Company  through Gunite  acquired EMI Company,  an iron
foundry and machining company located in Erie,  Pennsylvania,  for $18.7 million
in cash.

        In June 1999,  the Company  sold its freight car  operations,  including
JAC, FCS and JAIX Leasing  Company,  for  approximately  $101.3 million in cash,
contingent  additional  consideration  of $20.0  million,  a 20  percent  equity
interest  in the buyer  comprised  of common  and  preferred  stock and  buyer's
assumption  of  substantially   all  of  the  liabilities  of  the  freight  car
operations, including $14.4 million in debt.

        Following the sale by the Company of its freight car  operations in June
1999, the Company changed its name from "Johnstown America Industries,  Inc." to
"Transportation Technologies Industries, Inc."

        In  September  1999,  the  Company  through   Imperial   acquired  Clark
Engineering  and  Manufacturing,  Inc., a manufacturer of a broad range of metal
parts and  accessories for the heavy-duty  truck industry  located in Ft. Worth,
Texas, for approximately $8.5 million.

        In October 1999, the Company through Imperial  acquired BMC of Virginia,
Inc., which  manufactures,  warehouses,  assembles and sequences  components for
heavy-duty truck  manufacturers Volvo and Freightliner and is located in Dublin,
Virginia, for approximately $11.0 million.

RECENT EVENT

        On December 14, 1999, an investor  group (the  "Investor  Group") led by
senior members of management of the Company, including Thomas M. Begel, Chairman
and Chief Executive Officer, and Andrew M. Weller, President and Chief Operating
Officer,  made a proposal  to acquire  all of the  outstanding  shares of common
stock of the Company at a price of $20.00 per share.

        On January  28,  2000,  the Company  entered  into a  definitive  merger
agreement  providing for the  acquisition of the Company by the Investor  Group.
Under the terms of the merger agreement,  which was unanimously  approved by the
Company's Board of Directors after receiving the unanimous  recommendation  of a
special  committee  of  independent  members  of  the  Board,  the  Company  and
Transportation  Acquisition  I Corp.,  ("Acquisition")  a company  formed by the
Investor  Group,  were required to commence a joint tender offer to purchase for
$21.50 per share in cash all of the outstanding  shares of the Company's  common
stock.

        The Company and the Investor  Group have  received  executed  commitment
letters from financial  institutions providing for all of the necessary debt and
equity financing for the proposed acquisition.

        The tender  offer,  which  commenced on February 3, 2000 and will remain
open until March 3, 2000,  unless  extended,  will be followed by a merger under
which those shares not tendered will be converted  into the right to receive the
same $21.50 per share in cash.  The offer is  conditioned  on the funding of the
committed  financing,  the  tender  of a  sufficient  number  of  shares to give
Transportation Acquisition I Corp. ownership of at least a majority of the fully

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diluted  outstanding shares of the Company after giving effect to the repurchase
of shares by the  Company  in the offer,  the  agreement  of the  holders of the
Company's outstanding 11-3/4% notes to either sell their notes to the Company or
consent  to  certain  amendments  to the  indentures  for such  notes  and other
conditions.

        The  Board's  approval of the  transaction  was based,  in part,  on the
recommendation  of the special  committee  of  independent  members of the Board
which  had been  formed  to  consider  the  proposal.  The  special  committee's
recommendation  was based on a number of factors,  including  the opinion of the
special committee's independent financial advisor, Merrill Lynch & Co., that the
consideration  being  offered  is fair  from a  financial  point  of view to the
Company's stockholders (other than the Investor Group).

        Concurrently with the joint tender offer for the Company's common stock,
the Company also  commenced  offers to purchase and consent  solicitations  with
respect to both its 11-3/4% Senior  Subordinated  Notes due 2005 and its 11-3/4%
Series C Subordinated Notes due 2005.

        The foregoing is discussed in more detail in the Schedule TO relating to
the tender offer for the Company's shares filed with the Securities and Exchange
Commission  by  Acquisition  and the Company on February 3, 2000,  including the
Offer to Purchase and other  exhibits  thereto,  and the related  Schedule 14D-9
filed with the Securities and Exchange  Commission by the Company on February 3,
2000.

PRODUCT LINES

GUNITE

        Gunite is a leading  North  American  supplier of wheel-end  components,
such as brake  drums,  disc wheel hubs,  spoke  wheels and rotors to OEMs in the
heavy-duty truck industry with QS9000  certification.  Gunite also supplies such
products  to the  aftermarket  as  well as the  medium-duty  truck  and  trailer
markets.

        OEMs have increasingly stressed product quality,  engineering capability
and  customer  service,  as well as price,  in awarding  business to  suppliers.
Gunite has  distinguished  itself among  wheel-end  component  manufacturers  by
providing its customers with dependable  design and testing support and reliable
customer  service.  Gunite works  closely with its  customers'  product  design,
marketing and purchasing  departments,  including  vendor quality  certification
personnel.  Gunite  has  received  top  quality  awards  from  all of its  major
customers.  Obtaining  quality  awards  is a  competitive  advantage  because  a
manufacturer  must  first go through  the OEM's  quality  certification  process
before it can become a qualified supplier.

        MARKETS

        The truck  components  industry in which Gunite  competes is composed of
two primary markets:  (i) the OEM market;  and (ii) the vehicle  maintenance and
repair sector, also called the replacement market or aftermarket. The OEM market
served  by  Gunite  includes  truck   manufacturers  such  as  Navistar,   Mack,
Freightliner, PACCAR, Volvo and Western Star trucks. For the twelve months ended
December 31, 1999,  approximately  69% of Gunite's total net sales were to truck
and trailer OEMs and the remainder was to the aftermarket.

        OEMs use  independent  suppliers  for the  production  of most parts and
components.  The use of independent  suppliers,  also known as  outsourcing,  is
largely a result of the ability of independent suppliers to design, engineer and
manufacture  production parts and components at a more competitive cost than the
OEMs.  Outsourcing also enables the OEMs to be more responsive to changes in the
marketplace  and in  technology  and to  reduce  their  capital  investment.  In
general, OEMs increasingly have turned to suppliers to design products, engineer
prototypes and manufacture  parts and components for the life of their vehicles.
The OEMs also have sought to minimize the size of their  supplier  base in order
to  improve  quality,  efficiency  and their  ability to manage  their  supplier
network.   The  success  of  suppliers  in  obtaining  and  maintaining   supply
relationships  has been a  function  of four  factors:  (i)  consistent  product
quality;  (ii)  competitive  pricing;   (iii)  technical  expertise;   and  (iv)
responsiveness  to changes in the  marketplace.  The net effect of these changes
has been to increase the opportunities for, as well as the competitive pressures
faced by, independent suppliers to the OEM market.

        Sales of Gunite's  products to OEMs are affected,  to a large extent, by
heavy-duty  truck  production  volume  which,  in turn,  is dependent on general
economic conditions. Historically, heavy-duty truck sales have been cyclical.

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In  general,  Gunite's  sales  tend to follow the North  American  Class 8 truck
build.

        Gunite  seeks  to  increase   sales  to  the  OEM  market   through  the
"standardization" process. In this process, Gunite sales representatives call on
OEM purchasers and Gunite's  engineers work with OEM engineering  departments to
attempt to have  Gunite  products  selected  for OEM  product  lines as standard
equipment.  Once a product is chosen as standard on a line of trucks,  any order
of a truck in that line will come with the standard  product  unless the end-use
customer  specifies a  different  type of  product.  If a  different  product is
specified  by an  end-user,  the  end-user  is  generally  required  to  pay  an
additional  fee to the OEM.  Selection of a Gunite product as standard on a line
of trucks will generally  create a steady demand for that product.  Because such
demand is a derivative of the sales of the particular truck line, being standard
on certain lines may be more advantageous than being standard on others.  Gunite
wheel-end   components  are  currently  standard  on  certain  Navistar,   Mack,
Freightliner, and PACCAR truck lines.

         Aftermarket  customers  include the service  organizations of the OEMs,
parts  manufacturers and distributors.  Aftermarket sales principally consist of
the  sale  of  brake  drums.  Sales  of  Gunite's  products  to the  aftermarket
historically  have been less adversely  affected by general business  conditions
since vehicle  owners are more likely to repair  vehicles than purchase new ones
during  recessionary  periods.  Aftermarket  sales, which are tied to the age of
vehicles in service and the need for replacement  parts, have been increasing in
recent years due to Gunite's focus on the aftermarket,  where margins are higher
when compared to the OEM market, and the fact that Gunite's products are offered
as standard on more trucks than any of its competitors'  products.  However,  in
1999 Gunite's  sales to the  aftermarket  decreased due to capacity  constraints
resulting from record levels of OEM demand.  Gunite intends to utilize a portion
of its additional capacity at the newly acquired Erie,  Pennsylvania facility to
increase its aftermarket sales.

        PRODUCTS

        Gunite  supplies the medium- and  heavy-duty  truck and trailer  markets
with a full line of wheel-end components.  These products are made by Gunite and
delivered to the customer  either as component  parts or in  assemblies.  Gunite
products are utilized in four basic systems:  (i) Disc Wheel Hub-and-Brake Drum;
(ii) Spoke Wheel-  and-Brake Drum; (iii) Spoke  Wheel-and-Brake  Rotor; and (iv)
Disc  Wheel  Hub-and-Brake  Rotor.  Generally,  brake  drums and  rotors are the
braking devices that work with the vehicle's braking system to stop the vehicle.
Wheel hubs and spoke wheels are the  connecting  pieces between the brake system
and the axle and upon which the rim and tire are mounted.

        Truck  builders  have  recently  purchased a greater  percentage of disc
wheel hubs in place of spoke wheels due to their  perceived  better  performance
characteristics and ease of maintenance. However, spoke wheels are still popular
for severe duty due to their higher strength.

        Gunite's product line also includes  finely-machined hubs and wheels for
ABS, which enhance vehicle safety and have been mandated for all new trucks with
air brakes since March 1997,  and all new  trailers  with air brakes since March
1998.  The  production  of ABS parts  constitutes  a  value-added  process,  and
additional components and machining are required.

        In response to growing  concerns  by truck  fleet  operators  over brake
adjustment,  Gunite  introduced its initial  automatic slack adjuster product in
1984. The use of automatic slack adjusters reduces  maintenance costs,  improves
braking  performance and minimizes  side-to-pull  and stopping  distance.  Slack
adjusters were mandated for all new trucks in October 1994.

        CUSTOMERS

        Gunite  markets its wheel-end  component  and assembly  products to more
than 400  customers,  including  most of the major  North  American  medium- and
heavy-duty  truck and  trailer  manufacturers,  relying on account  managers  to
service  OEMs  and  regional  sales   managers  and  a  nationwide   network  of
approximately 300 independent distributors to sell to the aftermarket.

        Gunite has long-term  relationships  with many of its larger  customers,
many of whom have purchased  wheel- end systems and  components  from Gunite for
more  than 25  years.  Gunite's  top  five  OEM  customers  in 1999  represented
approximately  68% of Gunite's  total net sales in 1999,  with sales to Navistar
accounting for approximately 25% of

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Gunite's total net sales in 1999. Due to Gunite's capacity constraints resulting
from very high OEM  demand in 1999,  Gunite  was  unable to  provide  all of the
product requested by certain customers. Utilizing the additional capacity at its
newly acquired Erie,  Pennsylvania  facility,  Gunite intends to provide its OEM
customers with all product requested by each customer and, as a result,  improve
its strained relationships with such customers.

        Many  truck  manufacturers   require  quality   certification  of  their
suppliers,  and Gunite  undergoes  periodic  quality surveys by all of its major
customers.  Gunite is QS9000 certified and has received  numerous quality awards
from its customers,  including Ford Motor Company's "Q1," Freightliner's "Master
of Quality" and ISO 9000 equivalent,  PACCAR's "Supplier Quality  Certification"
and Volvo's ISO 9000  equivalent.  The  primary  criteria on which such  quality
certifications  and  awards  are based  include  quality  of  product,  delivery
performance,  inventory  control,  operator  knowledge,  condition  of facility,
receiving inspection of incoming materials, record maintenance and retention and
equipment gauge controls.  Quality certification  requirements tend to limit the
number of  suppliers  which can compete in the safety  intensive  product  lines
manufactured by Gunite and benefits high-quality suppliers such as Gunite.

        MANUFACTURING

        Gunite has a fully  integrated  manufacturing  operation  that  combines
high-quality  castings  from  its  Rockford,  Illinois  and  Erie,  Pennsylvania
foundries and from Brillion and machining  capabilities at its Elkhart,  Indiana
and Erie, Pennsylvania facilities. Most of the components produced by Gunite are
high-volume  products that are critical to the safe operation of the vehicle. As
a result,  Gunite must combine efficient  production with comprehensive  product
testing.  Implementation of statistical  process controls ("SPC") insures strict
control of the manufacturing process and consistent quality.

        The  manufacturing  process  involves  melting  purchased scrap iron and
steel,  adding  various  alloys and pouring the molten  metal into molds made of
sand.  After the molten  metal is poured  into the  molds,  the  castings  cool,
solidify and are removed.  Once the rough  castings have been cleaned,  they are
transferred  to the Elkhart,  Indiana or Erie  Pennsylvania  plant for machining
through a variety of automated plant techniques.  Both the casting and machining
operations are subject to statistical  sampling and charting  techniques.  Other
manufacturing processes include painting, welding and assembly.

BRILLION

        Brillion   operates  one  of  the  nation's  largest  job  casting  iron
foundries,  producing a wide variety of high-quality,  complex iron castings for
transportation-related and a wide variety of other markets. Sales to the medium-
and heavy- duty truck and trailer industries  accounted for approximately 36% of
Brillion's sales (including sales to Gunite) in 1999.

        Brillion  also  designs,  manufactures  and  markets  a  range  of  farm
equipment  products for the  "behind-the-  tractor" market.  These  pulverizers,
seeders,  mulchers,  deep tillers and cultivators are marketed  nationally under
the Brillion  trade name through a  nationwide  network of 1,050 farm  implement
dealers and  distributors.  Sales of these  products were  approximately  11% of
Brillion's sales in 1999.

        MARKETS

        Brillion  markets  its  products  on a  job-by-job  basis to the  truck,
automotive and equipment  industries.  Brillion is one of the leaders in ductile
iron technology,  such as complex, thin wall and near net shape castings, in the
markets it serves.  In addition to being easily  machinable and  wear-resistant,
ductile iron has greater  strength (an important factor for customers who desire
a lighter finished  product) and elasticity than gray iron. As a result of these
superior properties,  management expects the demand for ductile iron castings to
increase.  This shift towards  ductile iron products may replace other  products
(such as  lighter-weight  aluminum  products)  that gray iron products could not
replace, and is not expected to adversely impact Brillion's business. Gray iron,
the oldest and most widely  used cast iron,  is readily  formed  into  intricate
shapes  which are  easily  machinable  and  wear-resistant.  For the year  1999,
ductile iron castings  represented  approximately  58% of  Brillion's  foundry's
total tons sold, while gray iron represented the balance.

        PRODUCTS

        As  illustrated in the table below,  Brillion  produces a broad range of
gray and ductile iron castings used in the

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manufacture of components  for the truck,  automotive and a variety of light and
heavy equipment industries.  Currently, Brillion utilizes over 3,700 patterns to
produce castings that range in weight from one pound to nearly 350 pounds,  with
the majority below 100 pounds. Castings are made to the specific requirements of
each  customer.  The customer  consults with Brillion to specify such  important
considerations as physical properties,  surface finish, dimensional accuracy and
methods of inspection for each casting.

                                FOUNDRY PRODUCTS

* Automotive and Truck Brackets      * Hydraulic-Valve Bodies
* Bearing Cups                       * Manifolds
* Brake Calipers and Adapters        * Pressure Plates
* Clutch Housings                    * Small Engine Camshafts and Crankshafts
* Farm Machinery Castings            * Steering Housings
* Flywheel Housings                  * Transmission Cases
* Flywheels                          * Wheel Hubs

        Brillion  markets its  castings,  directly  and  indirectly,  to OEMs in
various  industrial  markets.  The table below provides a list of representative
end products in which Brillion's castings are used.

                END PRODUCTS IN WHICH BRILLION CASTINGS ARE USED

* Air-Cooled Engines                 * Industrial Lift Trucks
* Automobiles and Light Trucks       * Lawn and Garden Equipment
* Construction Equipment             * Locomotive Engines
* Diesel Engines                     * Marine Engines
* Farm Equipment                     * Medium- and Heavy-Duty Trucks
* Fluid Power Pumps and Motors       * Oil and Gas Field Machinery and Equipment
* Hardware                           * Pumps and Pumping Equipment
* High-speed Drives and Gears        * Small Tools
* Home Shop Tools



        CUSTOMERS

        Over  99% of  Brillion's  net  foundry  sales in 1999  were to  existing
customers.  Once production begins on a product, the same foundry will generally
manufacture that product for the product's life cycle.

        Brillion has over 225 foundry customers, a majority of which are located
in the Midwest, East and Southeast.  Brillion's top five unaffiliated  customers
accounted for  approximately  28% of Brillion's  1999 total net sales.  Brillion
also serves as an important source of castings for Gunite,  with sales to Gunite
representing  approximately  14% of  Brillion's  total net  sales in 1999.  As a
result of Gunite's conversion of its Erie,  Pennsylvania facility to exclusively
produce  wheel-end  components,  approximately $13 million in annual revenues of
job shop foundry work was transferred to Brillion.

        Brillion  works closely with  customers in order to insure that castings
meet all required specifications,  including machinability, dimensional accuracy
and overall  quality.  Brillion's  engineers work with customers from concept to
market  with  respect to new  products.  Brillion's  strategy is to focus on the
market  for higher  margin  castings,  as well as for  products  requiring  new,
innovative  castings designs.  Unlike Gunite,  Brillion's products are primarily
designed by its customers,  and thus the product  designs are proprietary to the
customers.

        Brillion has enjoyed long-term,  stable  relationships with the majority
of its  customers  and is  certified  as a  preferred  supplier  by  most of its
customers.  Brillion's  quality  system  is  certified  to ISO  9002 and QS 9000
quality standards and Brillion has received  Caterpillar's  "Certified  Supplier
Status" and was approved by Ford's "Technical  Service  Capability  Survey." The
primary  criteria  on which  such  quality  certifications  and awards are based
include quality of product,  delivery performance,  inventory control,  operator
knowledge,  condition of facility,  receiving  inspection of incoming materials,
record maintenance and retention and equipment gauge controls. A quality

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certification is required by most  sophisticated  purchasers,  thereby enhancing
the  competitive  advantage  of suppliers  like  Brillion  that have  achieved a
quality certification.

        MANUFACTURING

        In  general,  Brillion's  customers  specify  the  properties  of  their
castings, such as hardness, strength and dimensions, and Brillion determines how
best to meet those specifications. Brillion engineers work with its customers to
develop  an  efficient  manufacturing  process.  Brillion  constantly  tests and
monitors  the  manufacturing  process  in  order to  maintain  the  quality  and
consistency of its castings.  The  manufacturing  process involves melting iron,
steel scrap and pig iron,  adding  various  alloys and pouring the molten  metal
into molds made primarily of sand. Most of the castings manufactured by Brillion
must meet strict dimensional control requirements specified by its customers. As
a result,  Brillion uses SPC in every phase of the production  process,  and all
employees are given extensive SPC training.  The Company  believes that Brillion
has the most advanced core capabilities in the industry,  allowing for efficient
and  environmentally   superior  core  processes  that  are  necessary  for  the
production of quality, complex thin-wall and lighter weight products. Production
lines are designed to  accommodate  a wide  variety of products and volumes.  In
addition,  Brillion's  multiple  production  lines provide  flexibility  to move
production  from  line  to  line  to  meet  customer   scheduling   changes  and
requirements.

IMPERIAL

        Imperial  is a leading  Tier I and Tier II  supplier of body and chassis
components for the heavy-duty  truck and transit bus markets.  All of Imperial's
facility's are QS9000  certified,  other than those facilities  acquired in late
1999.

        MARKETS

        Imperial's  products are sold primarily to the heavy-duty  truck OEMs as
well as to transit  bus OEMs,  the heavy- duty truck  aftermarket  and to Tier I
suppliers  who in turn sell the  products to the  heavy-duty  truck  OEMs.  When
Imperial's  products are  specified  for a given model of truck,  the  specified
product  will  generally be part of all trucks of that type for the life of that
model of truck.

        PRODUCTS

        Imperial  supplies  a large  number  of  body  and  chassis  components,
including  battery and tool boxes,  bumpers,  crown and grill  assemblies,  door
assemblies,  fenders,  front end cross members,  fuel tanks,  and roofs and roof
bows.  Imperial also provides a number of services,  including  chrome  plating,
assembly, warehousing and sequencing.

        CUSTOMERS

        Imperial's  customers  include many of the  heavy-duty  OEMs,  including
PACCAR,  Freightliner  and Volvo, as well as transit bus  manufacturers  such as
Gillig  Corporation  and Nova Bus  Incorporated.  Imperial's  top five customers
accounted for 96% of Imperial's 1999 net sales,  with PACCAR  (including  PACCAR
Parts) accounting for approximately 78% of Imperial's 1999 net sales.

        MANUFACTURING

        Imperial  has  manufacturing  and  assembly   facilities  in  New  Deal,
Tennessee,  Decatur,  Texas, Ft. Worth, Texas, Dublin,  Virginia,  and Chehalis,
Washington.  Imperial also has chrome plating facilities in Portland,  Tennessee
and Gainesville, Texas. Many of these facilities are located near OEM facilities
and provide  line setting  services for the OEMs.  Imperial is in the process of
constructing two new facilities,  funded by its former owners, to be leased upon
completion  in  2000,  one of  which  is a  fabricating  facility  in  Portland,
Tennessee to replace its existing facilities in such location and the other is a
chrome plating facility in Gainesville,  Texas to replace its existing  facility
in such location.

BOSTROM

        Bostrom designs,  manufactures and markets a full line of air suspension
and static seating systems primarily for the heavy-duty truck market. Bostrom is
ISO 9001 and QS9000 certified.

                                        8


<PAGE>



        MARKETS

        Bostrom is a leading  manufacturer of seating systems for the heavy-duty
truck industry.  Bostrom's  products are sold primarily to heavy-duty truck OEMs
as well as to the aftermarket. Bostrom also supplies its line of seating systems
to the medium-duty truck and bus and transit bus markets, as well as to a number
of specialty  markets such as construction and agriculture  vehicles.  Bostrom's
seats are  offered  as  standard  or as an option  by all major  North  American
heavy-duty truck OEMs.

        CUSTOMERS

        Bostrom's  customers include all of the major North American  heavy-duty
truck  manufacturers.  Bostrom's top five customers  accounted for approximately
84% of Bostrom's 1999 net sales, with Freightliner  accounting for approximately
48% of such sales.

        MANUFACTURING

        Bostrom's manufacturing facility is located in Piedmont,  Alabama. For a
number of its OEM customers,  Bostrom ships its seats to line-setting facilities
which it has  established  near  certain  OEM  plants  to  provide  just-in-time
inventory  of seats to the  assembly  line in the order  that the seats  will be
used.

FABCO

        Fabco designs,  manufactures  and markets  steerable  drive axles,  gear
boxes  and  related  parts  for  the  North  American  on/off-road  medium-  and
heavy-duty truck markets. Fabco is QS9000 certified.

        MARKETS

        Fabco's  products  are sold  primarily  to the OEM market for use in the
construction,  military, mining and municipal service markets. Fabco's axles and
gear boxes are offered as  standard or as an option by all major North  American
heavy-duty truck  manufacturers,  and Fabco is a leading supplier of these items
in the North American heavy- duty truck market.

        PRODUCTS

        Fabco  supplies  a full  line of  steerable  drive  axles  for the North
American on/off-road medium- and heavy-duty truck and specialty vehicle markets.
Fabco's drive axles are rated at capacities ranging from 12,000 to 23,000 pounds
to serve Class 6, 7 and 8 trucks.  End-users  of Fabco's  axles  require ease of
steering   and  high  speed   driving  for  on-  highway  use  while   demanding
maneuverability  and  functionality  for  off-highway  use.  Fabco's  axles  are
designed to increase  durability and maintenance  accessibility.  Fabco believes
that the ease of  operating  and  servicing  Fabco's  products  are  competitive
advantages  that lead to ongoing  demand for steerable  drive axles.  Fabco also
manufactures a wide range of medium- and heavy-duty  gear boxes.  Gear boxes are
used by vehicles that operate auxiliary  equipment in the construction,  oil and
gas field services and utility  industries,  among others.  Fabco also sells its
products in the aftermarket.

        CUSTOMERS

        Fabco's  customers  include most of the major North American on/off road
medium- and heavy-duty truck and specialty vehicle  manufacturers.  The majority
of Fabco's sales are made to OEM customers with which it enjoys relationships of
over 25 years. Sales during 1999 to Fabco's five largest customers accounted for
approximately  80% of Fabco's  total net sales,  with  Navistar  accounting  for
approximately 61% of such sales.

        MANUFACTURING

        Fabco's manufacturing facility is located in Oakland, California.

                                        9


<PAGE>



GENERAL

        COMPETITION

        The  Company  operates  in  highly   competitive   markets.   No  single
manufacturer  competes with respect to all products manufactured and sold by the
Company  in  the  heavy-  and  medium-duty  truck  market,  and  the  degree  of
competition varies with different products.  In each market the Company competes
on the basis of price, its manufacturing and distribution capabilities,  product
development  and  product  quality,   delivery  and  service.  Gunite's  primary
competitors  in the wheel end  component  market for Class 6, 7 and 8 trucks and
trailers  are Meritor  Corporation  (Dayton  Walther)  and Webb Wheel  Products.
Brillion's major competitors include 10 to 12 foundries operating in the Midwest
and Southern regions,  including Waupaca Foundry,  Inc., Grede Foundries,  Inc.,
Western  Foundry,  Neenah Foundry  Company,  Intermet  Corporation  and Citation
Corporation. Imperial's major competitors include 8 to 12 metal fabricators with
large press capacity and chrome platers, including Quality Industries, Inc., M&J
Industries, Mark Concepts, American Fabricators and Linton Industries. Bostrom's
principal  competitors  include  National Seating as well as a number of smaller
seating  manufacturers.  Fabco's primary  competitor in the steerable drive axle
market for the on/off-road  medium- and heavy-duty truck and specialty  vehicles
is Meritor Corporation (formerly Rockwell Corporation.)

        Due  to  short  production  turnaround  times  from  order  to  delivery
resulting  from  the  just-in-time  inventory  systems  utilized  by many of its
customers,  the company's truck components and other castings  operations do not
normally carry a material amount of backlog orders.  Most of the Company's sales
contracts are made pursuant to purchase orders and releases which are subject to
change or cancellation by the customer.

        SUPPLIERS AND RAW MATERIALS

        The major raw material for the  Company's  foundry  operations  is steel
scrap and for the  Company's  fabricating  operations  is sheet and formed steel
which  is  purchased  from  various  sources.   The  Company  has  no  long-term
contractual  commitments  with  any  steel  or  scrap  suppliers,  and  does not
anticipate  any  difficulty  in  obtaining  steel or scrap  because of the large
number of potential  suppliers and its position as a major purchaser.  Increases
in scrap prices are generally  passed through to customers  either by means of a
fluctuating  surcharge,  which  is  calculated  and  adjusted  on a  monthly  or
quarterly basis.  Steel and formed steel is primarily  purchased through an OEMs
steel  purchasing  program.  Other major foundry raw materials,  such as silicon
sand,  binders,  sand  additives and coated sand,  are  purchased  from multiple
sources.  Electricity,  coke and natural  gas,  the primary  energy  sources for
melting  operations,  are in adequate supply and reasonably priced.  Other major
fabricating  and seating  materials,  such as  aluminum,  foam and  fabric,  are
purchased from multiple sources.

        LABOR RELATIONS AND EMPLOYEES

        At December 31, 1999, the Company had approximately 3,980 employees.  Of
these,  approximately 705 are salaried  employees and the balance are paid on an
hourly  basis.  Approximately  1,800 or about 45% of all employees are member of
unions.  The Company has collective  bargaining  agreements  with several unions
including the United  Autoworkers,  the  Brotherhood  of  Teamsters,  the United
Steelworkers  of  America,  the United  Paperworkers  International  Union,  the
Patternmarkers  League of North  America and the  International  Association  of
Machinists and Aerospace Workers. Each of the Company's unionized facilities has
a separate  contract with the union that represents the workers employed at such
facility  including the following  contracts  entered into since early 1999: (1)
Brillion's three-year contract with the United Paperworkers  International Union
entered  into  in  August  1999;  (2)  Fabco's   four-year   contract  with  the
International  Association of Machinists and Aerospace  Workers  entered into in
September  1999;  (3)  Gunite's   four-year   contract  with  the  International
Brotherhood  of  Teamsters,  Chaffeurs,  Warehousemen  and  Helpers  of  America
covering  employees  at  Gunite's  Elkhart  Plant #1  entered  into in July 1999
following  a four week  strike  and (4)  Gunite's  four-year  contract  with the
International Brotherhood of Teamsters,  Chaffeurs,  Warehousemen and Helpers of
America  covering  employees  at  Gunite's  Elkhart  Plant  #2  entered  into in
September 1999. The Company's  union contracts  expire at various times over the
next few years,  with no contract  expiring before April 2001. While the Company
considers its  relations  with its employees to be good at each of the Company's
subsidiaries,  there  can be no  assurance  that  the  Company  will  reach  new
agreements  upon expiration of such union contracts or that the failure to reach
new  agreements  will  not  have a  material  adverse  effect  on the  financial
condition or results of operations of the Company.

                                       10


<PAGE>



        PATENTS AND TRADEMARKS

        The Company has numerous  United States and foreign  patents and pending
applications,  registered  trademarks and trade names.  While the existence of a
patent is prima facie  evidence of its validity,  the Company cannot assure that
any of its patents will not be challenged  nor can it predict the outcome of any
such challenge.

ENVIRONMENTAL MATTERS

        COMPLIANCE MATTERS

        The Company's  subsidiaries are subject to comprehensive  and frequently
changing federal, state and local environmental laws and regulations,  including
those governing emissions of air pollutants,  discharges of wastewater and storm
waters,  and the disposal of non-hazardous  and hazardous  waste.  Many of these
laws authorize the imposition of civil and criminal  sanctions upon corporations
that fail to comply with the  statutory  or  regulatory  requirements.  In 1999,
1998,  and  1997,  the  Company's  capital   expenditures  for  compliance  with
environmental  requirements were approximately $0.1 million,  $2.1 million,  and
$0.7 million,  respectively.  These figures do not include  routine  operational
compliance  costs,  such  as  the  costs  for  the  disposal  of  hazardous  and
non-hazardous solid waste, which were approximately $4.4 million,  $5.7 million,
and  $5.3  million  in  1999,  1998  and  1997,   respectively.   The  Company's
subsidiaries  have budgeted  $3.5 million for  environmentally  related  capital
expenditures  in 2000. The Company's  capital  expenditures  for compliance with
environmental requirements and for routine operational compliance costs, such as
the costs for the disposal of hazardous and  non-hazardous  solid waste, for all
non-foundry  facilities  are not  material.  Other than for  certain  immaterial
expenditures, the Company's non-foundry subsidiaries have not budgeted funds for
capital expenditures in 2000 to comply with environmental laws.

        Pursuant to a National Pollutant Discharge  Elimination System ("NPDES")
permit,  Gunite previously discharged noncontact cooling water from its Rockford
facility  to a pond (the  "Rockford  Pond"),  formerly  owned by Gunite and by a
prior  owner of  Gunite  that is  adjacent  to the  Gunite  plant.  Gunite  also
periodically had accidental, unpermitted discharges of process wastewater to the
Rockford  Pond,  which  Gunite  has  reported  to  the  Illinois   Environmental
Protection  Agency  ("IEPA").  In  addition,  Gunite  had not  received  express
authorization  from the current or immediately  preceding  owner of the Rockford
Pond for any of the discharges. In order for Gunite to eliminate all discharges,
the City of  Rockford  obtained  an  easement  to allow  Gunite to  construct  a
conveyance that directs  discharges of noncontact  cooling water and storm water
from the Gunite  facility to the Rock River,  and the IEPA has issued a modified
NPDES permit to Gunite,  substituting the Rock River as the outfall for Gunite's
discharge.  The  conveyance  was completed in February  1995. The modified NPDES
permit contains a stringent limit for the discharge of total residual  chlorine.
Gunite  estimates  that the  capital  cost for  installing  a  treatment  system
allowing its  discharges to comply with this limit could be  approximately  $0.2
million,  although Gunite is exploring a less expensive treatment system. Gunite
has appealed to the  Illinois  Pollution  Control  Board to remove or modify the
chlorine  limit  from  the  permit  (Gunite  Corp.  v.  Illinois   Environmental
Protection  Agency,  PCB 94-382,  filed  December 12,  1994).  IEPA has recently
agreed to  eliminate  the  chlorine  limit from the permit,  thereby  laying the
groundwork for a potential settlement of this appeal. The parties are attempting
to conclude such a settlement prior to the hearing date, set to commence May 15,
2000. The proposed settlement would be subject to public notice and comment, and
ultimate disposition by the Illinois Pollution Control Board. The cost to Gunite
of  constructing  the conveyance to the river (not  including any  environmental
remediation   costs  that  might  be  incurred  in  connection  with  historical
discharges to the Rockford Pond) was approximately $0.3 million.

        In 1998,  the  Occupational  Safety and Health  Administration  issued a
citation to Gunite  concerning  the  Rockford  facility.  OSHA imposed a fine of
$407,000 on Gunite  with  respect to this  citation.  Gunite has  contested  the
imposition of this fine,  and believes it has  meritorious  defenses.  Gunite is
currently  pursuing an  administrative  appeal from the imposition of this fine,
with a  hearing  before  the  administrative  law  judge  scheduled  to occur in
mid-2000.  The OSHA citation and fine relate to certain indoor air emissions and
the use of protective equipment, both alleged by OSHA to be in violation of OSHA
rules.

        On  October  25,  1999,  IEPA  issued a notice of  violation  to Gunite,
alleging  that  at the  Rockford  facility,  certain  fugitive  particulate  air
emissions  are in violation of state laws.  On December 20, 1999,  IEPA rejected
Gunite's compliance proposal,  which had been submitted by Gunite on December 3,
1999. By letter of January 17, 2000,  Gunite has informed IEPA that the Rockford
facility has achieved  compliance based on recent  observations  which confirmed
that  Gunite's  remedial  work  was  successful  in  eliminating  any  violative
particulate air emissions. Gunite is negotiating

                                       11


<PAGE>



with IEPA to settle this matter, but cannot rule out the possible  imposition of
fines or penalties.

        The  Wisconsin  Department  of Natural  Resources  ("WDNR") has notified
Brillion  that it is deemed to be in  compliance  with the  Wisconsin air toxics
program,  pending  a review  of a  compliance  plan  submitted  by  Brillion  in
September 1993, although Brillion is currently exceeding Wisconsin air emissions
limits for benzene and other air toxic compounds.  Brillion's submittal included
a plan for compliance with the emission limitations for arsenic, barium, cadmium
and formaldehyde,  and a request for a variance with respect to its emissions of
benzene.  The Company  believes  that  compliance  with  Wisconsin's  air toxics
regulations  apparently  is an  industry-wide  problem,  and WDNR is  developing
compliance  standards  for the  industry  as a  whole.  The  most  recent  state
inspection (June 1999) found Brillion to be in compliance with all Wisconsin air
regulations,  but it is likely  that as  Brillion  continues  its  review of its
operations,  it may find that  certain  of its  emission  sources  will  require
further air pollution  controls.  In addition,  further controls may be required
under the Federal Clean Air Act regulations  that are currently  scheduled to be
promulgated in the year 2000.

        The Company's  subsidiaries'  manufacturing plants are large and complex
facilities.  The environmental regulations to which these facilities are subject
are numerous,  complicated,  often  ambiguous  and  constantly  changing.  It is
possible,  therefore,  that  in  addition  to  the  instances  of  noncompliance
discussed above, there are other areas in which the facilities are not currently
in compliance  with  environmental  laws and  regulations.  The Company does not
currently  believe  that any such  noncompliance  is likely  to have a  material
adverse effect on the Company's  business or financial results.  However,  there
can be no guarantee  that the Company  will not be required to make  substantial
additional expenditures to remain in or achieve compliance in the future.

        REMEDIATION MATTERS

        In  addition  to   environmental   laws  that   regulate  the  Company's
subsidiaries'   ongoing  operations,   the  subsidiaries  also  are  subject  to
environmental  remediation  liability.  Under  the  Comprehensive  Environmental
Response,  Compensation  and Liability Act ("CERCLA") and analogous  state laws,
certain  persons may be liable as a result of the release or threatened  release
of hazardous  substances into the environment.  Such persons include the current
owner or operator of property  where such release or  threatened  releases  have
occurred,  any  persons  who owned or  operated  such  property  during the time
hazardous substances were disposed of at such property, and persons who arranged
for the disposal of  hazardous  substances  at such  property.  Liability  under
CERCLA  is strict  and,  in most  cases,  joint and  several,  meaning  that any
responsible  party could be held  liable for all of the costs  incurred or to be
incurred in  investigating  and  remediating a release or threatened  release of
hazardous  substances,  although liability at most CERCLA (and similar) sites is
shared among all of the solvent potentially  responsible  parties ("PRPs").  The
liability of PRPs is typically  determined by the cost of the  investigation and
remediation, the amount and toxicity of hazardous substances contributed by each
PRP and the number of solvent PRPs.

         Under CERCLA,  sites may be listed for priority cleanup by being placed
on the  National  Priorities  List  ("NPL").  NPL  sites  are sites at which the
federal   government  may  spend  monies  from  the  "Superfund"  for  long-term
remediation  and then  seek  reimbursement  from  liable  parties.  A much  more
extensive  list  compiled  pursuant  to  CERCLA,   known  as  the  Comprehensive
Environmental  Response,  Compensation,  and  Liability Act  Information  System
("CERCLIS"), includes sites that have been, or are to be, evaluated and "scored"
by the EPA for possible future inclusion on the NPL.

        GUNITE.  With  respect  to claims  involving  Gunite,  TCI and Gunite in
September 1997 entered into a private- party  settlement (the  "Settlement")  of
certain pending litigation with a prior owner of Gunite,  pursuant to which each
of TCI and Gunite and the prior owner  withdrew their claims against each other.
As a result  of the  Settlement,  TCI and  Gunite  will not be  responsible  for
liabilities  and costs  related to certain  alleged  contamination  at  Gunite's
facilities  and at certain  off-site  properties  to the extent  arising  out of
operations  of Gunite  prior to the  acquisition  of Gunite by TCI in  September
1987.

        Gunite is a PRP at three NPL sites,  the  Interstate  Pollution  Control
("IPC")   site  (which  is  adjacent  to  Gunite's   Rockford   facility),   the
M.I.G./Dewane  Landfill  located in Boone  County,  Illinois  and the  Southeast
Rockford Groundwater site located in Rockford,  Illinois. Gunite's connection to
the IPC, the  M.I.G./Dewane  and Southeast  Rockford sites stem from  activities
that took place prior to the  acquisition of Gunite by TCI in 1987.  Pursuant to
the Settlement, TCI and Gunite will not be responsible for liabilities and costs
related to these sites to the extent arising from Gunite's waste disposals prior
to the acquisition of Gunite by TCI in 1987.

                                       12


<PAGE>



        As to the IPC site,  the Company  believes that the waste disposed of at
the IPC site was disposed of prior to the  acquisition  of Gunite by TCI in 1987
and, as a result of the  Settlement,  TCI and Gunite will not be responsible for
such liabilities and costs.

        As to the  M.I.G./Dewane  Landfill site,  the Company  believes that the
waste  disposed of at the  M.I.G./Dewane  Landfill site was disposed of prior to
the acquisition of Gunite by TCI in 1987 and, as a result of the Settlement, TCI
and Gunite will not be responsible for such liabilities and costs.

        The EPA and the City of Rockford have reportedly incurred  approximately
$16 million in response costs to date in connection with the Southeast  Rockford
Groundwater NPL Site,  which is alleged to be down-gradient of the IPC site, but
which Gunite believes,  based on data collected during the  investigation of the
IPC site, is cross- or up-gradient.  In 1996, the City of Rockford demanded that
Gunite pay $1 million in response costs which the City allegedly has incurred at
the site area 7,  commonly  known as the Ekberg Park area,  within the Southeast
Rockford Groundwater NPL Site, based on alleged trans-shipment of Gunite's waste
to the Ekberg  Park area.  In  September  1998,  Gunite and the City of Rockford
reached  a  settlement  of the  City's  claims  against  Gunite  concerning  the
Southeast Rockford site, including Area 7 thereof,  Ekberg Park. In exchange for
Gunite's  settlement  payment (funded  principally by the former owner of Gunite
pursuant to the Settlement),  the City released all of its claims against Gunite
at the site. Further,  the City and the United States allowed Gunite to be named
as an added  beneficiary of the United  States'  covenant not to sue the City in
connection with the Southeast  Rockford site. The United States' covenant not to
sue was  provided  in THE  CONSENT  DECREE  ENTERED ON JANUARY  25,  1999 BY THE
FEDERAL  COURT  IN THE CASE OF  UNITED  STATES  V.  CITY OF  ROCKFORD,  Case No.
98-C-50026.  In April 1999, an instrument  adding Gunite as  beneficiary  of the
covenant not to sue was recorded in the Winnebago County and records  concerning
Gunite's  real  property in  Rockford,  Illinois.  With the recent entry of this
consent decree, all pending claims against Gunite at the Southeast Rockford site
have been resolved.

        Gunite  also may be subject to  liabilities  at other NPL sites or other
locations as a result of its past disposal of hazardous substances.

        As a result of  historical  operations  at the Gunite plant in Rockford,
there are areas  on-site that have been  affected by the disposal or spillage of
raw  materials or wastes.  Gunite does not know at this time whether any cleanup
or  remediation  of such areas will be required  by any state,  local or federal
agency,  although it is possible that such areas may be included in the IPC site
remediation.  The Company  believes that, to the extent  on-site  remediation or
cleanup is required,  most of the alleged contamination would be attributable to
operations of Gunite prior to the acquisition of Gunite by TCI in 1987 and, as a
result of the  Settlement,  TCI and Gunite will not be  responsible  for most of
such liabilities and costs.

        BRILLION.  Brillion is likely to incur investigation  and/or remediation
costs in  connection  with two  landfills  that it used to  dispose  of  foundry
wastes. These landfills are the Brillion Iron Works Landfill, where Brillion was
the  operator  and sole  generator  of waste  from 1980  through  1989,  and the
adjacent  City  of  Brillion  Landfill,  where  Brillion  may  be a  significant
generator of waste.  Brillion  disposed of plant trash at the City landfill from
1970 to 1975 and also  disposed of foundry  wastes in this landfill from 1976 to
1980.  Both of these  landfills  are on the CERCLIS and the  Wisconsin  Remedial
Response  Site  list,  and both have been  scored by the WDNR and  listed on the
State's  Hazard  Ranking List as being above the threshold  for potential  State
remedial  action.  Although it is not  possible  to predict the exact  timing or
amount of the expenditures  that will be made in future years to remediate these
sites, TCI expects that  investigation  and/or  remediation will be required and
that such expenditures could be substantial.

        Further,  Brillion has already  incurred  cleanup costs at the Lemberger
Landfill,  an NPL site in  Whitelaw,  WISCONSIN,  pursuant  to a consent  decree
entered in 1997 in UNITED STATES V. ACE, ET AL., Case No. 96-CV-0739. Additional
remediation of areas  adjacent to the Lemberger  Landfill may be required by the
United States and the State of Wisconsin.

        Brillion has also disposed of foundry  wastes at many other sites in the
Brillion  area,  a few of which are on the  CERCLIS and the  Wisconsin  Remedial
Response Site list. It is possible  that Brillion will incur  remedial  response
costs at some or all of these  sites,  although  at this date,  Brillion  is not
aware of any  action by  federal  or state  regulators  or  private  parties  to
investigate or remediate any of these other sites.

        In 1992,  Brillion  excavated two underground  diesel fuel storage tanks
which were  discovered  to have leaked  diesel fuel into  surrounding  soil as a
result of a 1978 spill. Brillion has removed approximately 300 cubic yards of

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<PAGE>



contaminated fill in connection with this incident.  Although the WDNR initially
indicated that a deed  restriction  would be sufficient for managing this issue,
Brillion has not at this date been able to reach a satisfactory arrangement with
the  owners of the  Brillion  property.  The WDNR has  informed  Brillion  that,
regardless  of the  presence  of a  deed  restriction,  any  future  utility  or
excavation work performed  within the  contaminated  soil area will require soil
remediation.  Accordingly,  Brillion  expects to undertake  additional  soil and
groundwater  analysis,  and possible soil  remediation,  in connection with this
matter.

        As the Brillion  facility has been in  operation  for many years,  it is
possible  that  there are areas at this  facility,  other  than the  underground
storage  tanks,  that have been  adversely  affected by the  handling of foundry
process  materials  and wastes.  Brillion does not know at this time whether any
remediation  of any such areas will be required  by any state,  local or federal
agency.

        Brillion was the Robins Group  (consisting  of the Robins  Family Trust,
Karl F.  Gabler  and First  City  Securities)  entity  that  acquired a Beatrice
subsidiary  (also named  Brillion)  from Beatrice in 1984. In 1993,  the Company
notified  Beatrice  of its  claims for  indemnification  against  Beatrice  with
respect to most of its disposal sites to the extent that liabilities  arise from
incidents   occurring  prior  to  December  31,  1984.  Beatrice  disputed  this
interpretation and later notified Brillion that it will not honor any claims for
indemnification (including the one claim for breach of representation concerning
the Lemberger  Landfill made within two years after the sale). In December 1997,
TCI and Brillion filed suit against Beatrice, and its parent, ConAgra, Inc., for
recovery of costs expended at the Lemberger Landfill, and for declaratory relief
with respect to the cleanup of the  Lemberger  Landfill and adjacent  areas.  In
this suit (BRILLION, ET AL. V. CONAGRA, ET AL., Case No. 97-L-15968),  the court
has denied  Brillion's  motion for judgment on the pleadings and has granted the
defendants' motion to dismiss. TCI and Brillion has appealed this adverse ruling
to the First  District  Appellate  Court in  Illinois.  A decision by this state
appellate  court is expected  in late 2000.  Brillion  was also  notified by the
Robins Group (which sold  Brillion to TCI) that it will not honor any claims for
indemnification.  On May 25, 1994, TCI and Brillion filed suit against  Beatrice
and the Robins  Group for  recovery  of costs  expended  at sites other than the
Lemberger  Landfill and for  declaratory  and injunctive  relief with respect to
various environmental matters pursuant to the indemnification  provisions of the
respective  stock  purchase  agreements  and other  causes of ACTION,  INCLUDING
CERCLA  (TRUCK  COMPONENTS  INC., ET AL. V.  BEATRICE  COMPANY ET AL.,  Northern
District of Illinois).  On June 10, 1994, TCI and Brillion filed a first amended
complaint in this  lawsuit to add  Hunt-Wesson,  Inc., a corporate  successor of
Beatrice that may be a successor to Beatrice's  liabilities in these matters. In
1996,  the  district  court  entered  judgment  against  Brillion,  holding that
Beatrice and the Robins Group did not owe any indemnity for Brillion's  expenses
at the sites  (excepting  the Lemberger  Landfill from this  holding),  and that
Brillion owed Karl F. Gabler $0.2 million pursuant to a 1987 indemnity contract.
On May 7, 1998,  the United  States  Court of Appeals  for the  Seventh  Circuit
affirmed  the 1996  judgment of the  district  court and,  in June 1998,  denied
Brillion's  petition for rehearing  and issued its final mandate of  affirmance.
TCI and Brillion have satisfied the counterclaim judgment of $0.2 million.

        POTENTIAL  COSTS. As of December 31, 1999,  based on all the information
currently available,  the Company had an environmental  reserve in the amount of
$10.4  million for  estimated  future costs  related to potential  environmental
investigation  and  remediation  liabilities  with respect to certain  currently
known matters.  The  environmental  reserve is principally  related to potential
remediation  liability at various off-site locations and, to a lesser degree, to
potential remediation liability at Gunite's, Rockford, Illinois, and Brillion's,
Brillion,  Wisconsin manufacturing facilities.  This reserve is based on current
cost estimates and does not reduce estimated  expenditures to net present value.
Further, the estimated reserve takes into consideration the number of other PRPs
at each site,  the  alleged  volume of waste  contributed  by other PRPs at each
site,  and the identity and  financial  position of such parties in light of the
joint and several  nature of the  liability,  but it does not take into  account
possible insurance  coverage or other similar  indemnification or reimbursement.
Based upon all currently available information,  no reserve has been established
with  respect to potential  environmental  obligations  at any of the  Company's
non-foundry subsidiaries.  Because many of the matters described above, however,
are at the early  stages  in their  respective  investigations,  there can be no
assurance that the amounts  ultimately  expended to address all of these matters
or to address other matters not yet known to be in existence will not exceed the
amounts allocated in the environmental reserve. Accordingly, it may be necessary
to establish additional reserves for environmental liabilities in the future.

        Any cash expenditures  required by the Company to comply with applicable
environmental laws and/or to pay for any remediation efforts will not be reduced
or otherwise affected by the existence of the environmental reserve.  Management
believes,  based on its  evaluation  of the  various  matters  described  above,
including its  experience  with such matters to date, the time period over which
it believes costs for such matters are likely to be incurred by the Company, and
the existence of the various  indemnifications  described above,  that any costs
the Company ultimately will incur for

                                       14


<PAGE>



such matters are not reasonably  likely to have a material adverse effect on the
Company's business or financial results.  However, given the early stage of many
of the matters,  there can be no assurance that one or more of these matters (or
matters which have not yet been  identified)  will not have such an effect.  The
Company currently  anticipates  spending  approximately $0.7 million per year in
2000 through 2004 for monitoring the various environmental sites associated with
the  environmental  reserve,  including  attorney and  consultant  costs for and
negotiations   with   regulators   and  other  PRPs,  and  payment  of  remedial
investigation costs. The Company expects to fund such expenditures with the cash
flow generated from its  operations  and amounts  available  under its revolving
credit facility.  These sites are generally in the early investigatory stages of
the  remediation  process  and  thus it is  anticipated  that  significant  cash
payments for remediation will not be incurred for at least several years.  After
the evaluation and investigation period, the investigation and remediation costs
will likely increase because the actual remediation of the various environmental
sites  associated  with the  environmental  reserve will likely be under way. In
addition, it is possible that the timing of any necessary  expenditures could be
accelerated.

EXECUTIVE OFFICERS OF THE REGISTRANT

        Set forth below is certain information concerning the executive officers
of the Company:

           NAME       AGE    POSITION

Thomas M. Begel        57    Chairman of the Board and Chief Executive Officer
                             of the Company

Andrew M. Weller       53    President, Chief Operating Officer and Director of
                             the Company

James D. Cirar         53    President and Chief Executive Officer of Gunite

Fred D. Culbreath      61    Chairman of Imperial

Joseph A. Hicks        52    Chief Executive Officer of Imperial

Robert L. Jackson      53    President and Chief Executive Officer of Bostrom

Timothy A. Masek       35    Executive Vice President-Sales and Marketing of the
                             Company

John D. McClain        55    President of Brillion

Donald C. Mueller      36    Vice President, Treasurer and Chief Financial
                             Officer of the Company

Allen L. Sunderland    48    President of Fabco

Kenneth M. Tallering   38    Vice President, General Counsel and Secretary of
                             the Company

John C. Wilkinson      43    President and Chief Operating Officer of Imperial

Brent Williams         45    Controller of the Company

        THOMAS M. BEGEL,  Chairman of the Board and Chief  Executive  Officer of
the Company,  served as President from October 1991 through January 2000 and has
served as Chairman of the Board and Chief  Executive  Officer since May 1993. He
is also  Chairman of, and a partner in, TMB  Industries  ("TMB"),  an investment
firm which is a partnership between himself and Mr. Weller, and is a director or
officer of certain TMB  companies.  Mr. Begel has served as a director of Silgan
Holdings Inc., a packaging company, since March 1997.

        ANDREW M. WELLER,  has served as President and Chief  Operating  Officer
since  January  2000 and as a Director  of the  Company  since  September  1994.
Formerly, he served as Executive Vice President and Chief Financial Officer

                                       15


<PAGE>



of the Company from  September  1994 to January 2000 and as Secretary from March
1995 to November 1995.  From April 1988 to September 1994, he was Vice President
and  Treasurer of Bethlehem  Steel  Corporation  and prior  thereto held various
other  positions with  Bethlehem.  He has also been Executive Vice President of,
and a partner  in TMB since  September  1994,  and is a  director  or officer of
certain TMB companies.

        JAMES D. CIRAR,  has been the President and Chief  Executive  Officer of
Gunite  Corporation  since January  2000.  Formerly he was Chairman of Johnstown
America  Corporation and Freight Car Services,  Inc. from September 1998 to June
1999 and Senior Vice President of the Company from July 1997 to June 1999.  From
September 1995 to August 1998, he was President and Chief  Executive  Officer of
Johnstown  America  Corporation  and  from  March  1998  to  August  1998 he was
President and Chief  Executive  Officer of Freight Car Services,  Inc.  Prior to
September  1995,  Mr. Cirar was the Plant  Manager of the Truck and Bus Assembly
Group of General Motors Corporation in Flint, Michigan.

        FRED D. CULBREATH, has been Chairman of Imperial for the past five years
and has held various other titles with  Imperial  since being one of the primary
founders of Imperial in 1962.

        JOSEPH A. HICKS,  has been Chief  Executive  Officer of  Imperial  since
January 1995 and served as  President of Imperial  from January 1995 to November
1997.  Prior to January 1995, he was  President of Eagle  Associates,  a private
management firm.

        ROBERT L. JACKSON,  has been  President and Chief  Executive  Officer of
Bostrom since  January  2000.  From August 1996 to January 2000 he was Executive
Vice  President of Bostrom.  Prior to that he held various  financial  positions
with Bethlehem Steel Corporation.

        TIMOTHY A.  MASEK,  has served as  Executive  Vice  President-Sales  and
Marketing  of the  Company  since  January  2000  and  formerly  served  as Vice
President - Corporate  Development  of the Company from December 1995 to January
2000 and  President of Bostrom from June 1996 to January  2000.  From  September
1992 to December 1995, Mr. Masek performed  marketing and corporate  development
functions  for the  Company.  Prior to  September  1992,  Mr. Masek was a Market
Analyst for the  Transportation  Equipment  Group of Bombardier  Corporation,  a
railcar and aviation manufacturer.

        JOHN D. MCCLAIN, joined Brillion as Manager of Manufacturing in 1988 and
was appointed Vice President of  Manufacturing in 1989. Mr. McClain was promoted
to his present  position of President in 1994.  Prior to joining  Brillion,  Mr.
Mclain held  metallurgical  and foundry manager  positions at  Owen-Illinois,  a
manufacturer of glass containers and television picture tubes, Emerson Electric,
a diverse  manufacturing company producing power transmission and electric motor
components, pumps, valves and hand tools, and Clow Valve Company, a manufacturer
of waste and water  system  valves,  fire  hydrants and fire  protection  system
valves.

        DONALD C. MUELLER, has served as Vice President and Treasurer since July
1998 and as Chief Financial Officer since January 2000. For the five years prior
to July  1998,  he held  various  financial  positions  with  Fisher  Scientific
International.

        AL  SUNDERLAND,  joined  Fabco in 1995 as Vice  President  of Sales  and
Engineering and was appointed President in December 1999. Prior to joining Fabco
Mr. Sunderland  served as Vice President of Engineering and Product  Development
for Monroe Truck Equipment,  General Manager of a Fontaine  Modification Center,
and managed a product development group at Mack Trucks.

        KENNETH M. TALLERING, has served as Vice President,  General Counsel and
Secretary of the Company since  November  1995.  From  September 1987 to October
1995, Mr. Tallering was an attorney with the law firm of Skadden.  Arps,  Slate,
Meagher & Flom.

        JOHN C. WILKINSON,  has served as President and Chief Operating  Officer
of  Imperial  since  November  1997.  Prior to that he was  General  Manager  of
Imperial.

        BRENT  WILLIAMS,  has served as Controller of the Company and has served
in various financial capacities at TCI and Gunite for the past five years. Prior
to that, he was Corporate Controller of Caron International.

                                       16


<PAGE>



                            GLOSSARY OF CERTAIN TERMS

        The  following  industry  terms have the  meanings  set forth  below for
purposes of the Form 10-K:

ABS:                        Anti-lock brake system.

Automatic                   Slack  Adjuster:  A  Mechanism  that  reacts to, and
                            adjusts  for,   variations  in  brake   shoe-to-drum
                            clearance,  maintains  the  proper  amount  of space
                            between the shoe and drum and thereby eliminates the
                            need for manual adjustment.

Brake Drum:                 A metal  cylinder to which  pressure is applied by a
                            braking mechanism in order to arrest rotation of the
                            wheel to which the cylinder is attached.

Brake Rotor:                Device which works with a vehicle's  braking  system
                            to stop the vehicle.


OEM:                        Original equipment manufacturer.

Spoke Wheels:               Along with the wheel hub, it is the connecting piece
                            between the brake system and the axle upon which the
                            rim and tire are mounted.

Wheel Hubs:                 Along  with the spoke  wheel,  it is the  connecting
                            piece  between  the brake  system  and the axle upon
                            which the rim and tire are mounted.




                                       17


<PAGE>



ITEM 2.  FACILITIES

        The  Company's  headquarters  are located in leased  offices in Chicago,
Illinois.  The following  table provides a summary  description of the Company's
other principal facilities.

<TABLE>
<S>                     <C>                              <C>                        <C>
                                                                                     COVERED SPACE
       FACILITIES             BUSINESS FUNCTION          OWNED/LEASED                      SQ. FT.
       ----------             -----------------          ------------                      -------
Gunite

   Rockford, Illinois    Administrative Offices:             Owned                         619,000
                         Specialty Foundry,
                         Aftermarket Distribution
                         Warehouse
   Elkhart, Indiana      Machining-Wheel End                 Owned                         258,000
   (Plant 1)             Components
   Elkhart, Indiana      Machining and Assembling-          Leased                         115,000
   (Plant 2)             Automatic Slack Adjusters
   Erie, Pennsylvania    Foundry; machining                  Owned                         366,000

Brillion (1)
   Plant I               Melting; Molding;                  Leased                         180,000
                         Administrative Offices
   Plant II              Melting; Molding                   Leased                         165,000
   Plant III             Farm Machinery                      Owned                         150,000
   Plant IV              Finishing; Shipping                Leased                          85,000
   New property          Storage                             Owned                          85,000

(1) All Brillion facilities are located in Brillion, Wisconsin

Imperial

   Portland, Tennessee   Administrative Offices             Leased                          10,000
   New Deal, Tennessee   Fabricating                        Leased                         134,000
   (Plant 1)
   New Deal, Tennessee   Fabricating                        Leased                          39,000
   (Plant 2)
   Portland, Tennessee   Chrome Plating                      Owned                          90,000
   Decatur, Texas        Fabricating                         Owned                         124,000
   Ft. Worth, Texas      Fabricating                         Owned                          40,000
   Gainesville, Texas    Chrome Plating                     Leased                          37,000
   (Buildings 1-5)
   Dublin, Virginia      Fabricating, sequencing             Owned                         112,500
   Chehalis, Washington  Fabricating                         Owned                          90,000
   Chehalis, Washington  Fabricating                        Leased                          12,000

Bostrom

   Piedmont, Alabama     Manufacturing; Administrative      Leased                         231,000
                         Offices

Fabco

   Oakland, California   Manufacturing; Warehouse;           Owned                          65,000
                         Administrative Offices

</TABLE>

   The Company  believes that its facilities and equipment are in good condition
and, together with scheduled capital improvements,  are adequate for its present
and immediately projected needs.

                                       18


<PAGE>



ITEM 3. LEGAL PROCEEDINGS

        The  Company  is  involved  in  certain  threatened  and  pending  legal
proceedings,  including worker's compensation claims, arising out of the conduct
of its businesses.  In the opinion of management,  the ultimate  outcome of such
legal  proceedings  will not have a  material  adverse  effect on the  financial
position or results of operations of the Company.

        The Company may be subject to  liability  as a result of the disposal of
hazardous  substances  on and  off  the  properties  owned  or  operated  by its
subsidiaries,  including Brillion, Gunite and Fabco. TCI and Brillion filed suit
on May 25, 1994  against  Beatrice  and the Robins  Group for certain  causes of
action,   including   indemnification  under  purchase  agreements.   TCI  added
Hunt-Wesson,  Inc., a corporate successor to Beatrice that may be a successor to
Beatrice's liability in these matters, as a defendant on June 10, 1994. In 1996,
the district court entered judgment against Brillion,  holding that Beatrice and
the Robins Group did not owe any indemnity for Brillion's expenses at the sites,
and that Brillion owed Karl F. Gabler $0.2 million  pursuant to a 1987 indemnity
contract.  On May 7, 1998,  the United  States  Court of Appeals for the Seventh
Circuit  affirmed the 1996  judgment of the district  court,  and, in June 1998,
denied  Brillion's  petition  for  rehearing  and  issued  its final  mandate of
affirmance.  TCI and Brillion have satisfied the  counterclaim  judgment of $0.2
million. In December 1997, TCI and Brillion filed suit against Beatrice, and its
parent, ConAgra, Inc., for recovery of costs expended at the Lemberger Landfill,
and for declaratory relief with respect to the CLEANUP OF THE LEMBERGER LANDFILL
AND ADJACENT AREAS. IN THIS SUIT (BRILLION,  ET AL. V. CONAGRA, ET AL., Case No.
97-L-  15968),  the court has  denied  Brillion's  motion  for  judgment  on the
pleadings and has granted  defendants' motion to dismiss.  TCI and Brillion have
appealed this adverse ruling to the First District  Appellate Court in Illinois.
A decision by this state  appellate court is expected in late 2000. In September
1997,  TCI and Gunite  entered  into the  Settlement  which  settled its pending
litigation  against a prior owner of Gunite and pursuant to which TCI and Gunite
and the prior owner withdrew their claims against the other.  As a result of the
Settlement,  TCI and  Gunite  will not be  responsible  (through  a  contractual
undertaking by the former owner) for certain environmental liabilities and costs
resulting from Gunite's waste  disposals  prior to the  acquisition of Gunite by
TCI in  September  1987,  including  at the  IPC,  M.I.G./Dewane  and  Southeast
Rockford sites. See "Environmental Matters" in Item 1.

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

                                            None.



                                       19


<PAGE>



                                           PART II

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

        Price range of Common Stock

        The Company's  common stock is listed and traded on the NASDAQ  National
Market System under the symbol "TTII"  (formerly  "JAII").  The following  table
sets forth the high and low sales  prices of the common stock as reported by the
NASDAQ National Market System.

                       Sales Prices

1998
----

First Quarter         $17.75      $9.13
Second Quarter         19.15      12.75
Third Quarter          19.94      10.25
Fourth Quarter         16.75      10.00

1999
----

First Quarter         $17.50     $12.75
Second Quarter         19.25      12.50
Third Quarter          19.75      12.63
Fourth Quarter         18.94      12.75


        The number of record  holders of the  Company's  common stock on January
28, 2000 was 106.

        DIVIDEND POLICY

        The Company has never paid any dividends on its common stock and expects
for the foreseeable future to retain all of its earnings from operations for use
in expanding and developing its business.  Any future decision as to the payment
of dividends will be at the  discretion of the Company's  Board of Directors and
will  depend  upon  the  company's   earnings,   financial   position,   capital
requirements and such other factors as the Board of Directors deems relevant. In
addition,  the  Company's  senior bank credit  facility and senior  subordinated
notes  contains  covenants  limiting  dividends  that may be paid to  holders of
shares of common stock.

ITEM 6. SELECTED FINANCIAL DATA

        The following  table sets forth selected  financial data with respect to
the Company for the periods and at the dates indicated.  All selected  financial
data is  derived  from the  audited  consolidated  financial  statements  of the
Company  and  should be read in  conjunction  with  those  statements  which are
incorporated by reference in this report.

                                       20


<PAGE>


<TABLE>

                                    SELECTED FINANCIAL DATA

                                      YEAR ENDED DECEMBER 31,

                              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

----------------------------------------------------------------------------------------------------
<S>                                       <C>         <C>         <C>          <C>         <C>
                                          1995 (1)         1996        1997         1998     1999(2)
                                       ----------- ------------ ----------- ------------ -----------
INCOME STATEMENT  DATA:

TOTAL REVENUES                            $175,583     $361,825    $415,866     $433,563    $541,543
COST OF GOODS                              143,773      288,756     329,678      343,852     429,711
                                       -----------  ----------- ----------- ------------ -----------
   Gross profit                             31,810       73,069      86,188       89,711     111,832

Selling, general & administrative           16,918       33,857      35,719       38,434      47,104
Amortization expense                         2,904        6,970       6,798        6,773       7,792
Pension termination gain                        --           --          --       (1,688)         --
Reduction of Environmental Reserves             --           --     (14,300)          --          --
                                       -----------  ----------- ----------- ------------ -----------
   Operating income                         11,988       32,242      57,971       46,192      56,936
Interest expense, net                       11,285       31,503      29,547       27,146      25,251
Provision  for
   income taxes                                900        2,116      12,881       10,853      14,449
                                       -----------  ----------- ----------- ------------ -----------
   Income (loss) before extraordinary
   items and discontinued operations          (197)      (1,377)     15,543        8,193      17,236
Extraordinary items, net of income taxes        --           --      (2,008)      (1,146)     (2,505)
Discontinued Operations:
   Gain on sale, net of income taxes            --           --          --           --      29,817
   Income (loss), net of income taxes        5,782       (3,994)     (6,069)      30,808      22,728
                                       -----------  ----------- ----------- ------------ -----------
Net income (loss)                        $   5,585     $ (5,371)   $  7,466     $ 37,855   $  67,276
                                       ===========  =========== =========== ============ ===========
Diluted Earnings Per Share:
Income (loss) from continuing operations
   before extraordinary items            $   (0.02)    $  (0.14)   $   1.58     $   0.81   $   1.67
Income (loss) from discontinued operations    0.59        (0.41)       5.07         3.04      (0.62)
EXTRAORDINARY ITEM                              --           --       (0.20)       (0.11)     (0.24)
                                       -----------  ----------- ----------- ------------ -----------
Net income (loss) per share                  $0.57      ($0.55)       $0.76        $3.74      $6.50
-------------------------------------- -----------  ----------- ----------- ------------ -----------
                                                            AS OF DECEMBER 31,

         BALANCE SHEET DATA:                                  (in thousands)
-------------------------------------- -------------------------------------------------------------
                                              1995         1996        1997         1998        1999
                                       -----------  -----------  ---------- ------------ -----------

Total assets                              $489,691     $479,355    $487,101     $493,003    $535,381
Long-term debt, including
   current maturities                      302,105      285,293     277,814      240,563     204,366
Total shareholders' equity                  68,874       63,537      71,020      110,717     182,675
-------------------------------------- -----------  ----------- ----------- ------------ -----------
(1)  Acquired  Bostrom in January,  1995 and TCI in August,  1995. See Note 1 to
     the consolidated  Financial Statements of the Company and the notes thereto
     for the year ended December 31, 1999.

(2)  Acquired  Imperial in April 1999,  EMI in May 1999,  Clark  Engineering  in
     September  1999 and BMC of Virginia in October  1999,  and sold freight car
     operations in June 1999.  See Notes 1 and 2 to the  Consolidated  Financial
     Statements of the Company and the notes thereto for the year ended December
     31, 1999.


</TABLE>


                                       21


<PAGE>



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

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

        The Company  conducts its continuing  operations in the truck components
segment  of  the  transportation  industry  and  is a  leading  manufacturer  of
wheel-end components,  body and chassis components,  seating systems,  steerable
drive axles and gearboxes for the heavy-duty  truck and bus industries and other
castings for the heavy-duty truck industry and various industrial  markets.  The
Company's discontinued operations were in the freight car segment and included a
leading manufacturer and lessor of new and rebuilt freight cars used for hauling
coal, intermodal  containers,  highway trailers,  automobiles,  agricultural and
mining products.

        On April 29, 1999,  the Company  acquired the assets of Imperial  Group,
Inc.  (Imperial).  Imperial is a leading Tier I and Tier II supplier of body and
chassis   components  for  heavy-duty  truck   manufacturers   and  transit  bus
manufacturers.  The purchase price for Imperial was approximately  $61.6 million
consisting of $58.8 million in cash and 156,740  shares of the Company's  common
stock.   The  acquisition  was  accounted  for  under  the  purchase  method  of
accounting. The purchase price is also subject to a contingent earn out of up to
$4.0  million,  based on the results of Imperial's  Washington  plant for the 24
months ending April 2001.  The Company also incurred  transaction  costs of $0.7
million and issued 36,500 shares of restricted  stock to two Imperial  employees
valued at $0.6  million,  which  vest  ratably  over three  years if  employment
continues.

        In conjunction with the acquisition of Imperial,  the Company,  on April
29,1999  entered  into a new Senior Bank Credit  Facility.  The new  facility is
comprised of a $50 million Term A Loan, a $50 million Term B Loan and an undrawn
$75  million  Revolving  Credit  Facility.  Proceeds  were used to  finance  the
Imperial acquisition, to refinance the Company's outstanding senior bank debt of
$36.6 million  (resulting in an extraordinary  non-cash after tax charge of $1.7
million),  and for working  capital and other general  corporate  purposes.  The
Company  incurred  and  deferred  $2.2  million  of costs in  obtaining  the new
financing which will be deferred and amortized over the term of the related debt
(5-6 years).

        On May 17, 1999, the Company's Gunite subsidiary acquired certain assets
and  liabilities  of EMI Company  (EMI),  an iron foundry and machining  company
located  in Erie,  Pennsylvania.  The  Company  paid  $16.5  million in cash for
property,  plant  and  equipment  and $2.2  million  for  working  capital.  The
acquisition was accounted for under the purchase method of accounting.

        On June 3, 1999,  the  Company  completed  the sale of its  freight  car
operations  comprised of three wholly owned  subsidiaries  - JAC,  FCS, and JAIX
Leasing  to Rabbit  Hill  Holdings,  Inc.  (the  Buyer).  The  Company  received
consideration  consisting of  approximately  $101.3 million in cash,  contingent
additional  consideration  of $20.0 million and a 20 percent equity  interest in
the Buyer. In addition,  the Buyer assumed  substantially all of the liabilities
of the freight car  operations,  including $14.4 million of debt. The 20 percent
equity interest in the Buyer is comprised of common and preferred stock, some of
which is non-voting.  Further,  the Company's  rights with respect to voting and
transferability  of its equity  interest  are limited  and, in  particular,  the
Company  granted a proxy to vote its equity  interest to another  shareholder of
Buyer under certain  circumstances.  As a result,  the Company  accounts for its
investment in Buyer using the cost method. The sale resulted in a pretax gain of
$46.8 million after  consideration  of  transaction  costs of $4.2 million and a
related  pension  curtailment  loss of $0.3 million.  The after-tax  gain on the
disposition  of the freight car  business of $29.8  million was  recorded in the
Company's results for the second quarter of 1999.  Approximately $2.5 million of
additional  gain was deferred due to the  Company's  continuing  interest in the
freight car  business.  Proceeds from the $20.0  million  contingent  additional
consideration  will be  recorded  as a gain,  if and when  collected.  Also as a
result of the sale,  approximately  $80.0  million of senior  bank debt was paid
subsequent to the disposition  which resulted in the after-tax write off of $2.2
million of unamortized deferred financing costs.

        On September 30, 1999 and October 21, 1999, the Company's Imperial Group
subsidiary acquired certain assets and liabilities of Clark and BMC-VA to expand
its manufacturing capabilities, product offering, and customer base. The Company
used cash on hand of $19.5 million to fund the  acquisitions.  The  acquisitions
were accounted for under the purchase method of accounting.

                                       22


<PAGE>



        The  Company's  sales  are  affected  to a  significant  degree  by  the
heavy-duty  truck market  which is subject to  significant  fluctuations  due to
economic  conditions,  changes in the alternative  methods of transportation and
other factors.  There can be no assurance that  fluctuations in such market will
not have a material  adverse  effect on the results of  operations  or financial
condition of the Company.

RESULTS OF OPERATIONS YEARS ENDED DECEMBER 31, 1999 AND 1998

NET SALES

        Net sales in 1999  increased  by 24.9% to  $541.5  million  from  $433.6
million  in 1998.  The  increase  in net sales  was  primarily  from  businesses
acquired in 1999, and a 24.0% increase in revenues at Bostrom,  partially offset
by a 6.0% reduction in revenues at Brillion.

COST OF SALES AND GROSS PROFIT

        Cost of sales as a  percentage  of net  sales was 79.3% in both 1999 and
1998. Related gross profit margin was 20.7% in both years.

SELLING, GENERAL, ADMINISTRATIVE AND AMORTIZATION EXPENSES

        The  increase  of $8.7  million in selling,  general and  administrative
expenses  resulted  primarily from businesses  acquired.  As a percentage of net
revenue,  selling,  general  and  administrative  were 8.7% and 8.9% in 1999 and
1998,  respectively.  Amortization  expense increased by $1.0 million due to the
amortization of excess cost over net assets acquired of acquisitions made during
1999. Amortization expense in 1999 as a percentage of sales was 1.4% compared to
1.6% in 1998.

OPERATING INCOME

        Operating income was $56.9 million in 1999, compared to $46.2 million in
1998, an increase of $10.7 million. The increase was achieved by increased gross
profit of $22.1 million, offset by increased selling, general and administrative
expenses of $8.7 million, increased amortization expense of $1.0 million and the
pension termination gain of $1.7 million during the 1998 year.

OTHER

        Interest  expense was $26.6 million in 1999 compared to $28.7 million in
1998. Interest expense in 1999 was lower than 1998 due to lower debt levels as a
result of the debt paid down with the proceeds  from the sale of the freight car
business.  Interest income in 1999 was $1.4 million  compared to $1.6 million in
1998.

        In  conjunction  with the  prepayments  of $136.5 million of senior bank
debt in 1999, the Company recorded  extraordinary charges of $2.5 million net of
income tax, related to the write-off of unamortized deferred financing costs. In
conjunction  with the $35.0  million of senior  debt  prepayments  in 1998,  the
Company  recorded  extraordinary  charges  of $1.1  million  net of income  tax,
related to the write-off of unamortized deferred financing costs.

        Income  from  discontinued  freight  car  operations  decreased  by $8.1
million  from $30.8  million in 1998 to $22.7  million in 1999.  The decrease is
primarily  attributable to the partial year period in 1999, offset by the impact
of the  relative  strength  of the  freight car market in 1999 versus 1998 which
resulted in a substantial increase in the sales run rate. The Company recognized
a gain,  net of income  taxes,  of $29.8  million on the sale of the freight car
businesses.

        Net income, income from continuing operations before extraordinary items
and diluted  earnings  per share for 1999 were $67.3  million,  $1.67 and $6.50,
respectively,  compared to net income,  income from continuing operations before
extraordinary  items and diluted earnings per share of $37.9 million,  $0.81 and
$3.74, respectively, for 1998.

RESULTS OF OPERATIONS YEARS ENDED DECEMBER 31, 1998 AND 1997

NET SALES

        Net sales in 1998  increased  4.3% to $433.6 million from $415.9 million
in 1997 due to stronger product demand in the Class 8 truck market.

COST OF SALES AND GROSS PROFIT

        Cost of sales as a  percentage  of net  sales was 79.3% in both 1998 and
1997. Related gross profit margin was 20.7% in both years.

                                       23


<PAGE>




SELLING, GENERAL, ADMINISTRATIVE AND AMORTIZATION EXPENSES

        Selling,  general and  administrative  expenses as a  percentage  of net
sales were 8.9% and 8.6% in 1998 and 1997,  respectively.  Amortization  expense
was $6.8 million in both 1998 and 1997.

OPERATING INCOME

        Operating income was $46.2 million in 1998, compared to $58.0 million in
1997, a decrease of $11.8  million.  The  decrease  was  primarily a result of a
$14.3  million  reduction in  environmental  reserves in 1997,  higher  selling,
general and  administrative  expenses of $2.7 million in 1998,  increased  gross
profit  of $3.5  million  during  1998 and a  pension  termination  gain of $1.7
million also in 1998.

OTHER

        Interest  expense was $28.7 million in 1998 compared to $30.0 million in
1997.  Interest  expense  in 1998  was  lower  than  1997 due  primarily  to the
prepayment of $35.0 million of Tranche B term debt.  Interest income in 1998 was
$1.6 million in 1998 compared to $0.4 million in 1997.  The increase in interest
income was due to increased levels of cash.

        In  conjunction  with the $35.0  million of senior debt  prepayments  in
1998, the Company recorded  extraordinary  charges of $1.1 million net of income
tax, related to the write-off of unamortized deferred financing costs.

        In  conjunction  with the 1997  issuance  of $80.0  million  of Notes to
refinance  $80.0  million  of  Tranche A term  debt,  the  Company  recorded  an
extraordinary  charge of $2.0 million after income tax, primarily related to the
write-off of $3.4 million of unamortized deferred financing costs.

        Income  from  discontinued  freight car  operations,  net of income tax,
increased by $36.9  million  from a loss of ($6.1)  million in 1997 to income of
$30.8  million in 1998,  primarily  due to the increase in demand in the freight
car market.

        Net income, income from continuing operations before extraordinary items
and diluted  earnings  per share for 1998 were $37.9  million,  $0.81 and $3.74,
respectively,  compared to net income,  income from continuing operations before
extraordinary  items and diluted  earnings per share of $7.5 million,  $1.58 and
$0.76, respectively, for 1997.

LIQUIDITY AND CAPITAL RESOURCES

        For the year ended  December 31, 1999,  the Company  provided  cash from
operations of $35.6 million  compared with $32.6 million for 1998.  The increase
is  primarily  due to increased  earnings in 1999 after  non-cash  impacts.  The
Company used $12.6  million of net cash from  investing  activities  during 1999
consisting  primarily of $101.3 million of proceeds from the sale of the freight
car businesses offset by $97.2 million used to acquire Imperial,  EMI, Clark and
BMC  and  $16.4  million  for  capital  expenditures.  Cash  used  by  financing
activities  was $36.3 for 1999,  mainly  representing  new  borrowings of $103.1
million offset by debt repayments of $138.9 million.

        As  of  December  31,  1999  there  was  $19.2  million  of  term  loans
outstanding   under  the  Senior  Credit  Facility,   $180.7  million  of  notes
outstanding,  and no borrowings  under the $75.0 million  revolving  credit line
under the Senior Credit Facility.  Availability under the revolving credit line,
after consideration of outstanding letters of credit of $7.5 million,  was $67.5
million.

        Interest  payments  on the  Notes  and  under  the new  bank  facilities
represent  significant  near-term cash  requirements for the Company.  The Notes
require semiannual interest payments of approximately $10.6 million.  Borrowings
under the bank facilities  bear interest at floating rates and require  interest
payments on varying dates  depending  upon the interest rate option  selected by
the Company.

        The Company  believes that the cash flow  generated  from its continuing
operations,  together with amounts  available  under its revolving  credit line,
should be  sufficient  to fund its debt service  requirements,  working  capital
needs,  anticipated capital expenditures and other operating expenses (including
expenditures  required by applicable  environmental  laws and regulations).  The
Company's future  operating  performance and ability to service or refinance the
Notes and to extend or  refinance  the new bank  facilities  will be  subject to
future economic conditions and to financial, business and other factors, many of
which are beyond the Company's control.

        As of December 31, 1999, the Company had cash of $8.8 million.

                                       24


<PAGE>



YEAR 2000

        The Year 2000 issue is the result of date-sensitive devices, systems and
computer programs that were deployed using two digits rather than four to define
the applicable year. Any such technology may recognize a year containing "00" as
the year 1900  rather than the year 2000.  This issue  could have  resulted in a
system failure or miscalculations  causing disruptions of operations  including,
among other things, a temporary  inability to process  transactions or engage in
similar normal business activities.

        In 1996, the Company  initiated a  comprehensive  program to ensure that
its various business systems continue to function  properly in the year 2000. By
the end of 1998, all critical business systems at each operating unit then owned
had been reviewed, modified if necessary, and tested.

        In connection  with the Company's  acquisitions  in 1999,  comprehensive
programs were initiated to ensure year 2000  compliance.  By September 30, 1999,
all critical business systems had been reviewed, modified and tested.

        Additionally,  the Company  assessed  readiness for the year 2000 of key
suppliers  and  other  third  parties  with  whom  it has  significant  business
relationships. No negative or materially significant impact was experienced from
any supplier due to Year 2000 related problems.

        Appropriate   contingency   plans  were  developed  for  all  sites.  No
contingency  plans at any  site had to be  invoked  due to a Year  2000  related
problem.

        Beginning in 1996, as part of the Company's ongoing  information  system
improvement  process,  its  enterprise  systems were upgraded,  which  partially
mitigated the impact of the year 2000  problem.  Excluding the cost of upgrading
the enterprise systems, the pretax cost incurred to date of becoming "Year 2000"
compliant  has been  approximately  $0.6  million and is not expected to change.
Such costs have been funded through operating cash flows.

ENVIRONMENTAL MATTERS

        The Company is subject to comprehensive and frequently changing federal,
state and local  environmental  laws and regulations,  and will incur additional
capital and operating costs in the future to comply with currently existing laws
and  regulations,  new  regulatory  requirements  arising from recently  enacted
statutes and possible new  statutory  enactments.  In addition to  environmental
laws  that  regulate  the  Company's   subsidiaries'  ongoing  operations,   the
subsidiaries also are subject to environmental remediation liability.  Under the
federal  Comprehensive  Environmental  Response,  Compensation and Liability Act
(CERCLA) and analogous state laws, the Company's subsidiaries may be liable as a
result of the release or  threatened  release of hazardous  substances  into the
environment.  The  Company's  subsidiaries  are  currently  involved  in several
matters relating to the investigation  and/or remediation of locations where the
subsidiaries have arranged for the disposal of foundry and other wastes.

        Such matters  include  five  situations  in which the Company,  has been
named  or is  believed  to be  Potentially  Responsible  Parties  (PRPs)  in the
contamination  of the  sites.  Additionally,  environmental  remediation  may be
required at two of the truck  components  segment  facilities  at which soil and
groundwater contamination has been identified.

        The  Company   believes  that  it  has  valid  claims  for   contractual
indemnification  against  prior  owners  for  certain of the  investigatory  and
remedial costs at each of the above  mentioned  sites.  As a result of a private
party settlement of certain pending litigation with a prior owner of Gunite, TCI
and Gunite will not be  responsible  (through a contractual  undertaking  by the
former owner) for certain  liabilities  and costs  resulting from Gunite's waste
disposal prior to the  acquisition of Gunite by TCI in September 1987 at certain
of such  sites.  The  Company  has been  notified,  however,  by  certain  other
contractual   indemnitors   that  they  will  not  honor   future   claims   for
indemnification.  Accordingly,  the Company is litigating indemnification claims
and  there is no  assurance  that even if  successful  in any such  claims,  any
judgments  against the indemnitors will ultimately be recoverable.  In addition,
the Company believes it is likely that it has incurred some liability at various
sites for activities and disposal  following  acquisition which would not in any
event be covered by indemnification by prior owners.

        As of December 31, 1999,  the Company has a $10.4 million  environmental
reserve.  This  reserve is based on current cost  estimates  and does not reduce
estimated  expenditures to net present value. The Company currently  anticipates
spending approximately $0.7 million per year in 2000 through 2004 for monitoring
the various  environmental  sites  associated  with the  environmental  reserve,
including  attorney and consultant costs for strategic planning and negotiations
with  regulators  and other PRPs, and payment of remedial  investigation  costs.
These sites are

                                       25


<PAGE>



generally in the early investigatory  stages of the remediation process and thus
it is anticipated  that  significant  cash payments for remediation  will not be
incurred for at least several  years.  After the  evaluation  and  investigation
period, the investigation and remediation costs will likely increase because the
actual  remediation  of the  various  environmental  sites  associated  with the
environmental reserve will likely be underway. Any cash expenditures required by
the Company or its  subsidiaries  to comply with applicable  environmental  laws
and/or to pay for any  remediation  efforts  will not be  reduced  or  otherwise
affected by the existence of the environmental  reserve.  Due to the early stage
of  investigation  of many of the sites and potential  remediations  referred to
above, there are significant  uncertainties as to waste quantities involved, the
extent  and  timing of the  remediation  which  will be  required,  the range of
acceptable  solutions,  costs of remediation and the number of PRPs contributing
to such costs.  Based on all of the information  presently  available to it, the
Company  believes that the  environmental  reserve will be adequate to cover its
future costs related to the sites associated with the environmental reserve, and
that any  additional  costs  will  not have a  material  adverse  effect  on the
financial  condition  or results of  operations  of the  Company.  However,  the
discovery of additional sites, the modification of existing laws or regulations,
the imposition of joint and several  liability under CERCLA or the uncertainties
referred to above could result in such a material adverse effect.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

        The  Company's  market  risk  sensitive  instruments  do not subject the
Company  to  material  market  risk  exposures  except as such  risks  relate to
interest  rate  fluctuations.  As of  December  31,  1999,  the Company has debt
outstanding with a carrying value of $204.4 million. The estimated fair value of
this debt is $207.5 million. Fixed interest rate debt outstanding as of December
31, 1999,  represents  89% of total debt,  carries an average  interest  rate of
11.7% and matures as  follows:  $0.2  million in fiscal  2000,  $0.3  million in
fiscal  2001,  $0.2  million  in fiscal  2002,  and $181.4  million  thereafter.
Variable  interest rate debt  outstanding as of December 31, 1999 had an average
interest  rate at that date of 7.8% and  matures  as  follows:  $1.7  million in
fiscal  2000,  $1.9 million in fiscal  2001,  $2.1 million in fiscal 2002,  $2.5
million  in  fiscal  2003,  $3.5  million  in  fiscal  2004  and  $10.6  million
thereafter.

        The Company has an interest rate  protection  agreement to fix a portion
of its  variable  rate Senior Bank debt.  At December  31,  1999,  the  notional
principal  amount of this  contract  was $15  million  at a 6.14%  fixed rate of
interest plus the applicable  borrowing margins.  The contract matures in August
2000.

EFFECTS OF INFLATION

        General price  inflation has not had a material  impact on the Company's
results of operations.

FORWARD LOOKING STATEMENTS

        The foregoing outlook contains forward-looking statements that are based
on current  expectations and are subject to a number of risks and uncertainties.
Actual results could differ materially from current expectations due to a number
of factors,  including  general  economic  conditions;  competitive  factors and
pricing  pressures;  shifts  in  market  demand,  the  performance  and needs of
industries served by the Company's businesses; and the risks described from time
to time in the Company's Securities and Exchange Commission reports.

                                       26


<PAGE>

<TABLE>


ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

                               CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                       <C>             <C>             <C>
-------------------------------------------------------   -------------   -------------   -------------
YEARS ENDED DECEMBER 31,                                           1999            1998            1997
-------------------------------------------------------   -------------   -------------   -------------
Net sales                                                 $     541,543   $     433,563   $     415,866
Cost of sales                                                   429,711         343,852         329,678
-------------------------------------------------------   -------------   -------------   -------------
Gross profit                                                    111,832          89,711          86,188
Selling, general and administrative expense                      47,104          38,434          35,719
Amortization expense                                              7,792           6,773           6,798
Pension termination gain                                             --          (1,688)             --
Reduction of environmental reserves                                  --              --         (14,300)
-------------------------------------------------------   -------------   -------------   -------------
Operating income                                                 56,936          46,192          57,971
Interest income                                                  (1,359)         (1,558)           (439)
Interest expense                                                 26,610          28,704          29,986
-------------------------------------------------------   -------------   -------------   -------------
Income from continuing operations before income taxes,
  extraordinary items and discontinued operations                31,685          19,046          28,424
Provision for income taxes                                       14,449          10,853          12,881
-------------------------------------------------------   -------------   -------------   -------------
Income from continuing operations before
  extraordinary items and discontinued operations                17,236           8,193          15,543
Discontinued operations:
  Gain on sale, net of income taxes                              29,817              --              --
  Income (loss) from discontinued operations,
    net of income taxes                                          22,728          30,808          (6,069)
-------------------------------------------------------   -------------   -------------   -------------
Income before extraordinary items                                69,781          39,001           9,474
Extraordinary items, net of income taxes                         (2,505)         (1,146)         (2,008)
-------------------------------------------------------   -------------   -------------   -------------
Net income and comprehensive income                       $      67,276   $      37,855   $       7,466
-------------------------------------------------------   -------------   -------------   -------------
Basic earnings per share:
 Income from continuing operations before
   extraordinary items                                    $       1.71    $       0.83    $       1.59
 Income (loss) from discontinued operations                       5.22            3.13           (0.62)
 Extraordinary items                                             (0.24)          (0.11)          (0.21)
-------------------------------------------------------   -------------   -------------   -------------
 Net income per share                                     $       6.69    $       3.85    $       0.76
-------------------------------------------------------   -------------   -------------   -------------
 Basic weighted average shares outstanding                       10,063           9,838           9,761
-------------------------------------------------------   -------------   -------------   -------------
Diluted earnings per share:
 Income from continuing operations before
   extraordinary items                                    $       1.67    $       0.81    $       1.58
 Income (loss) from discontinued operations                       5.07            3.04           (0.62)
 Extraordinary items                                             (0.24)          (0.11)          (0.20)
-------------------------------------------------------   -------------   -------------   -------------
 Net income per share                                     $       6.50    $       3.74    $       0.76
-------------------------------------------------------   -------------   -------------   -------------
 Diluted weighted average equivalents and shares
   outstanding                                                  10,348          10,122           9,856
-------------------------------------------------------   -------------   -------------   -------------
</TABLE>









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

                                       27


<PAGE>

<TABLE>


                                  CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS EXCEPT PER SHARE DATA)
----------------------------------------------------------------------------------------------
AS OF DECEMBER 31,                                                            1999        1998
----------------------------------------------------------------------------------------------
ASSETS:

<S>                                                                   <C>           <C>
Cash and cash equivalents                                             $      8,799  $   33,382
Accounts receivable, net                                                    61,053      55,550
Inventories                                                                 44,930      29,566
Deferred income tax assets                                                  13,688      13,688
Prepaid expenses and other current assets                                    7,316       2,643
Net assets of discontinued operations                                           --      37,555
----------------------------------------------------------------------------------------------
Total current assets                                                       135,786     172,384
Property, plant and equipment, net                                         129,999      82,402
Deferred financing costs and other, net                                      5,644       8,809
Intangible assets, net                                                     263,952     229,408
----------------------------------------------------------------------------------------------
Total assets                                                          $    535,381 $   493,003
----------------------------------------------------------------------------------------------
LIABILITIES:

Accounts payable                                                      $     26,574 $    19,601
Accrued payroll and employee benefits                                       19,578      19,281
Other current liabilities                                                   33,883      32,381
Current maturities of long-term debt and capital lease                       1,936       9,039
----------------------------------------------------------------------------------------------
Total current liabilities                                                   81,971      80,302
Long-term debt and capital lease, less current maturities                   21,695      49,186
Senior subordinated notes                                                  180,735     182,338
Deferred income tax liabilities                                             34,677      34,571
Other long-term liabilities                                                 33,628      35,889
----------------------------------------------------------------------------------------------
Total liabilities                                                          352,706     382,286
----------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY:

Preferred stock, par $.01, 20,000 shares authorized, none outstanding           --          --
Common stock, par $.01, 201,000 shares authorized, 10,322 and 9,900
 issued and outstanding as of December 31, 1999 and 1998, respectively         103          99
Paid-in capital                                                             63,166      56,892
Retained earnings                                                          121,017      53,741
Unearned compensation                                                       (1,611)         --
Employee receivables for stock purchase                                         --         (15)
----------------------------------------------------------------------------------------------
Total shareholders' equity                                                 182,675     110,717
----------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity                            $    535,381  $  493,003
----------------------------------------------------------------------------------------------


</TABLE>












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

                                       28


<PAGE>


<TABLE>

                             CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

---------------------------------------------------   --------------   --------------   ---------------
YEARS ENDED DECEMBER 31,                                        1999             1998              1997
---------------------------------------------------   --------------   --------------   ---------------
OPERATING ACTIVITIES:
<S>                                                   <C>              <C>              <C>
Net income (loss)                                     $       67,276   $       37,855   $         7,466
(Income) loss from discontinued operations
 and gain on sale of discontinued operations,
 net of income taxes                                         (52,545)         (30,808)            6,069
---------------------------------------------------   --------------   --------------   ---------------
Income from continuing operations                             14,731            7,047            13,535
Adjustments to reconcile net income from
    continuing operations to net cash
    provided by operating activities:
Depreciation                                                  13,609           10,579            10,318
Amortization                                                   9,229            9,032             9,810
Deferred income tax expense (benefit)                           (753)           3,023             5,451
Pension termination gain                                          --           (1,688)               --
Reduction of environmental reserves                               --               --           (14,300)
Extraordinary items, net of income tax                         2,505            1,146             2,008
Change in continuing operations assets and liabilities:
     Accounts receivable                                      10,636             (828)           (9,128)
     Inventories                                              (5,300)           1,425            (2,046)
     Prepaid expenses and other current assets                (1,860)             507              (359)
     Accounts payable                                         (6,017)          (2,649)            2,664
     Accrued payroll and employee benefits                    (2,918)             558               408
     Other assets and liabilities                              1,737            4,451             9,257
---------------------------------------------------   --------------   --------------   ---------------
Cash provided by continuing operations                        35,599           32,603            27,618

INVESTING ACTIVITIES:
Capital expenditures                                         (16,447)          (8,941)           (6,636)
Change in restricted cash and other                             (319)             141                53
Cash paid for acquisitions                                   (97,187)              --                --
Proceeds from sale of the discontinued operations            101,348               --                --
---------------------------------------------------   --------------   --------------   ---------------
Cash used in investing activities                            (12,605)          (8,800)           (6,583)

FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt                     103,100               --            82,823
Payments of term loans and capital lease                    (137,694)         (36,899)          (90,170)
Retirement of subordinated debt                               (1,250)              --                --
Payments of deferred financing costs and other, net             (485)             521            (3,102)
---------------------------------------------------   --------------   --------------   ---------------
Cash used in financing activities                            (36,329)         (36,378)          (10,449)
---------------------------------------------------   --------------   --------------   ---------------
Net change in cash and cash equivalents from
   continuing operations                                     (13,335)         (12,575)           10,586
Net cash (provided to) received from discontinued
   operations                                                (11,248)          18,073            (1,007)
Cash and cash equivalents, beginning of year                  33,382           27,884            18,305
---------------------------------------------------   --------------   --------------   ---------------
Cash and cash equivalents, end of year                $        8,799   $       33,382   $        27,884
---------------------------------------------------   --------------   --------------   ---------------


</TABLE>




   The accompanying notes to consolidated financial statements are integral to
                               these statements.

                                       29


<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  ORGANIZATION

        Effective  June 14,  1999,  the name of the  Company  was  changed  from
Johnstown America Industries,  Inc. to Transportation  Technologies  Industries,
Inc., a Delaware corporation (the Company).

        The Company  has  historically  had two  operating  segments  within the
transportation  industry:  truck components, a leading manufacturer of wheel end
components, seating systems, steerable drive axles, gearboxes and other castings
for the heavy-duty truck industry;  and freight cars, a leading manufacturer and
lessor  of new and  rebuilt  freight  cars  used for  hauling  coal,  intermodal
containers, highway trailers, automobiles, agricultural and mining products.

        On October 28, 1991,  the Company  through its wholly  owned  subsidiary
Johnstown  America  Corporation,  (JAC),  consummated the purchase of the former
Freight Car Division of Bethlehem Steel Corporation . In 1994, the Company began
leasing  new and used  freight  cars  through  its JAIX  Leasing  Company  (JAIX
Leasing)  subsidiary.  The Company completed the acquisition of Truck Components
Inc. (TCI) and its subsidiaries (Gunite  Corporation,  Brillion Iron Works, Inc.
and Fabco Automotive  Corporation) on August 23, 1995, and Bostrom Seating, Inc.
(Bostrom) on January 13, 1995.  Operations  commenced on October 2, 1995, at the
Freight Car Services,  Inc. (FCS)  facility.  During 1999, the Company made four
additional truck component acquisitions (see Note 2).

        On June 3, 1999,  the  Company  completed  the sale of its  freight  car
operations  comprised of three wholly owned  subsidiaries  - JAC,  FCS, and JAIX
Leasing  to Rabbit  Hill  Holdings,  Inc.  (the  Buyer).  The  Company  received
consideration  consisting of  approximately  $101.3 million in cash,  contingent
additional  consideration of $20 million and a 20 percent equity interest in the
Buyer. In addition,  the Buyer assumed  substantially  all of the liabilities of
the freight car  operations,  including  $14.4  million of debt.  The 20 percent
equity interest in the Buyer is comprised of common and preferred stock, some of
which is non-voting.  Further,  the Company's  rights with respect to voting and
transferability  of its equity  interest  are limited  and, in  particular,  the
Company  granted a proxy to vote its equity  interest to another  shareholder of
Buyer under certain  circumstances.  As a result,  the Company  accounts for its
investment in Buyer using the cost method. The sale resulted in a pretax gain of
$46.8 million after  consideration  of  transaction  costs of $4.2 million and a
related  pension  curtailment  loss of $0.3 million.  The after-tax  gain on the
disposition  of the freight car  business of $29.8  million was  recorded in the
Company's results for the second quarter of 1999.  Approximately $2.5 million of
additional  gain was deferred due to the  Company's  continuing  interest in the
freight car  business.  Proceeds from the $20.0  million  contingent  additional
consideration  will be  recorded  as a gain,  if and when  collected.  Also as a
result of the sale,  approximately  $80.0  million of senior  bank debt was paid
subsequent  to  the  disposition  which  resulted  in a  non-cash  $2.2  million
extraordinary  charge,  net of income taxes,  from the write off of  unamortized
deferred financing costs.

        Revenues of the freight car business in 1999 (through June 3), 1998, and
1997 were $ 315.6 million,  $532.2 million,  and $234.3  million,  respectively.
Included within the income (loss) from discontinued  operations is an allocation
of consolidated  interest which is not  attributable to other  operations of the
Company. The interest included was $(0.2) million, $2.1 million and $3.3 million
in 1999, 1998 and 1997, respectively.

        The accompanying  consolidated  financial statements have been recast to
reflect the freight car business as a  discontinued  operation  for all periods.
For historical business segment reporting purposes, the Company's financial data
related to its freight car  business  was  previously  reported as the  segment,
"Freight Car." The Company's  continuing  operations comprise a single reporting
segment.

NOTE 2.  ACQUISITIONS

IMPERIAL GROUP ACQUISITION

        On April 29, 1999,  the Company  acquired the assets of Imperial  Group,
Inc.  (Imperial).  Imperial is a leading Tier I and Tier II supplier of body and
chassis   components  for  heavy-duty  truck   manufacturers   and  transit  bus
manufacturers.  The purchase price for Imperial was approximately  $61.6 million
consisting of $58.8 million in cash

                                       30


<PAGE>



and 156,740  shares of the Company's  common stock.  The purchase  price is also
subject to a contingent  earn-out of up to $4.0 million,  based on the operating
results of Imperial's  Washington plant for the 24 months ending April 2001. The
Company also incurred transaction costs of $0.7 million and issued 36,500 shares
of restricted stock to two Imperial employees valued at $0.6 million, which vest
ratably  over  three  years if  employment  continues.  The cash  portion of the
purchase price was funded by the new credit facility described in Note 6.

EMI COMPANY ACQUISITION

        On May 17, 1999, the Company's Gunite subsidiary acquired certain assets
and  liabilities  of EMI Company  (EMI),  an iron foundry and machining  company
located  in Erie,  Pennsylvania.  The  Company  paid  $16.5  million in cash for
property, plant and equipment and $2.2 million for working capital.

CLARK ENGINEERING & MANUFACTURING ACQUISITION

        On September 30, 1999, the Company's Imperial Group subsidiary  acquired
certain  assets and  liabilities  of Clark  Engineering  &  Manufacturing,  Inc.
(Clark),  a manufacturer of a broad range of metal parts and accessories for the
heavy-duty truck industry. The Company used cash on-hand of $8.7 million to fund
the acquisition.

BMC OF VIRGINIA, INC. ACQUISITION

        On October 21, 1999, the Company's  Imperial Group  subsidiary  acquired
certain assets and  liabilities  of BMC of Virginia,  Inc.  (BMC-VA),  a leading
supplier of components to Volvo,  whose North American  assembly  operations are
located  adjacent  to  BMC-VA  facilities.   BMC-VA  manufactures,   warehouses,
assembles and sequences components for Volvo and Freightliner.  The Company used
cash on hand of $11.0 million to fund the acquisition.

        The acquisitions were accounted for as purchases for financial reporting
purposes. Accordingly,  certain assets and liabilities of the acquired companies
were recorded at estimated fair values as of the acquisition  date,  adjusted as
of December  31,  1999,  based on  management's  best  judgement  and  available
information at the time. Future changes in these estimates, if any, will be made
within one year of the acquisition dates and are not expected to be material.

        The operating  results of the acquired  companies  have been included in
the Company's  reported results of operations from their respective  acquisition
dates.

        The Company's pro forma unaudited consolidated results of operations for
the years ended  December 31, 1999 and 1998 prepared as though the  acquisitions
and the related financing  transactions occurred on January 1, of the applicable
year are as follows:

(IN MILLIONS, EXCEPT PER SHARE DATA)
------------------------------------------------  -------------- ---------------
                                                            1999            1998
------------------------------------------------  -------------- ---------------
    Total revenues                                   $     610.1       $   583.3
    Income before extraordinary item                        72.1            38.6
    Net income                                              71.5            35.5
    Net income per share                             $      6.91       $    3.51
------------------------------------------------  -------------- ---------------

        The pro forma operating results include each acquiree's  pre-acquisition
results  of  operations  for the  indicated  years with  adjustments  to reflect
amortization  of  excess  cost over n et assets  acquired  and other  identified
intangible assets,  additional depreciation on the increase to fair market value
of fixed assets,  interest expense on the acquisition  borrowings and the effect
of income taxes thereon.  The pro forma information given above does not purport
to be indicative  of the results that  actually  would have been obtained if the
operations were combined during the periods  presented and is not intended to be
a projection of the future results or trends.

NOTE 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        The  accompanying   consolidated   financial   statements   reflect  the
application of the following significant accounting policies:

PRINCIPLES OF CONSOLIDATION

        The  consolidated  financial  statements  include  the  accounts  of the
Company  and  its  wholly  owned  subsidiaries.   All  significant  intercompany
transactions and accounts have been eliminated in the accompanying  consolidated
financial statements.

                                       31


<PAGE>



CASH EQUIVALENTS

        The  Company   considers  all  short-term   investments   with  original
maturities of three months or less when acquired to be cash equivalents.

INVENTORIES

        Inventories  are stated at the lower of cost or market.  The cost of 41%
and  25%  of the  Company's  inventories  as of  December  31,  1999  and  1998,
respectively,  was determined on the first-in, first-out (FIFO) method, with the
cost of the remaining  inventories  determined on the last-in,  first-out method
(LIFO).  Had all inventories  been determined on the FIFO method at December 31,
1999 and 1998, the reported value of such inventories  would have been increased
by $1.4 million and $1.1 million, respectively.

PROPERTY, PLANT AND EQUIPMENT

        Property,  plant  and  equipment  is  stated  at cost  less  accumulated
depreciation. In the case of acquisitions, cost represents estimated fair market
value at date of acquisition.  Depreciation is provided using the  straight-line
method by making periodic  charges to income over the estimated  useful lives of
the assets, which are as follows:

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

Buildings and improvements                                           10-40 years
Machinery and equipment                                               3-12 years
--------------------------------------------------------------------------------


        Property,  plant and equipment  under capital  leases are amortized over
the shorter of the estimated useful life of the asset or the term of the lease.

        Maintenance and repairs are charged to expense as incurred,  while major
replacements  and  improvements  are  capitalized.   The  cost  and  accumulated
depreciation of items sold or retired are removed from the property accounts and
any gain or loss is recorded currently in the consolidated statements of income.

RESEARCH AND DEVELOPMENT

        Costs associated with research and development are expensed as incurred.

INTANGIBLE ASSETS

        The excess of purchase  costs over  amounts  allocated  to  identifiable
assets and  liabilities  of businesses  acquired  (goodwill) is amortized on the
straight-line  method  over 40  years.  Should  events  or  circumstances  occur
subsequent  to the  acquisition  of a business  which  bring into  question  the
realizable  value or  impairment  of the  related  goodwill,  the  Company  will
evaluate  the  remaining  useful  life and  balance of  goodwill,  and should an
impairment  be  identified,  a loss would be  recognized  to the extent that the
carrying value exceeds the fair value. The Company's principle considerations in
determining  impairment  include  the  strategic  benefit to the  Company of the
particular  business as measured by  undiscounted  current and  expected  future
operating cash flows of that particular business.

        Other  intangible  assets,  except pension assets,  are amortized on the
straight-line method over their estimated useful lives, which are as follows:

                Trademarks                                 40 years
                Technologies                               13-40 years
                Patents                                    8 years
                Non-compete                                3-5 years

ENVIRONMENTAL RESERVES

        The Company is subject to comprehensive and frequently changing federal,
state and local  environmental  laws and regulations,  and will incur additional
capital and operating costs in the future to comply with currently existing laws
and  regulations,  new  regulatory  requirements  arising from recently  enacted
statutes and possible new  statutory  enactments.  In addition to  environmental
laws that regulate the Company's ongoing operations, the Company is also subject
to environmental  remediation  liability.  It is the Company's policy to provide
and accrue for the estimated cost of environmental  matters,  on a nondiscounted
basis,  when it is probable that a liability has been incurred and the amount of
the liability can be reasonably estimated.  Such provisions and accruals exclude
claims for recoveries from insurance carriers or other third parties.

                                       32


<PAGE>
        Statement   of   Position   (SOP)   96-1,   "Environmental   Remediation
Liabilities"  was issued in October 1996 and adopted by the Company with minimal
impact in 1997. This SOP provides  authoritative guidance on specific accounting
issues  that are  present in the  recognition,  measurement  and  disclosure  of
environmental remediation liabilities.

INCOME TAXES

        The Company provides for deferred income taxes on differences that arise
when items are reported for financial statement purposes in years different from
those for income  tax  reporting  purposes  in  conformance  with  Statement  of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes."

REVENUE RECOGNITION

        Revenue from the continuing  operations is recognized  when the products
are shipped.

USE OF ESTIMATES

        The  preparation  of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

NEW ACCOUNTING PRONOUNCEMENTS

        SFAS  No.  133,  "Accounting  for  Derivative  Instruments  and  Hedging
Activities"  was issued in June 1998 and must be  adopted by the  Company by the
year 2000. This new pronouncement will require the Company to record derivatives
on the balance sheet as assets or liabilities,  measured at fair value and gains
or losses  resulting  from the changes in the values of those  derivatives to be
accounted  for depending on the use of the  derivative  and whether it qualifies
for hedge accounting. The Company is evaluating the standard and does not expect
it to have a  material  impact on the  financial  results  or  condition  of the
Company because the use of derivatives at the Company is not significant.

RECLASSIFICATIONS

        Certain  reclassifications  have  been  made to prior  year  amounts  to
conform to current year presentation.

NOTE 4.  DETAIL OF CERTAIN ASSETS AND LIABILITIES
<TABLE>

ALLOWANCE FOR DOUBTFUL ACCOUNTS

(IN THOUSANDS)
--------------------------------------------------------   ------------  -------------  -------------
YEARS ENDED DECEMBER 31,                                           1999           1998           1997
--------------------------------------------------------   ------------  -------------  -------------
<S>                                                        <C>           <C>            <C>
Balance at beginning of year                               $      1,729  $       2,244  $       1,883
Acquired in business acquisitions                                   407             --             --
Provision for doubtful accounts                                     601            673          1,854
Net write-offs                                                     (461)        (1,188)        (1,493)
--------------------------------------------------------   ------------  -------------  -------------
Balance at end of year                                     $      2,276  $       1,729  $       2,244
--------------------------------------------------------   ------------  -------------  -------------

INVENTORIES

(IN THOUSANDS)
--------------------------------------------------------------------------------------------------
As of December 31,                                                              1999          1998
---------------------------------------------------------------------  -------------  ------------
Raw materials and purchased components                                 $      14,481  $      8,575
Work in progress and finished goods                                           30,449        20,991
---------------------------------------------------------------------  -------------  ------------
Inventories                                                            $      44,930  $     29,566
---------------------------------------------------------------------  -------------  ------------

PROPERTY, PLANT AND EQUIPMENT

(IN THOUSANDS)
--------------------------------------------------------------------------------------------------
As of December 31,                                                             1999           1998
--------------------------------------------------------------------- -------------  -------------
Land                                                                  $       5,271  $       3,254
Buildings and improvements                                                   33,245         19,831
Machinery and equipment                                                     132,155         88,728
Construction in progress                                                      6,618          4,841
--------------------------------------------------------------------- -------------  -------------
                                                                            177,289        116,654
Accumulated depreciation                                                     47,290         34,252
--------------------------------------------------------------------- -------------  -------------
Property, plant and equipment, net                                    $     129,999  $      82,402
--------------------------------------------------------------------- -------------  -------------

                                       33
<PAGE>

INTANGIBLE ASSETS

(IN THOUSANDS)
-------------------------------------------------------------------------------------------------------
                                                                                 Net Balance
                                                         Accumulated    -------------------------------
                                           Original     Amortization
As of December 31,                             Cost             1999            1999               1998
                                        -----------   --------------    ------------      -------------
Excess cost over net assets acquired    $   239,020   $       22,358    $    216,662      $     179,965
Trademarks                                   26,988            3,023          23,965             24,662
Technologies                                 20,722            3,556          17,166             17,987
Patents                                       5,878            1,841           4,037              4,373
Non-compete agreements                        2,550              428           2,122                 --
Pension asset                                    --               --              --                414
Pension asset from discontinued operations       --               --              --              2,007
--------------------------------------  ------------  ----------------- ------------      -------------
Intangible assets                       $   295,158   $       31,206    $    263,952      $     229,408
--------------------------------------  ------------  ----------------- ------------      -------------

OTHER CURRENT LIABILITIES

(IN THOUSANDS)

As of December 31,                                                           1999                  1998
------------------------------------------------------------    -----------------     -----------------
Accrued interest                                                $           8,195     $           8,489
Accrued workers' compensation                                               3,798                 2,626
Current portion of postretirement medical
  and pension benefit reserves                                              3,005                 3,000
Accrued warranty                                                            1,291                   818
Other                                                                      17,594                17,448
------------------------------------------------------------    -----------------     -----------------
Other current liabilities                                       $          33,883     $          32,381
------------------------------------------------------------    -----------------     -----------------

OTHER LONG-TERM LIABILITIES

(IN THOUSANDS)

As of December 31,                                                           1999                  1998
------------------------------------------------------------    -----------------     -----------------
Postretirement medical and pension benefit reserves             $          18,969     $          20,985
Environmental reserves                                                      9,659                 9,904
Other                                                                       5,000                 5,000
------------------------------------------------------------    -----------------     -----------------
Other long-term liabilities                                     $          33,628     $          35,889
------------------------------------------------------------    -----------------     -----------------


NOTE 5.  SHAREHOLDERS' EQUITY

(IN THOUSANDS)

                                 COMMON   PAID-IN   RETAINED    UNEARNED    EMPLOYEE
                                 STOCK    CAPITAL   EARNINGS  COMPENSATION RECEIVALBES   TOTAL
                              ---------- --------- ---------- -----------  ----------  ---------
Balance-December 31, 1996     $       98 $  55,049 $    8,420 $    --      $      (30) $  63,537
Options exercised                     --        17         --          --          --         17
Net income for year                   --        --      7,466          --          --      7,466
------------------------------------------------------------------------------------------------
Balance-December 31, 1997             98    55,066     15,886          --         (30)    71,020
Options exercised                      1     1,512         --          --          --      1,513
Net income for year                   --        --     37,855          --          --     37,855
------------------------------------------------------------------------------------------------
Balance-December 31, 1998             99    56,892     53,741          --         (15)   110,717
Collection of employee receivables    --        --         --          --          15         15
Options exercised                      1     1,297         --          --          --      1,298
Common stock issued                    3     4,977         --      (2,217)         --      2,763
Amortization of unearned
  compensation                        --        --         --         606          --        606
Net income for year                   --        --     67,276          --          --     67,276
------------------------------------------------------------------------------------------------
Balance-December 31, 1999     $      103 $  63,166 $  121,017 $    (1,611) $       --  $ 182,675
------------------------------------------------------------------------------------------------
</TABLE>



                                       34


<PAGE>



COMMON AND PREFERRED STOCK

        The Company  authorized  200,000,000  shares of Common  Stock  (voting),
1,000,000 shares of Class B Common Stock  (non-voting) and 20,000,000  shares of
preferred stock. No Class B Common Stock or preferred stock has been issued.

        In  October  1995,  the  Board of  Directors  of the  Company  adopted a
Shareholder  Rights Plan and declared a dividend of one right ("Right") for each
outstanding  share of the Company's  common stock held by shareholders of record
on October 16, 1995.  When  exercisable,  each Right  entitles  shareholders  of
record to purchase  from the Company one  one-thousandth  of a share of Series A
Junior Participating  Preferred Stock at an exercise price of $32.00, subject to
certain adjustments. The Company authorized 20,000 shares of such stock pursuant
to this plan. The Rights will become exercisable, and will trade separately from
the  common  stock,  only  if a  person  or  group  acquires  15% or more of the
Company's  outstanding common stock or commences a tender or exchange offer that
would  result  in that  person  or  group  owning  15% or more of the  Company's
outstanding common stock.  Subsequently,  upon the occurrence of certain events,
holders of Rights will be entitled to purchase  common stock of the Company or a
third-party  acquiror at an amount  equal to twice the Right's  exercise  price.
Until the Rights  become  exercisable,  they may be  redeemed  at the  Company's
option at a price of one cent per Right.  The Rights  expire on October 4, 2005.
The Rights were amended as of January 31, 2000 (see footnote 18).

        On February 1, 1999 the Company issued 98,000 shares of Restricted Stock
to certain key  executives.  This stock has a three year vesting  period and the
expense of this unearned compensation will be amortized over the vesting period.

NOTE 6.  LONG-TERM DEBT

Long-term debt consisted of the following:

(IN THOUSANDS)
--------------------------------------------  ------------   ------------
AS OF DECEMBER 31,                                    1999           1998
--------------------------------------------  ------------   ------------
Revolving credit line                         $       --     $       --
Tranche A term loan                                  9,200             --
Tranche B term loan                                  9,950         56,632
Industrial revenue bonds                             3,100             --
Capital lease                                        1,381          1,593
--------------------------------------------  ------------   ------------
Total debt                                          23,631         58,225
Current maturities                                  (1,936)        (9,039)
--------------------------------------------  ------------   ------------
Long-term debt                                $     21,695   $     49,186
--------------------------------------------  ------------   ------------

Maturities of long-term debt, are as follows:

(IN THOUSANDS)
------------------------------------------------------------
As of December 31, 1999
2000                                              $    1,936
2001                                                   2,163
2002                                                   2,280
2003                                                   2,544
2004                                                   3,473
Thereafter                                            11,235
------------------------------------------------------------

SENIOR BANK CREDIT FACILITY

        In conjunction  with the  acquisition of Imperial on April 29, 1999, the
Company  entered  into a new Senior Bank Credit  Facility.  The new  facility is
comprised of a $50 million Term A Loan, a $50 million Term B Loan and an

                                       35


<PAGE>



undrawn $75 million Revolving Credit Facility. Proceeds were used to finance the
Imperial  acquisition,  to refinance the Company's then outstanding  senior bank
debt of $36.6  million,  and for  working  capital and other  general  corporate
purposes.

        At the Company's  election,  interest rates per annum on the Term A Loan
and the  revolving  credit line are  fluctuating  rates of interest  measured by
reference to either (a) an adjusted London interbank offered rate (LIBOR) plus a
borrowing  margin or (b) an alternate  base rate (ABR) plus a borrowing  margin.
Such borrowing margins range between 1.50% and 2.50% for LIBOR loans and between
0.50% and 1.50% for ABR loans, fluctuating within each range in 0.25% increments
based on the Company  achieving certain  financial  results.  Interest rates per
annum  applicable to the Term B Loan are either (a) LIBOR plus a margin of 2.75%
or (b) ABR plus a margin of 1.75%. Additionally,  various fees related to unused
commitments,  letters of credit and  administration of the facility are incurred
by the Company.  Borrowings under the Senior Bank Credit Facility are guaranteed
by each of the Company's subsidiaries and are secured by the assets and stock of
the Company and its  Guarantor  Subsidiaries.  The Term A Loan and the Revolving
Credit  Facility  mature on April 29, 2004 and the Term B Loan  matures on April
29, 2005. As of December 31, 1999, availability under the revolving credit line,
after consideration of outstanding letters of credit of $7.5 million,  was $67.5
million and the weighted  average  interest rate of all outstanding  loans under
the Senior Bank Credit  Facility was 8.5%.  In  connection  with the sale of the
freight car operations,  net proceeds were used to pay down $40.0 million of the
Term A Loan and $40.0 million of the Term B Loan.

        The Senior Bank Credit Facility  contains  various  financial  covenants
including  capital  expenditure  limitations,   minimum  leverage  and  interest
coverage ratios, and minimum net worth. The agreement also restricts the Company
from paying dividends and making other  distributions in certain  circumstances,
and  limits  the  ability  to  repurchase  common  stock and  prepay  the Senior
Subordinated Notes.

INDUSTRIAL REVENUE BONDS

        On April 1, 1999,  the  Company,  through its wholly  owned  subsidiary,
Bostrom Seating,  Inc., issued  Industrial  Revenue Bonds for $3.1 million which
bear  interest  at a variable  rate (5.7% as of  December  31,  1999) and can be
redeemed by the Company at any time. The bonds are secured by a letter of credit
issued by the Company.  The bonds have no  amortization  and mature in 2014. The
bonds are also subject to a weekly "put"  provision by the holders of the bonds.
In the  event  that any or all of the bonds are put to the  Company  under  this
provision,  the  Company  would  either  refinance  such bonds  with  additional
borrowings under the Revolving Credit Facility or use available cash on hand.

OTHER

        The company has entered into an interest  rate contract to fix a portion
of the cost of its variable rate bank debt.  This contract  limits the effect of
market  fluctuations  on the interest cost of floating rate debt.  The impact of
fixed versus variable interest rates is recorded as incurred,  as a component of
interest expense.  The notional  principal  amounts  outstanding on the interest
rate contract covering the current period is $15.0 million at a 6.14% fixed rate
of interest plus the applicable borrowing margin. The contract matures in August
2000.  Costs  associated  with  obtaining the Senior Bank Credit  Facility,  the
Senior Subordinated Notes described in Note 7 and other indebtedness  aggregated
to $5.7 million as of December 31, 1999.  Such costs are amortized over the term
of the related debt.  Amortization of deferred  financing costs amounted to $1.0
million,  $1.9 million and $2.2  million for the years ended  December 31, 1999,
1998,  and 1997,  respectively.  As a result of prepayment of debt,  the Company
recorded extraordinary non-cash charges, net of income tax of $2.5 million, $1.1
million and $2.0 million for the years ended  December 31, 1999,  1998 and 1997,
respectively,  to write off related unamortized  deferred financing costs. As of
December 31, 1999 and 1998, accumulated amortization of deferred financing costs
was $1.7 million and $4.3 million, respectively.

NOTE 7.  SENIOR SUBORDINATED NOTES

        In 1995,  the Company issued $100 million of Senior  Subordinated  Notes
which are due  August 15,  2005.  In 1997,  the  Company  issued $80  million of
additional   notes  due  August  15,   2005   (collectively,   the  Notes)  with
substantially identical terms to the already outstanding notes at a $3.5 million
premium,  for an effective  rate of 10.8%.  These Notes have an interest rate of
$11.75% per annum and are guaranteed on an unsecured,  senior subordinated joint
and  several  basis  by  each of the  Company's  subsidiaries.  Pursuant  to the
settlement of separate  interest  rate  contracts in effect when each portion of
the Notes was  issued,  the  Company  realized  a $0.8  million  loss and a $2.6
million gain upon the 1997 and 1995  issuances,  respectively.  The gain and the
loss are being amortized as an offset to interest

                                       36


<PAGE>



expense  over  the  term  of  the  Notes.  The  Notes  are  subordinated  to all
indebtedness under the Senior Bank Credit Facility and cross-default  provisions
do exist. Except in certain limited circumstances,  the Notes are not subject to
optional  redemption by the Company prior to August 15, 2000, and thereafter are
subject to optional redemption by the Company at declining  redemption premiums.
Upon the occurrence of a change in control (as defined), the Company is required
to offer to  repurchase  the  Notes  at a price  equal to 101% of the  principal
amount thereof plus accrued interest.  In August,  1999 the Company  repurchased
and retired Notes with a face value of $1.25 million.

        The Company's  future  operating  performance  and ability to service or
refinance  the Notes and to extend or  refinance  the  senior  bank debt will be
subject to future  economic  conditions  and to  financial,  business  and other
factors, many of which are beyond the Company's control.

NOTE 8.  EMPLOYEE BENEFIT PLANS

PENSION BENEFITS

        Certain of the Company's  subsidiaries  have qualified,  defined benefit
plans covering a majority of their employees. Company contributions to the plans
were made based upon the minimum amounts required under the Employee  Retirement
Income  Security  Act. The plans'  assets are held by  independent  trustees and
consist primarily of equity and fixed income securities.

        Following the  acquisition of TCI, a certain TCI plan was frozen and was
replaced with a defined  contribution plan. The Company,  after consideration of
previously unrecognized amounts,  recognized a $1.7 million non-cash gain on the
termination of the plan in 1998.

POSTRETIREMENT BENEFITS

        The Company provides health care benefits and life insurance for certain
salaried and hourly retired employees.  Employees may become eligible for health
care  benefits  if  they  retire  after  attaining  specified  age  and  service
requirements.  These benefits are subject to deductibles,  co-payment provisions
and other limitations.

        The  Company  does  not  offer  any  other  significant   postretirement
benefits. The following table sets forth the plans' funded status:
<TABLE>

(IN THOUSANDS)
------------------------------------------------------------------------------------------------------
                                                        PENSION BENEFITS      POSTRETIREMENT BENEFITS
                                                     -----------------------  ------------------------
AS OF DECEMBER 31,                                        1999        1998         1999         1998
CHANGE IN BENEFIT OBLIGATION
<S>                                                  <C>          <C>         <C>         <C>
Benefit obligations at beginning of year             $     7,667  $   12,165  $    16,779 $     14,647
Benefit obligations acquired in business acquisition       7,347          --          178           --
Benefit obligations retained from discontinued operations 27,316          --           --           --
Service cost                                                 533         418          341          425
Interest cost                                              2,018         620        1,212        1,135
Plan amendment                                                --         878         (260)          --
Actuarial loss                                            (2,908)        217        2,105        1,873
Settlement gain                                               --      (1,688)          --           --
Benefits paid                                             (1,641)     (4,943)      (1,916)      (1,301)
--------------------------------------------------   -----------  ----------  ----------- ------------
Benefit obligations at end of year                   $    40,322  $    7,667  $    18,439 $     16,779
--------------------------------------------------   -----------  ----------  ----------- ------------
Change in Plan Assets

Fair value of plan assets at beginning of year       $     5,890  $    8,220  $        -- $         --
Plan assets acquired in business acquisition               7,384          --           --           --
Plan assets retained from discontinued operations         24,334          --           --           --
Actual return on plan assets                               5,665         675           --           --
Employer contribution                                      1,172       1,938           --           --
Benefits paid                                             (1,641)     (4,943)          --           --
--------------------------------------------------   -----------  ----------  ----------- ------------
Fair value of plan assets at end of year             $    42,804  $    5,890  $        -- $         --
--------------------------------------------------   -----------  ----------  ----------- ------------

Plan assets in excess of benefit obligations         $     2,482  $     --    $        -- $         --


                                       38


<PAGE>



                                                      Pension Benefits      Postretirement Benefits
AS OF DECEMBER 31,                               -----------------------  -------------------------
                                                          1999        1998         1999         1998
Benefit obligations in excess of plan assets                --      (1,777)     (18,439)     (16,779)
Unrecognized net (gain) /loss                           (8,764)       (272)       3,333        1,279
Unrecognized prior service cost                            980         686         (241)          --
-------------------------------------------------- -----------  ----------  ----------- ------------
Net amount recognized                              $    (5,302) $   (1,363) $   (15,347)$    (15,482)
-------------------------------------------------- -----------  ----------  ----------- ------------


Recognized in Balance Sheet

Accrued benefit obligation                     $     (6,627)$      (1,777)$    (15,347) $    (15,482)
Pension asset                                         1,325            --           --            --
Intangible asset                                         --           414           --            --
---------------------------------------------  ------------ ------------- ------------  ------------
Net amount recognized                          $     (5,302)$      (1,363)$    (15,347) $    (15,482)
---------------------------------------------  ------------ ------------- ------------  ------------
Weighted-Average Assumptions

Discount rate                                         8.00%         6.75%        8.00%         6.75%
Expected return on plan assets                        9.00%         9.00%           --            --
Rate of compensation increase                    3.00-4.00%    3.00-4.00%           --            --
---------------------------------------------  ------------ ------------- ------------  ------------

        For  measurement  purposes,  a 7.5%  annual  rate of increase in the per
capita cost of covered  health  care  benefits  was assumed for 1999  decreasing
gradually to an ultimate rate of 5.00% by the year 2005.

        The Company  recognized  a minimum  pension  liability  for  underfunded
plans. The minimum  liability is equal to the excess of the accumulated  benefit
obligation over the fair market value of plan assets. A corresponding  amount is
recognized as an intangible asset. The table above does not reflect $4.7 million
of  net  pension  liabilities  as  of  December  31,  1998,  retained  from  the
discontinued freight car operations.

COMPONENTS OF NET PERIODIC BENEFIT COST

(IN THOUSANDS)

                                               Pension Benefits       Postretirement Benefits
                                          --------------------------  ------------------------
Years ended December 31,                       1999    1998     1997      1999    1998    1997
----------------------------------------------------------------------------------------------
Service cost                              $     533 $   418 $    325  $    341 $   425 $   365
Interest cost                                 2,018     620      674     1,212   1,135   1,081
Expected return on plan assets               (2,076)   (605)  (2,433)       --      --      --
Amortization of unrecognized net loss            --      --    1,807        69      16      --
Prior service cost                               58      31       14       (19)     --      --
Net periodic benefit cost                 $     533 $   464 $    387  $  1,603 $ 1,576 $ 1,446
----------------------------------------------------------------------------------------------

        Assumed  health care cost trend rates have a  significant  effect on the
amounts  reported for the health care plans.  A  one-percentage-point  change in
assumed health care cost trend rates would have the following effects:

(IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
As of December 31, 1999                                           1-Percentage-       1-Percentage-
                                                                 Point Increase       Point Decrease
-----------------------------------------------------------    ----------------    ---------------------
Effect on total of service and interest cost                   $         328          $      (277)

Effect on postretirement benefit obligation                            2,855               (2,484)
-----------------------------------------------------------    ----------------    ---------------------

DEFINED CONTRIBUTION PLANS

        Certain of the Company's  subsidiaries also maintain qualified,  defined
contribution  plans which provide  benefits to their employees based on employee
contributions,  years  of  service,  employee  earnings  or  certain  subsidiary
earnings, with discretionary  contributions allowed.  Expenses relating to these
plans, were $3.8 million, $3.1 million and $2.9 million for the years 1999, 1998
and 1997, respectively.

                                       38


<PAGE>



NOTE 9.  INCOME TAXES

        The provision for income taxes for income before extraordinary items and
discontinued operations includes current and deferred components as follows:

(IN THOUSANDS)
----------------------------------------------------------   ------------   ------------   ------------
YEARS ENDED DECEMBER 31,                                             1999           1998           1997
----------------------------------------------------------   ------------   ------------   ------------
Current tax provision:
Federal                                                      $     11,892   $      5,054   $      6,172
State                                                               3,310          2,776          1,258
----------------------------------------------------------   ------------   ------------   ------------
                                                                   15,202          7,830          7,430
Deferred tax (benefit) provision                                     (753)         3,023          5,451
----------------------------------------------------------   ------------   ------------   ------------
Provision for income taxes for income from continuing
  operations, before extraordinary items and discontinued
   operations                                                $     14,449   $     10,853   $     12,881
----------------------------------------------------------   ------------   ------------   ------------

        The   provision  for  income  taxes  before   extraordinary   items  and
discontinued  operations  differs  from the amounts  computed  by  applying  the
federal statutory rate as follows:

(IN THOUSANDS)
----------------------------------------------------------   ------------   ------------   ------------
YEARS ENDED DECEMBER 31,                                             1999           1998           1997
----------------------------------------------------------   ------------   ------------   ------------
Income taxes at federal statutory rate                              35.0%          35.0%          35.0%
State income taxes, net of federal benefit                           6.6           10.3            5.2
Nondeductible amortization expense                                   5.4            9.0            6.1
Other, net                                                          (1.4)           2.7           (1.0)
---------------------------------------------------------    ------------   ------------   ------------
Effective income tax rate                                           45.6%          57.0%          45.3%
---------------------------------------------------------    ------------   ------------   ------------

Components of deferred tax benefits (obligations) consist of the following:

(IN THOUSANDS)

As of December 31,                                         1999                                1998
                                              ------------------------------    - ------------------------------
                                                Benefits        Obligations        Benefits        Obligations
                                              ------------     -------------      -----------     --------------
Postretirement medical and
  pension benefit reserves                    $      8,030     $          --      $    12,458     $           --
Environmental reserve                                4,219                --            4,155                 --
Accrued workers' compensation reserve                1,482                --            1,862                 --
Warranty reserve                                       734                --            2,924                 --
Vacation reserve                                     1,984                --            1,805                 --
Property, plant and equipment                           --           (17,827)              --            (26,487)
Trademarks and technologies                             --           (17,616)              --            (18,339)
Inventories                                             --            (2,700)              --             (2,412)
Other                                                4,997            (4,292)           6,570             (3,419)
------------------------------------------    ------------     -------------      -----------     --------------
Deferred tax benefits (obligations)           $     21,446     $     (42,435)     $    29,774     $      (50,657)
------------------------------------------    ------------     -------------      -----------     --------------
</TABLE>

        In the consolidated balance sheets, these deferred benefits and deferred
obligations  are classified as deferred income tax assets or deferred income tax
liabilities,  based on the  classification of the related liability or asset for
financial reporting. A deferred tax asset or liability that is not related to an
asset or  liability  for  financial  reporting,  including  deferred  tax assets
related to carry  forwards,  are classified  according to the expected  reversal
date of the  temporary  difference  as of the end of the year.  Tax credit carry
forwards  which existed at December 31, 1998  consisted of certain state tax net
operating  losses  which  primarily  related  to the  freight  car  business.  A
valuation  allowance of $1.0 million as of December 31, 1998,  has been recorded
to offset  these state tax credit  carry  forwards.  As of December 31, 1999 and
1998, no other valuation  allowances are deemed necessary as management  expects
to realize all other deferred benefits as future tax deductions.

                                       39


<PAGE>



NOTE 10.  STOCK OPTION PLANS

        The  Company  maintains  a Stock  Option  Plan  (the  Option  Plan)  for
management and  nonaffiliated  directors of the Company and has reserved 989,000
shares of common  stock for  issuance  under such plan.  Options  are granted to
management  at the  discretion  of the  Company's  directors  and pursuant to an
option program for nonaffiliated  Company  directors.  Options granted under the
Option Plan  generally  have an exercise price equal to the closing market value
of the Company's  common stock as of the date of grant,  and become  exercisable
under various vesting periods of up to three years.

Certain information  regarding stock options issued by the Company is summarized
below:

(SHARES IN THOUSANDS)
------------------------------------------------------------------------------
                                Outstanding                Exercisable
                        ------------------------------------------------------
                                          Wtd. Avg.                  Wtd. Avg.
                              Shares    Exer. Price       Shares   Exer. Price
                         -----------  ----------------  --------  ------------
December 31, 1996                673  $          10.10       472  $      10.82
Issued                           209              6.54
Exercised                        (10)             2.79
Canceled                         (50)            15.40
------------------------------------  ----------------  --------  ------------
December 31, 1997                822              8.94       651          9.74
Issued                            72             15.35
Exercised                       (102)             6.57
------------------------------------  ----------------  --------  ------------
December 31, 1998                792              9.79       670          9.62
Issued                            48             17.14
Exercised                       (132)             7.02
Canceled                         (47)            16.85
------------------------------------  ----------------  --------  ------------
December 31, 1999                661  $          10.37       604  $       9.84
------------------------------------  ----------------  --------  ------------


<TABLE>

(SHARES IN THOUSANDS)
----------------------------------------------------------------------------------------------------
As of December 31, 1999                         Outstanding                     Exercisable
                                     ---------------------------------- ----------------------------
                                                Wtd. Avg      Wtd. Avg.                    Wtd. Avg.
Range of Exercise Prices      Shares     Remaining Years    Exer. Price      Shares      Exer. Price
-------------------------   -------- -------------------   ------------ -----------    -------------
<S>                              <C>                <C>    <C>                  <C>    <C>
$3.06 - $13.50                   472                6.66   $       7.25         455    $        7.02
$14.50 - $25.63                  188                6.00          18.19         149            18.46
------------------------- ---------- --------------------  ------------ -------------  -------------
$3.06 - $25.63                   660                6.47          10.37         604             9.84
------------------------- ---------- --------------------  ------------ -------------  -------------
</TABLE>

        The Company measures  compensation  cost under the intrinsic value based
method.  Had  compensation  expense been  determined  under the fair value based
method,  pro forma net income and diluted  earnings per share would have been as
follows:

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------
Years ended December 31                     1999            1998            1997
--------------------------------------------------------------------------------
Pro forma net income                     $  67.1         $  37.7         $   6.9
Pro forma diluted earnings per share        6.48            3.73            0.70
--------------------------------------------------------------------------------

        The fair value of each option  grant is  estimated  on the date of grant
using the  Black-Scholes  pricing model assuming an expected life of 10 years, a
zero dividend yield and the following weighted average assumptions:

--------------------------------------------------------------------------------
Years ended December 31,                    1999            1998            1997
Risk free interest rate                     5.6%             5.3%           6.3%
Volatility rate                            61.6%            60.9%          64.9%
--------------------------------------------------------------------------------



                                       40


<PAGE>



NOTE 11.  ENVIRONMENTAL MATTERS

        The Company is subject to comprehensive and frequently changing federal,
state and local  environmental  laws and regulations,  and will incur additional
capital and operating costs in the future to comply with currently existing laws
and  regulations,  new  regulatory  requirements  arising from recently  enacted
statutes and possible new  statutory  enactments.  In addition to  environmental
laws  that  regulate  the  Company's   subsidiaries'  ongoing  operations,   the
subsidiaries also are subject to environmental remediation liability.  Under the
federal  Comprehensive  Environmental  Response,  Compensation and Liability Act
(CERCLA) and analogous state laws, the Company's subsidiaries may be liable as a
result of the release or  threatened  release of hazardous  substances  into the
environment.  The  Company's  subsidiaries  are  currently  involved  in several
matters relating to the investigation  and/or remediation of locations where the
subsidiaries have arranged for the disposal of foundry and other wastes.

        Such matters  include  five  situations  in which the Company,  has been
named  or is  believed  to be  Potentially  Responsible  Parties  (PRPs)  in the
contamination  of the  sites.  Additionally,  environmental  remediation  may be
required at two of the  facilities at which soil and  groundwater  contamination
has been identified.

        The  Company   believes  that  it  has  valid  claims  for   contractual
indemnification  against  prior  owners  for  certain of the  investigatory  and
remedial costs at each of the above  mentioned  sites.  As a result of a private
party settlement of certain pending litigation with a prior owner of Gunite, TCI
and Gunite will not be  responsible  (through a contractual  undertaking  by the
former owner) for certain  liabilities  and costs  resulting from Gunite's waste
disposal prior to the  acquisition of Gunite by TCI in September 1987 at certain
of such  sites.  The  Company  has been  notified,  however,  by  certain  other
contractual   indemnitors   that  they  will  not  honor   future   claims   for
indemnification.  Accordingly,  the Company is litigating indemnification claims
and  there is no  assurance  that even if  successful  in any such  claims,  any
judgments  against the indemnitors will ultimately be recoverable.  In addition,
the Company believes it is likely that it has incurred some liability at various
sites for activities and disposal  following  acquisition which would not in any
event be covered by indemnification by prior owners.

        As of December 31, 1999,  the Company has a $10.4 million  environmental
reserve.  This  reserve is based on current cost  estimates  and does not reduce
estimated  expenditures to net present value. The Company currently  anticipates
spending approximately $0.7 million per year in 2000 through 2004 for monitoring
the various  environmental  sites  associated  with the  environmental  reserve,
including  attorney and consultant costs for strategic planning and negotiations
with  regulators  and other PRPs, and payment of remedial  investigation  costs.
These sites are generally in the early  investigatory  stages of the remediation
process  and  thus  it  is  anticipated   that  significant  cash  payments  for
remediation  will  not be  incurred  for  at  least  several  years.  After  the
evaluation and  investigation  period,  the  investigation and remediation costs
will likely increase because the actual remediation of the various environmental
sites  associated with the  environmental  reserve will likely be under way. Any
cash  expenditures  required by the Company or its  subsidiaries  to comply with
applicable environmental laws and/or to pay for any remediation efforts will not
be reduced or otherwise affected by the existence of the environmental  reserve.
Due to the early  stage of  investigation  of many of the  sites  and  potential
remediations referred to above, there are significant  uncertainties as to waste
quantities  involved,  the extent and  timing of the  remediation  which will be
required, the range of acceptable solutions, costs of remediation and the number
of PRPs  contributing to such costs.  Based on all of the information  presently
available to it, the Company  believes  that the  environmental  reserve will be
adequate  to cover its future  costs  related to the sites  associated  with the
environmental  reserve,  and that any additional  costs will not have a material
adverse  effect on the  financial  condition  or  results of  operations  of the
Company.  However,  the  discovery of  additional  sites,  the  modification  of
existing laws or  regulations,  the  imposition  of joint and several  liability
under  CERCLA or the  uncertainties  referred  to above  could  result in such a
material adverse effect.

NOTE 12.  CONTINGENCIES

        The  Company  is  involved  in  certain  threatened  and  pending  legal
proceedings including workers' compensation claims arising out of the conduct of
its businesses. In the opinion of management, the ultimate outcome of such legal
proceedings will not have a material adverse effect on the financial position or
results of operations of the Company.

        Additionally,  the Company is involved  in various  warranty  and repair
claims with its  customers  as a normal  course of  business.  In the opinion of
management, accrued warranty costs relating to these obligations are adequate.

                                       41


<PAGE>



NOTE 13.  COMMITMENTS

        The Company leases certain real property and equipment  under  long-term
leases  expiring at various  dates through 2032.  The leases  generally  contain
specific renewal or purchase options at the then fair market value.

Future minimum lease payments at December 31, 1999, are as follows:
<TABLE>

(IN THOUSANDS)

                                                                        Capital                  Operating
                                                                          Lease                     Leases
                                                                ---------------          -----------------
<S>                                                             <C>                      <C>
2000                                                            $           395          $           4,556
2001                                                                        395                      3,364
2002                                                                        281                      2,403
2003                                                                        125                      1,461
2004                                                                         86                      1,178
Thereafter                                                                1,917                      2,305
----------------------------------------------------------------------------------------------------------
Total minimum lease payments                                              3,199          $          15,267
Less: Amount representing interest                                        1,818
----------------------------------------------------------------------------------------------------------
Present value of minimum lease payments                                   1,381
Less: Current portion of obligation under capital lease                     236
----------------------------------------------------------------------------------------------------------
Noncurrent obligation under capital lease                       $         1,145
----------------------------------------------------------------------------------------------------------

        While the Company is liable for maintenance, insurance and similar costs
under most of its  leases,  such costs are not  included  in the future  minimum
lease payments.

        The Company  assumed the capital  lease in its  acquisition  of TCI. The
related  asset  balance of $1.9  million is included as a component of buildings
and  improvements.  Accumulated  depreciation of this asset was $0.5 million and
$0.4 million as of December 31, 1999 and 1998, respectively.

        Total rental expense, of continuing operations, for the years 1999, 1998
and 1997 amounted to $5.8 million, $3.6 million and $3.2 million, respectively.

NOTE 14.  UNAUDITED QUARTERLY INFORMATION

(IN MILLIONS, EXCEPT PER SHARE DATA)
-------------------------------------------------------------------------------------------------------
1999                                                 First         Second          Third         Fourth
                                                   Quarter        Quarter        Quarter        Quarter
                                              ------------   ------------  -------------  -------------
Total revenue                                 $      117.3   $      134.4  $       141.1  $       148.8
Gross profit                                          24.6           28.3           26.5           32.4
Income from continuing operations
  after extraordinary items                            2.9             2.5           4.1            5.2
Net income                                            14.6            43.3           4.1            5.2
Diluted earnings per share                            1.47           4.23           0.40           0.50
--------------------------------------------  ------------   ------------  -------------  -------------


1998                                                 First         Second          Third         Fourth
                                                   Quarter        Quarter        Quarter        Quarter
                                              ------------   ------------  -------------  -------------
Total revenue                                 $      113.8   $      109.0  $       105.7  $       105.0
Gross profit                                          22.9           21.9           22.7           22.2
Income from continuing operations                      1.0            1.9            2.3            2.4
  after extraordinary items
Net income                                            14.0            6.2            8.0            9.7
Diluted earnings per share                            1.40           0.61           0.78           0.96
--------------------------------------------  ------------   ------------  -------------  -------------

</TABLE>


                                       42


<PAGE>



NOTE 15.  GUARANTOR SUBSIDIARIES

        The  Notes are fully and  unconditionally  guaranteed  on an  unsecured,
senior  subordinated,  joint and several basis by each of the Company's  current
subsidiaries.  The following condensed  consolidating  financial data illustrate
the composition of the Parent Company, Guarantor Subsidiaries, and JAIX Leasing.
Separate complete financial statements of the respective Guarantors Subsidiaries
would not provide additional  information which would be useful in assessing the
financial composition of the Guarantor Subsidiaries and thus are not presented.

        As  described  in Note 1, the  Company  sold its  freight  car  business
effective June 3, 1999. The non-guarantor  subsidiary,  JAIX Leasing, along with
two guarantor  subsidiaries  JAC and FCS, were part of the freight car business.
The operations of the freight car business have been  reflected as  discontinued
operations in the accompanying  consolidated  financial statements for all years
presented: however, the following data, for clarity, has not been restated.

        Investments in  subsidiaries  are accounted for by the Parent Company on
the equity method for purposes of the supplemental  consolidating  presentation.
Earnings of  subsidiaries  are,  therefore,  reflected  in the Parent  Company's
investment  accounts and earnings.  The principal  elimination entries eliminate
the Parent Company's  investment in subsidiaries  and intercompany  balances and
transactions.

                                       43


<PAGE>



<TABLE>


                      CONDENSED CONSOLIDATING BALANCE SHEET

(IN MILLIONS)

--------------------------------------------------------------------------------------------------------------------
AS OF DECEMBER 31, 1999                                        PARENT      GUARANTOR
                                                              COMPANY   SUBSIDIARIES   ELIMINATIONS    CONSOLIDATED

<S>                                                           <C>            <C>        <C>             <C>
Cash and cash equivalents                                     $  15.4        $  (6.6)   $        --     $       8.8
Accounts receivable, net                                           --           61.1             --            61.1
Inventories                                                        --           44.9             --            44.9
Prepaid expenses and other                                        5.7           15.3             --            21.0
--------------------------------------------------------------------------------------------------------------------
Total current assets                                             21.1          114.7             --           135.8
Property, plant and equipment, net                                0.6          129.4             --           130.0
Other assets                                                    233.8          262.6         (226.8)          269.6
--------------------------------------------------------------------------------------------------------------------
Total assets                                                  $ 255.5        $ 506.7     $   (226.8)    $     535.4
--------------------------------------------------------------------------------------------------------------------
Accounts payable                                              $   0.2        $  26.4     $       --     $      26.6
Other current liabilities                                       (28.8)          84.2             --            55.4
--------------------------------------------------------------------------------------------------------------------
Total current liabilities                                       (28.6)         110.6             --            82.0
Noncurrent liabilities                                            6.8           61.5             --            68.3
Long-term debt, less
 current maturities and intercompany
  advances (receivables)                                         94.6          107.8             --           202.4
Total shareholders' equity                                      182.7          226.8         (226.8)          182.7
--------------------------------------------------------------------------------------------------------------------
Total liabilities and
 shareholders' equity                                         $ 255.5        $ 506.7      $  (226.8)     $    535.4
--------------------------------------------------------------------------------------------------------------------



                   CONDENSED CONSOLIDATING STATEMENT OF INCOME

(IN MILLIONS)

--------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999                                  PARENT       GUARANTOR
                                                             COMPANY    SUBSIDIARIES   ELIMINATIONS    CONSOLIDATED

Total revenue                                                 $   --         $ 541.5      $      --      $    541.5
Cost of sales                                                     --           429.7             --           429.7
--------------------------------------------------------------------------------------------------------------------
Gross profit                                                      --           111.8             --           111.8
Selling, general, administrative
  and amortization expenses                                      4.4            50.5             --            54.9
--------------------------------------------------------------------------------------------------------------------
Operating income (loss)                                         (4.4)           61.3             --            56.9
Interest expense, net                                           12.8            12.5             --            25.3
Equity (earnings) of subsidiaries                              (27.7)             --           27.7              --
Provision (benefit) for income taxes                            (6.7)           21.1             --            14.4
--------------------------------------------------------------------------------------------------------------------
Income from continuing operations before
  extraordinary items and discontinued
   operations                                                   17.2            27.7          (27.7)           17.2

Discontinued operations:                                        29.8              --             --            29.8
  Gain on sale, net of income taxes
  Income from discontinued operations,
   net of income taxes                                          22.7              --             --            22.7
Extraordinary item, net of tax                                  (2.5)             --             --            (2.5)
--------------------------------------------------------------------------------------------------------------------
Net income (loss)                                             $ 67.2          $ 27.7      $  (27.7)       $    67.2
--------------------------------------------------------------------------------------------------------------------





                                       44


<PAGE>





                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(IN MILLIONS)

--------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999                               PARENT        GUARANTOR
                                                          COMPANY     SUBSIDIARIES    ELIMINATIONS     CONSOLIDATED

Cash flows from (used for)
 operating activities                                     $(25.5)         $  61.1        $      --        $   35.6
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
 investing activities:
Capital expenditures                                          --            (16.4)              --           (16.4)
Cash paid for acquisitions                                 (78.5)           (18.7)              --           (97.2)
Proceeds from sale of freight car business                 101.3               --               --           101.3
Changes in restricted
 cash/other                                                   --             (0.3)              --            (0.3)
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
 investing activities                                       22.8            (35.4)              --           (12.6)
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
 financing activities:
Proceeds from issuance of long-term debt                   100.0              3.1               --            103.1
Payments of term loans and
 capital lease                                            (137.5)            (0.2)              --           (137.7)
Retirement of subordinated debt                             (1.2)              --               --             (1.2)
Intercompany advances                                       32.9            (32.9)              --               --
Payment of deferred financing
 costs and other                                            (0.4)            (0.1)              --             (0.5)
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
 financing activities                                       (6.2)           (30.1)              --            (36.3)
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and
 cash equivalents from continuing operations                (8.9)            (4.4)              --            (13.3)
Net cash provided to discontinued operations               (11.3)              --               --            (11.3)
Cash and cash equivalents,
  beginning of year                                         35.6             (2.2)              --             33.4
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
 end of year                                             $  15.4          $  (6.6)      $       --        $     8.8
--------------------------------------------------------------------------------------------------------------------



                                       45


<PAGE>





                      CONDENSED CONSOLIDATING BALANCE SHEET

(IN MILLIONS)

--------------------------------------------------------------------------------------------------------------------
AS OF DECEMBER 31, 1998                               PARENT     GUARANTOR       JAIX
                                                     COMPANY  SUBSIDIARIES    LEASING  ELIMINATIONS    CONSOLIDATED

Cash and cash equivalents                              $47.4       $(13.5)       $5.2       $    --           $39.1
Accounts receivable, net                                  --          81.3        0.4            --            81.7
Inventories                                               --          66.7         --            --            66.7
Prepaid expenses and other                               3.1          12.0        1.1            --            16.2
--------------------------------------------------------------------------------------------------------------------
Total current assets                                    50.5         146.5        6.7            --           203.7
Property, plant and equipment, net                       2.4         114.4       18.2          (0.3)          134.7
Other assets                                           168.1         238.5        0.3        (160.9)          246.0
--------------------------------------------------------------------------------------------------------------------
Total assets                                          $221.0        $499.4      $25.2       $(161.2)         $584.4
--------------------------------------------------------------------------------------------------------------------
Accounts payable                                      $   --         $65.4       $0.2       $    --           $65.6
Other current liabilities                              (16.0)         93.9        2.4            --            80.3
--------------------------------------------------------------------------------------------------------------------
Total current liabilities                              (16.0)        159.3        2.6            --           145.9
Noncurrent liabilities                                    --          78.8        3.5            --            82.3
Long-term debt, less
  current maturities and intercompany
  advances (receivables)                               126.3         110.5        8.7            --           245.5
Total shareholders' equity                             110.7         150.8       10.4        (161.2)          110.7
--------------------------------------------------------------------------------------------------------------------
Total liabilities and
  shareholders' equity                                $221.0        $499.4      $25.2       $(161.2)         $584.4
--------------------------------------------------------------------------------------------------------------------



                   CONDENSED CONSOLIDATING STATEMENT OF INCOME

(IN MILLIONS)

--------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998                          PARENT     GUARANTOR       JAIX
                                                     COMPANY  SUBSIDIARIES    LEASING  ELIMINATIONS    CONSOLIDATED
Total revenue                                        $    --        $957.8       $8.3     $      --          $966.1
Cost of sales                                             --         821.0        4.9            --           825.9
--------------------------------------------------------------------------------------------------------------------
Gross profit                                              --         136.8        3.4            --           140.2
Selling, general, administrative
  and amortization expenses                              1.2          59.5        0.9            --            61.6
Gain on sale of leased freight cars                       --            --       (1.2)           --            (1.2)
Patent lawsuit settlement                                 --          (1.7)        --            --            (1.7)
Pension termination gain                                  --         (16.8)        --            --           (16.8)
--------------------------------------------------------------------------------------------------------------------
Operating income (loss)                                 (1.2)         95.8        3.7            --            98.3
Interest expense, net                                   12.6          16.9        0.9            --            30.4
Equity (earnings) of subsidiaries                      (47.4)           --         --          47.4              --
Provision (benefit) for income taxes                    (5.4)         33.2        1.1            --            28.9
--------------------------------------------------------------------------------------------------------------------
Net income (loss) before
  extraordinary item                                    39.0          45.7        1.7         (47.4)           39.0
Extraordinary item, net of tax                          (1.1)           --         --            --            (1.1)
--------------------------------------------------------------------------------------------------------------------
Net income (loss)                                      $37.9         $45.7       $1.7       $(47.4)           $37.9
--------------------------------------------------------------------------------------------------------------------

                                       46

<PAGE>






                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(IN MILLIONS)

--------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998                      PARENT       GUARANTOR       JAIX
                                                 COMPANY    SUBSIDIARIES    LEASING   ELIMINATIONS     CONSOLIDATED
Cash flows from (used for)
  operating activities                           $ (29.6)          $82.4       $3.9     $       --            $56.7
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for) investing activities:

Capital expenditures                                (0.1)          (11.4)        --             --            (11.5)
Leasing business asset additions                      --              --       (4.9)            --             (4.9)
Proceeds from sale of leased assets                   --              --       24.3             --             24.3
Changes in restricted

  cash/other                                         0.2            (0.1)        --             --              0.1
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
  investing activities                               0.1           (11.5)      19.4             --              8.0
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
financing activities:
Payments of term loans and
  capital lease                                    (36.7)           (0.2)        --             --            (36.9)
Net payments of JAIX
  Leasing debt                                        --              --      (20.0)            --            (20.0)
Intercompany advances                               88.0           (88.0)        --             --               --
Payment of deferred financing
  costs and other                                    0.5              --       (0.1)            --              0.4
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
financing  activities                               51.8           (88.2)     (20.1)            --            (56.5)
Net increase (decrease) in cash
and cash equivalents                                22.3           (17.3)       3.2             --              8.2
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
  beginning of year                                 25.1             3.8        2.0             --             30.9
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
  end of year                                      $47.4         $ (13.5)      $5.2        $    --             $39.1
--------------------------------------------------------------------------------------------------------------------



                                       47


<PAGE>



                   CONDENSED CONSOLIDATING STATEMENT OF INCOME

(In millions)
--------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997                      PARENT       GUARANTOR       JAIX
                                                 COMPANY    SUBSIDIARIES    LEASING    ELIMINATIONS    CONSOLIDATED
Total revenue                                   $     --          $642.8       $7.6       $      --          $650.4
Cost of sales                                         --           552.4        4.0              --           556.4
--------------------------------------------------------------------------------------------------------------------
Gross profit                                          --            90.4        3.6              --            94.0
Selling, general, administrative
  and amortization expenses                          1.1            53.5        0.1              --            54.7
Gain on sale of leased freight cars                   --              --       (0.8)             --            (0.8)
Reduction of environmental reserves                   --           (14.3)        --              --           (14.3)
--------------------------------------------------------------------------------------------------------------------
Operating income (loss)                             (1.1)           51.2        4.3              --            54.4
Interest expense, net                               12.3            20.9        2.2              --            35.4
Equity (earnings) of subsidiaries                  (17.6)             --         --            17.6              --
Provision (benefit) for income taxes                (5.3)           14.2        0.6              --             9.5
--------------------------------------------------------------------------------------------------------------------
Net income (loss) before
  extraordinary item                                 9.5            16.1        1.5           (17.6)            9.5
Extraordinary item, net of tax                      (2.0)             --         --              --            (2.0)
--------------------------------------------------------------------------------------------------------------------
Net income (loss)                                   $7.5           $16.1       $1.5         $ (17.6)           $7.5
--------------------------------------------------------------------------------------------------------------------



                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(IN MILLIONS)

--------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997                     PARENT       GUARANTOR       JAIX
                                                COMPANY    SUBSIDIARIES    LEASING    ELIMINATIONS     CONSOLIDATED
Cash flows from (used for)
  operating activities                           $(5.2)           $29.5       $2.4        $     --            $26.7
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
  investing activities:
Capital expenditures                               (0.1)           (8.2)       --               --             (8.3)
Leasing business asset additions                     --              --      (27.6)             --            (27.6)
Proceeds from sale of leased assets                 3.1              --        7.1              --             10.2
Changes in restricted
  cash/other                                         --             0.6         --              --              0.6
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
  investing activities                              3.0            (7.6)     (20.5)              --           (25.1)
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
  financing activities:
Issuance of long-term debt                         82.8              --         --              --             82.8
Payments of term loans and
  capital lease                                   (90.0)           (0.1)        --              --            (90.1)
Net proceeds from JAIX
  Leasing debt                                       --              --       15.6              --             15.6
Intercompany advances                              19.4           (19.4)        --              --               --
Payment of deferred financing
  costs and other                                  (3.0)             --       (0.5)             --             (3.5)
--------------------------------------------------------------------------------------------------------------------
Cash flows from (used for)
  financing  activities                             9.2           (19.5)      15.1              --              4.8
Net increase (decrease) in cash
  and cash equivalents                              7.0             2.4       (3.0)             --              6.4
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
  beginning of year                                18.1             1.4        5.0              --             24.5
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
  end of year                                     $25.1            $3.8       $2.0      $       --             $30.9
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       48
<PAGE>



NOTE 16.  FAIR VALUE OF FINANCIAL INSTRUMENTS


        Based  on  borrowing  rates  currently  available  to  the  Company  for
borrowings  with similar terms and  maturities,  the fair value of the Company's
total debt was  approximately  $207.5  million and $248.5 million as of December
31, 1999 and 1998, respectively.  No quoted market value is available except for
the Notes  which  had a market  value of  approximately  $184  million  and $190
million  as of  December  31,  1999,  and 1998,  respectively.  The  outstanding
interest rate contract, based on current market pricing models, has an estimated
discounted  fair market value ($0.4)  million as of December 31, 1998. All other
financial  instruments  of the  continuing  operations  of the Company have fair
market values which approximate carrying value as of December 31, 1999 and 1998.

NOTE 17.  SUPPLEMENTAL CASH FLOWS

(IN THOUSANDS)
-----------------------------------------------------------------------------
Years Ended December 31,                             1999      1998      1997
Cash paid for:
Interest                                       $   25,578 $  30,038 $  27,906
Income taxes                                       44,722    28,914       952
-----------------------------------------------------------------------------
Business acquisitions:
  Cash paid                                    $   97,187        --        --
  Stock issued                                      2,762        --        --
  Assets received                                 117,863        --        --
-----------------------------------------------------------------------------
  Liabilities assumed                          $   17,914        --        --
-----------------------------------------------------------------------------


NOTE 18.  MAJOR CUSTOMERS

        For the following years certain customers accounted for more than 10% of
the Company's total revenue:

-----------------------------------------------------------------------------
Years Ended December 31,                           1999       1998      1997
Customer A                                          17%        20%       20%
Customer B                                          14         13        12
Customer C                                          13         --        --
-----------------------------------------------------------------------------

        No other customer  accounted for greater than 10% of the Company's total
revenue during these periods.

NOTE 19.  SUBSEQUENT EVENTS (unaudited)

        On January  28,  2000,  the Company  entered  into a  definitive  merger
agreement  providing  for the  acquisition  of the Company by an investor  group
("Investor Group") led by senior members of the Company's management,  including
Thomas M. Begel, its Chairman and Chief Executive Officer, and Andrew M. Weller,
its President and Chief Operating Officer.  Under terms of the merger agreement,
which  was  unanimously  approved  by the  Company's  Board of  Directors  after
receiving the unanimous  recommendation  of a special  committee of  independent
members of the Board,  the Company and  Transportation  Acquisition  I Corp.,  a
company formed by the Investor Group, commenced a joint tender offer to purchase
for $21.50 per share all of the outstanding  shares of common stock.  The tender
offer which  commenced on February 3, 2000 will remain open until March 3, 2000,
unless  extended,  and will be followed by a merger under which those shares not
tendered  will be converted  into the right to receive the same $21.50 per share
in cash. In connection  therewith,  the Company amended its Shareholders  Rights
Plan to allow the acquisition by the Investor Group.

        Concurrently with the joint tender offer for the Company's common stock,
the Company also  commenced  offers to purchase and consent  solicitations  with
respect to both its 11-3/4% Senior  Subordinated  Notes due 2005 and its 11-3/4%
Series C Subordinated Notes due 2005.

                                       49


<PAGE>



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.:

We have audited the accompanying  consolidated  balance sheets of Transportation
Technologies Industries, Inc. (formerly Johnstown America Industries,  Inc.) and
Subsidiaries  as of  December  31, 1999 and 1998,  and the related  consolidated
statements  of income and cash  flows for each of the three  years in the period
ended  December  31,  1999.  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 financial statements are free of material
misstatement.  An audit includes examining on a test basis,  evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of  Transportation
Technologies Industries, Inc. and Subsidiaries as of December 31, 1999 and 1998,
and the results of their  operations  and their cash flows for each of the three
years in the period ended  December  31,  1999,  in  conformity  with  generally
accepted accounting principles.

ARTHUR ANDERSEN LLP
Chicago, Illinois
 January 25, 2000

                                       50


<PAGE>



ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

          None.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        The following table sets forth the name and present principal occupation
or employment, and material occupations,  positions,  offices or employments for
the past five years,  of each  director  and  executive  officer of the Company.
Unless otherwise  indicated,  each such person is a citizen of the United States
and the business address of each such person is c/o Transportation  Technologies
Industries, Inc., 980 N. Michigan Avenue, Suite 1000, Chicago, Illinois 60611.


                                     PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME                          MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
----                          --------------------------------------------------

Thomas M. Begel.................... Chairman  of the Board  and Chief  Executive
                                    Officer. He served as President from October
                                    1991 to January  2000.  He is also  Chairman
                                    of, and a partner in, TMB Industries,  and a
                                    director of Silgan Holdings, Inc.

Andrew M. Weller................... Director, President and Chief Operating
                                    Officer. He is also Executive Vice President
                                    of, and a partner in, TMB Industries, and is
                                    a  director   or  officer  of  certain   TMB
                                    companies.  From  September  1994 to January
                                    2000, he served as Executive  Vice President
                                    and Chief Financial Officer of the
                                    Company,  and from  March  1995 to  November
                                    1995, he served as Secretary of the Company.
                                    From April 1998 to  September  1994,  he was
                                    Vice  President  and  Treasurer of Bethlehem
                                    Steel Corporation.

James D. Cirar .................... President and Chief Executive Officer of
                                    Gunite  Corporation  since  January 2000. He
                                    was    Chairman   of    Johnstown    America
                                    Corporation  and Freight Car Services,  Inc.
                                    from  September 1998 to June 1999 and Senior
                                    Vice President of the Company from July 1997
                                    to June 1999.  From September 1995 to August
                                    1998, he was  President and Chief  Executive
                                    Officer of Johnstown America Corporation and
                                    from  March  1998  to  August  1998  he  was
                                    President  and Chief  Executive  Officer  of
                                    Freight   Car   Services,   Inc.   Prior  to
                                    September  1995, he was the Plant Manager of
                                    the Truck and Bus Assembly  Group of General
                                    Motors Corporation.

Fred D. Culbreath.................. Chairman of Imperial Group, L.P.  He has
                                    held  various  other  titles  with  Imperial
                                    Group,  L.P.  since being one of its primary
                                    founders in 1962.

Joseph A. Hicks.................... Chief Executive Officer of Imperial Group,
                                    L.P.  He served  as  President  of  Imperial
                                    Group,  L.P.  from  January 1995 to November
                                    1997 and, prior thereto, he was President of
                                    Eagle Associates, a private management firm.

Robert L. Jackson.................. President and Chief Executive Officer of
                                    Bostrom  Seating,  Inc.  From August 1996 to
                                    January   2000,   he  was   Executive   Vice
                                    President  of Bostrom  Seating,  Inc.  Prior
                                    thereto,  he  held  various  positions  with
                                    Bethlehem Steel Corporation.

Timothy A. Masek................... Executive Vice President-Sales and Marketing
                                    He   served   as  Vice   President-Corporate
                                    Development  from  December  1995 to January
                                    2000 and President of Bostrom Seating,  Inc.
                                    from  June  1996  to  January  2000.   Prior
                                    thereto,    he   performed   marketing   and
                                    corporate functions for the Company.


                                       51


<PAGE>



John D. McClain.................... President of Brillion Iron Works, Inc.

Donald C. Mueller.................. Vice President and Treasurer.  Prior to July
                                    1998,  he held various  financial  positions
                                    with Fisher Scientific International.

R. Philip Silver................... Director.  In addition, he is currently Co-
                                    Chief Executive  Officer of Silgan Holdings,
                                    Inc.,  and has been  either  Chairman of the
                                    Board or President  and a Director of Silgan
                                    Holdings, Inc. since 1988.

Francis A. Stroble................. Director.  From 1982 to 1994, he was the
                                    Senior Vice  President  and Chief  Financial
                                    Officer of  Monsanto  Company.  He is also a
                                    Director of Mercantile Bancorporation, Inc.

Camillo M. Santomero III........... Director.  He has been a private investor
                                    and a Senior  Consultant  to  Chase  Capital
                                    Partners    (formerly    Chemical    Venture
                                    Partners)  since  January 1992. In addition,
                                    from October 1988 to January  1992, he was a
                                    General Partner of Chase Capital Partners.

Allen L. Sunderland................ President of Fabco Automotive Corporation
                                    since   December   1999.   He  joined  Fabco
                                    Automotive   Corporation  in  1995  as  Vice
                                    President of Sales and Engineering.

Kenneth M. Tallering............... Vice President, General Counsel and
                                    Secretary. Prior to November 1995, he was an
                                    attorney with the law firm of Skadden, Arps,
                                    Slate, Meagher & Flom LLP.

John C. Wilkinson.................. President and Chief Operating Officer of
                                    Imperial Group, L.P. Prior to November 1997,
                                    he was General  Manager of  Imperial  Group,
                                    L.P.

Brent Williams..................... Controller.  He has served in various
                                    financial   capacities  at  TCI  and  Gunite
                                    Corporation for the past five years.

        SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section  16(a)  of the  1934  Act  and  regulations  of  the  Commission
thereunder require the Company's officers and directors and persons who own more
than ten percent of the Company's Common Stock, as well as certain affiliates of
such persons, to file initial reports of ownership and changes in ownership with
the Commission.  Officers, directors and persons owning more than ten percent of
the Company's Common Stock are additionally required to furnish the Company with
copies of all Section  16(a) forms they file.  Based solely on its review of the
copies of such forms  received by it and written  representations  that no other
reports were required for those  persons,  the Company  believes that all filing
requirements  applicable to its officers,  directors and owners of more than ten
percent of the Company's Common Stock have been made as required with respect to
fiscal year 1999.

BOARD; COMMITTEES OF THE COMPANY BOARD; MEETINGS

        Currently, the Board consists of five members. The Board is divided into
three  classes  and each  director  serves a term of three  years  and until his
successor is duly elected and qualified or until his earlier death,  resignation
or removal.

        The Company has a  Compensation  Committee,  an Audit  Committee  and an
Executive Committee.

        The Compensation  Committee,  comprised of Messrs.  Begel and Santomero,
reviews and makes  recommendations to the Board of Directors regarding salaries,
compensation  and  benefits  of  executive  officers  and key  employees  of the
Company, and grants options to purchase shares of Common Stock.

                                       52


<PAGE>



        The Audit Committee,  which is comprised of Messrs.  Silver and Stroble,
reviews the internal and external  financial  reporting of the Company,  reviews
the  scope of the  independent  audit and  considers  comments  by the  auditors
regarding internal controls and accounting procedures, and management's response
to these comments.

        The Executive Committee, which is comprised of Messrs. Begel and Weller,
exercises the powers of the Board of Directors  during  intervals  between Board
meetings and acts as an advisory body to the Board by reviewing  various matters
prior to their submission to the Board.

        During  1999,  the Board of  Directors  met four  times.  Each  director
attended  75% or more of the  meetings.  The  Compensation  Committee  held  one
meeting in 1999, which was attended by both of the committee members.  The Audit
Committee held two meetings in 1999,  each of which were attended by both of the
committee  members.  The Executive  Committee held no meetings  during 1999. The
Board of Directors does not have a Nominating Committee.

ITEM 11.  EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS

        The directors of the Company  receive a retainer of $20,000 per annum in
addition to an attendance fee of $500 for each committee meeting attended, and a
reasonable  expense in connection with each Board or committee meeting attended.
Board  members who are also  employees of the Company do not receive  directors'
fees. In addition,  options to purchase 5,000 shares of Common Stock are granted
to each new  non-employee  director upon such director's  initial  election an d
qualification  for the Board. On the date of each annual meeting of shareholders
subsequent to a director's  initial  election and  qualification  for the Board,
each  continuing  non-employee  director will be granted  additional  options to
purchase 3,000 shares of Common Stock.

SUMMARY OF EXECUTIVE COMPENSATION

         The following table sets forth the cash and non-cash  compensation  for
services in all  capacities  to the  Company for 1999,  1998 and 1997 of (i) the
Chief  Executive  Officer of the Company and (ii) the Company's four most highly
compensated  executive  officers other than the Chief Executive Officer who were
serving as executive officers as of December 31, 1999 (the "Named Officers").

<TABLE>
                                                                                         LONG TERM
                                               ANNUAL COMPENSATION                  COMPENSATION AWARDS
                                       ------------------------------------  -------------------------------------
                              FISCAL                            OTHER ANNUAL  RESTRICTED   OPTIONS/      ALL OTHER
NAME AND PRINCIPAL POSITION    YEAR      SALARY      BONUS(1)  COMPENSATION(2) STOCK($)(3)  SARS(#)(4) COMPENSATION(5)
-----------------------------------------------------------------------------------------------------------------
<S>                             <C>     <C>        <C>            <C>          <C>          <C>         <C>
THOMAS M. BEGEL                 1999    $750,000   $1,250,000     $113,112     $473,844         --      $241,964
 CHAIRMAN OF THE                1998     350,000      750,000           --           --         --       221,004
 BOARD AND CHIEF                1997     300,000      350,000           --           --     25,000       222,066
 EXECUTIVE OFFICER

THOMAS W. COOK                  1999    $350,000     $470,702           --           --         --        $8,621
 FORMER SENIOR VICE             1998     300,000      485,608           --           --         --         8,647
 PRESIDENT AND                  1997     275,016      457,900           --           --     25,000         8,092
 PRESIDENT AND CHIEF
 EXECUTIVE OFFICER OF
 TRUCK COMPONENTS INC.

DONALD C. MUELLER               1999    $160,000     $220,000           --           --     10,000       $17,135
 VICE PRESIDENT AND CHIEF       1998      70,000       70,000           --           --     20,000         2,950
 FINANCIAL OFFICER

KENNETH M. TALLERING            1999    $200,000     $750,000           --     $313,219         --       $16,272
 VICE PRESIDENT,                1998     150,000      200,000           --           --         --        15,861
 GENERAL COUNSEL                1997     125,000       75,000           --           --     10,000        11,386
 AND SECRETARY


                                       53

<PAGE>

ANDREW M. WELLER                1999    $500,000   $1,000,000           --     $473,844         --       $87,257
 PRESIDENT, CHIEF               1998     300,000      500,000           --           --         --        74,032
 OPERATING OFFICER              1997     260,000      350,000           --           --     25,000        58,211
 AND DIRECTOR


--------------
</TABLE>


(1)      In 1999,  includes  bonus of  $500,000  to  Messrs.  Begel,  Weller and
         Tallering and $50,000 to Mr. Mueller following consummation of the sale
         of the Company's  freight car  operations and includes bonus of $20,000
         to Mr. Mueller following relocation of his residence. For Messrs. Begel
         and Cook includes a portion of 1998 bonus voluntarily  deferred by them
         under the  Company's  Deferred  Compensation  Plan and for Mr. Cook and
         includes a portion of 1997 bonus voluntarily  deferred by him under the
         Company's Deferred  Compensation  Plan. The Deferred  Compensation Plan
         was terminated in 1999.

(2)      For the  reimbursement  of travel,  club dues and other expenses to Mr.
         Begel.  The value of the perquisites  received by Mr. Begel in 1997 and
         1998  and by the  other  Named  Officers  in each  year was  below  the
         threshold requiring disclosure thereof.

(3)      On February 1, 1999,  Messrs.  Begel and Weller were issued  29,500
         shares of restricted  common stock and Mr.  Tallering was issued 19,500
         shares of restricted  common stock.  All such restricted stock vests on
         the third  anniversary  of the date of grant,  or  earlier  in  certain
         circumstances such as a change in control. The value of such restricted
         stock for Messrs.  Begel,  Weller and Tallering was $473,844,  $473,844
         and  $313,219,  respectively,  as of  February 1,  1999  and  $532,844,
         $532,844 and $352,219, respectively, as of December 31, 1999.

(4)      The options granted to Messrs. Begel, Cook, Tallering and Weller in
         1997 are vested.  One-third  of the options  granted to Mr.  Mueller in
         1998 are vested.

(5)      1999 includes the following  amounts:  for Mr. Begel,  $235,964 for
         life  insurance and  supplemental  pension  premium and $6,000  Company
         contribution to the Company's  401(k) plan; for Mr. Cook, $621 for life
         insurance premium and $8,000 Company profit sharing  contribution;  for
         Mr.  Mueller,  $11,135  for life  insurance  and  supplemental  pension
         premium and $6,000 Company  contribution to the Company's  401(k) plan;
         for Mr. Tallering,  $10,272 for life insurance and supplemental pension
         premium and $6,000 Company  contribution to the Company's  401(k) plan;
         and for Mr. Weller, $81,257 for life insurance and supplemental pension
         premium and $6,000 Company  contribution to the Company's  401(k) plan.
         1998 includes the following amounts:  for Mr. Begel,  $215,004 for life
         insurance  and   supplemental   pension   premium  and  $6,000  Company
         contribution to the Company's 401(k) plan; for Mr.Cook,  $647 for life
         insurance premium and $8,000 Company profit sharing  contribution;  for
         Mr. Mueller, $150 for life insurance and $2,800 Company contribution to
         the Company's 401(k) Plan; for Mr. Tallering, $9,861 for life insurance
         and supplemental pension premium and $6,000 Company contribution to the
         Company's  401(k) plan; and for Mr.Weller,  $68,032 for life insurance
         and supplemental pension premium and $6,000 Company contribution to the
         Company's  401(k)  plan.  1997  includes  the  following  amounts:  for
         Mr. Begel, $216,066 for life insurance and supplemental pension premium
         and $6,000  Company  contribution  to the  Company's  401(k) plan;  for
         Mr. Cook,  $592 for life  insurance  premium and $7,500  Company profit
         sharing contribution;  for Mr. Tallering, $5,386 for life insurance and
         supplemental  pension  premium and $6,000 Company  contribution  to the
         Company's  401(k) plan; and for Mr. Weller,  $52,211 for life insurance
         and supplemental pension premium and $6,000 Company contribution to the
         Company's  401(k)  plan.  Each  executive's   right  to  receive  their
         respective  supplemental  pensions upon  termination  of employment are
         generally subject to a three-year cliff vesting requirement (other than
         in the event of  termination of employment due to a change in control).
         In  the  event  any  such  person  is  not   entitled  to  receive  his
         supplemental  pension,  the value of such pension funds would revert to
         the Company.


                                             54


<PAGE>



OPTION GRANTS

        During  the 1999  fiscal  year,  options  were not  granted to the Named
Officers,  except that Mr.  Mueller was granted  10,000 options with an exercise
price of $17.50,  which  options  would  have a  potential  realizable  value of
$110,057 based on a 5% appreciation during the option term and $278,905 based on
a 10% appreciation during the option term.

OPTION EXERCISES

        The table  below sets  forth  information  with  respect to the value of
options held by the Named Officers as of December 31, 1999.

           AGGREGATED OPTION EXERCISES IN FISCAL 1999 AND OPTION VALUE
                            AS OF DECEMBER 31, 1999
<TABLE>


                                                                   NUMBER OF                   VALUE OF UNEXERCISED
                                                             UNEXERCISED OPTIONS AT            IN-THE-MONEY OPTIONS
                              SHARES                            FISCAL YEAR-END(#)             AT FISCAL YEAR-END($)
                            ACQUIRED ON       VALUE       -----------------------------    ---------------------------
NAME                         EXERCISE(#)    REALIZED($)    EXERCISABLE    UNEXERCISABLE    EXERCISABLE    UNEXRCISABLE
----                       -------------   ------------   ------------    -------------    -----------    ------------
<S>                              <C>           <C>           <C>              <C>           <C>             <C>
Thomas M. Begel                   --            --           50,000               --        $362,550              --
Thomas W. Cook                    --            --          100,000               --       1,165,625              --
Donald C. Mueller                 --            --            6,667           23,333          30,418         $66,457
Kenneth M. Tallering              --            --           37,500               --         382,964              --
Andrew M. Weller                  --            --          105,000               --         454,363              --

</TABLE>

PENSION PLANS

        The Company,  maintains a tax-qualified  defined benefit pension plan in
which Messrs. Begel, Mueller,  Tallering and Weller are eligible to participate.
Benefits  under  the plan are based  primarily  upon the  participant's  average
monthly  earnings and his years of continuous  service.  Benefits under the plan
are not subject to  reduction  for social  security  benefits but are reduced by
certain other  amounts  received  under certain  public  pension  programs,  and
certain  disability and severance  payments.  The following table sets forth the
benefits  payable  under the plan at age 65 on a straight line annuity basis for
participants with the indicated levels of compensation and service.

                      ESTIMATED ANNUAL RETIREMENT BENEFITS

                                                  Years of Continuous Service
----------------- ------------------------------------------------------------
AVERAGE EARNINGS     15        20         25        30         35         40
                  --------  ---------  --------  ---------  ---------  --------
$ 75,000          $15,390    $20,520    $25,650   $30,780    $35,910    $41,816
 100,000           21,296     28,395     35,494    42,592     49,691     57,566
 125,000           27,202     36,270     45,337    54,405     63,472     73,316
 150,000           33,109     44,145     55,181    66,217     77,254     89,066
 200,000           35,471     47,295     59,119    70,942     82,766     95,366
 250,000           35,471     47,295     59,119    70,942     82,766     95,366
 300,000           35,471     47,295     59,119    70,942     82,766     95,366


                                       55

<PAGE>
     The compensation and years of service under the plan for Messers. Begel,
Mueller, Tallering and Weller are as follows:


                                       HIGHEST FIVE-YEAR
                                        AVERAGE ANNUAL
                                         COMPENSATION          YEARS OF SERVICE
                                      -------------------      ----------------
Thomas M. Begel                            $720,000                   6.25
Donald C. Mueller                           185,000                   1.50
Kenneth M. Tallering                        345,000                   4.16
Andrew M. Weller                            479,400                   5.33


        Mr. Cook was eligible to participate in a tax-qualified  defined benefit
plan formerly  maintained by a subsidiary of Truck  Components Inc. ("TCI") (the
"Pension  Plan").  The  Pension  Plan  provided  a  pension  benefit  at  normal
retirement age of 65, based on average monthly pay through December 31, 1991, or
if service is less than five years,  the average  monthly  earnings of the years
worked up to December  31, 1991,  and credited  service for the years and months
employed by TCI and its subsidiaries up to August 31, 1995. The salary component
for persons hired subsequent to December 31, 1991, was the participant's initial
monthly  salary at  employment  date.  At age 65,  based on Mr.  Cook's  covered
compensation  and years of service of $150,000 and 4.6 years,  respectively,  he
would  have been  entitled  to receive  an annual  pension  of $9,080  under the
Pension Plan.  The Pension Plan was  terminated  during 1998 and Mr. Cook rolled
his allocated pension proceeds into an individual  retirement account.  Mr. Cook
also participates in the Gunite  Corporation  Salaried  Employees Profit Sharing
Plan  pursuant  to  which  Gunite  Corporation,  a  subsidiary  of the  Company,
contributes  5% of Mr.  Cook's gross  earnings up to a maximum  contribution  of
$8,000.

EMPLOYMENT AND SEVERANCE AGREEMENTS

        The Company is a party to substantially  identical  employment contracts
with Messrs. Begel, Mueller, Tallering and Weller which became effective on July
1, 1999 and continue for a rolling  three-year period (a rolling two-year period
for Mr.  Mueller)  unless  terminated as provided in the agreement.  Pursuant to
their  respective  agreements,  each will  receive  annual base  salaries,  plus
bonuses  as  determined  by the  Board of  Directors.  Each of these  agreements
contains  customary  employment  terms and  provides  that upon  termination  of
employment  by the Company  other than for "Cause" or by the  employee for "Good
Reason" (each as defined in the  agreements)  during the term,  the Company will
pay a severance payment to the employee, in addition to other benefits, equal to
three  times  (two times for Mr.  Mueller)  the sum of (i) the  employee's  base
salary as of his date of termination and (ii) the greatest of (w) the employee's
guaranteed bonus, if any, for the year during which the termination  occurs, (x)
the employee's  target bonus,  if any, for the year during which the termination
occurs,  (y) the employee's  bonus received with respect to the year immediately
preceding the date of termination and (z) the employee's  average bonus received
during the three  years  immediately  preceding  the date of  termination,  plus
certain additional amounts.

         The Company is a party to an employment  agreement with James D. Cirar,
the President and Chief Executive  Officer of Gunite,  which agreement will only
become  effective upon  completion of the  acquisition  previously  described in
"Recent Event." The agreement is identical to the agreements described above for
Messrs.  Begel,  Tallering,  and Weller except that Mr. Cirar's bonus will be an
amount  equal to one percent of Gunite's  earnings  before  interest,  taxes and
amortization.

        In connection with the Company's  acquisition of TCI in August 1995, the
Company assumed the existing employment agreement between TCI and Mr. Cook. Such
agreement  was  terminated  as of January 11, 2000 upon Mr.  Cook's  retirement.
Pursuant to the  termination,  Mr. Cook will receive one year's  salary,  plus a
bonus equal to Mr. Cook's average bonus for 1998 and 1999.

        The  Company  is a party to  employment  contracts  with  certain  other
officers and key employees generally with two or three year terms.

COMPENSATION COMMITTEE REPORT

        Under the  supervision  of the  Compensation  Committee  of the Board of
Directors (the "Committee"),  the Company has attempted to develop and implement
compensation   policies,   plans  and   programs   which  seek  to  enhance  the
profitability  of the  Company  and to  maximize  shareholder  value by  closely
aligning the financial interests of the

                                       56


<PAGE>



Company's  executive  officers with those of its shareholders.  The Committee is
currently comprised of Messrs. Begel and Santomero.

        The Company's general  compensation  philosophy,  which is determined by
the Committee,  is to offer  compensation so as to enable the Company to attract
and retain  talented and experienced  executive  officers who are able to assist
the Company in  accomplishing  its strategic and performance  goals and to allow
such  executive  officers to participate in the increase in value of the Company
upon   attaining   such   goals.   Such   compensation   consists   of   salary,
performance-based bonus and stock  options/restricted  stock. In determining the
salary,  bonus  and  stock  option/restricted  stock  awards  for the  Company's
executive officers,  the Committee takes into account the overall performance of
the Company as well as its subjective  determination of the contribution of each
executive  officer  to that  performance.  The  Committee  does  not  limit  its
evaluation of Company  performance to any particular  performance  measure,  nor
does it apply any specific  formula in relating  Company  performance to salary,
bonus or stock option/restricted stock award levels.

        Four of the five Named  Officers  are parties to  employment  agreements
with the Company, which are described herein in the section entitled "Employment
and Severance  Agreements." The Committee believes that the compensation offered
pursuant  to such  agreements  is  consistent  with the  Company's  compensation
philosophy.  In 1999,  Mr.  Begel's salary was $750,000 and, given the Company's
significant  improvement in results of operations and financial condition during
1999,  received a $750,000  bonus for 1999. He also received a bonus of $500,000
following  completion  of the  successful  sale  of the  Company's  freight  car
operations.  Mr.  Begel's  economic  interests  are  further  aligned  with  the
shareholders  of the Company due to his  significant  ownership  interest in the
Company (see "Principal Shareholders and Security Ownership of Management").

        The Committee  has not developed a formal policy on the rules  regarding
deductability of executive  compensation  because the Company's  compensation of
its executive officers is considerably less than the applicable thresholds,  but
rather will make such determinations as appropriate.

                                       57


<PAGE>



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        SECURITY OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS,
                 DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

        The following  table sets forth  information,  based on reports filed by
such  persons  with the  Commission,  with respect to ownership of the shares of
Common Stock held by the directors and  executive  officers of the Company,  and
with  respect  to  ownership  by  persons  believed  by  the  Company  to be the
beneficial owners of more than 5% of its outstanding Common Stock.

<TABLE>

                                                                                  PERCENT OF
                                                           NUMBER OF SHARES OF    OUTSTANDING
                                                             COMMON STOCK        COMMON STOCK
                                                           -------------------   ------------
<S>                                                                  <C>             <C>
State Street Research & Management Company (1)...........            723,000         7.0%
Dimensional Fund Advisors Inc. (2).......................            677,700         6.6%
Thomas M. Begel (3)......................................            404,402         3.9%
James D. Cirar (4).......................................            135,398         1.3%
Fred D. Culbreath........................................            106,756          *
Joseph A. Hicks..........................................             49,984          *
Robert L. Jackson (5)....................................             15,105          *
Timothy A. Masek (6).....................................             43,428          *
John D. McClain..........................................                  0          --
Donald C. Mueller (7)....................................              7,142          *
Camillo M. Santomero III (8).............................            173,000         1.7%
R. Philip Silver (9).....................................             20,000          *
Francis A. Stroble (9)...................................             22,000          *
Kenneth M. Tallering (10)................................             62,096          *
Andrew M. Weller (11)....................................            151,933         1.5%
John C. Wilkinson (12)...................................             30,000          *
Brent Williams (13)......................................              7,500          *
Directors and Executive Officers as a group (15 persons)(14)       1,228,744        11.9%

</TABLE>

----------
* Less than 1%.

(1)      The number of shares  beneficially  held by State  Street  Research and
         Management  Company is based upon the Schedule 13G held by State Street
         Research and Management  Company dated February 1, 2000. The address of
         State Street Research  Management Company is One Financial Center, 30th
         Floor, Boston, MA 02111-2690.


(2)      The number of shares  beneficially  held by  Dimensional  Fund Advisors
         Inc. is based upon the Schedule 13G filed by Dimensional  Fund Advisors
         Inc. on  February 12,  1999. The address of  Dimensional  Fund Advisors
         Inc. is 12999 Ocean Avenue, Santa Monica, CA 90401.

(3)      Includes 50,000 shares of common stock subject to currently exercisable
         options, 3,390 shares of common stock held through the Company's 401(k)
         plan as of  December 31,  1999 and 29,500 shares of  restricted  common
         stock.

(4)      Includes   100,000   shares  of  common  stock   subject  to  currently
         exercisable  options  and  13,398  shares  of  common  stock  held in a
         self-directed IRA.

(5)      Includes 13,333 shares of common stock subject to currently exercisable
         options and 1,772  shares of common  stock held  through the  Company's
         401(k) plan as of December 31, 1999.


                                       58


<PAGE>

(6)      Includes 18,800 shares of common stock subject to currently exercisable
         options, 2,228 shares of common stock held through the Company's 401(k)
         plan as of  December 31,  1999 and 19,500 shares of  restricted  common
         stock.


(7)      Includes 6,667 shares of common stock subject to currently  exercisable
         options  and 475 shares of common  stock  held  through  the  Company's
         401(k) plan as of December 31, 1999.

(8)      Mr.  Santomero  is a private  investor and Senior  Consultant  to Chase
         Capital   Partners   (formerly   Chemical  Venture   Partners),   which
         beneficially owns shares of common stock, but  Mr. Santomero  disclaims
         beneficial  ownership of such shares.  Mr. Santomero,  however,  has an
         interest in a pool of securities,  including  shares of common stock of
         the Company,  acquired by Chemical Equity Associates at the time he was
         a General  Partner of  Chemical  Venture  Partners  (now Chase  Capital
         Partners).  Mr. Santomero  holds  options to purchase  23,000 shares of
         common stock, of which 20,000 are currently exercisable.

(9)      Messrs.  Silver and Stroble each hold options to purchase 23,000 shares
         of common stock, of which 20,000 are currently exercisable.

(10)     Includes 37,500 shares of common stock subject to currently exercisable
         options, 3,796 shares of common stock held through the Company's 401(k)
         plan as of  December 1,  1999 and 19,500 shares of  restricted  common
         stock.

(11)     Includes   105,000   shares  of  common  stock   subject  to  currently
         exercisable  options,  3,433  shares of common  stock held  through the
         Company's  401(k)  plan as of  December 31,  1999 and 29,500  shares of
         restricted common stock.

(12)     Includes 30,000 shares of restricted common stock.

(13)     Includes 7,500 shares of common stock subject to currently  exercisable
         options.

(14)     Includes   398,800   shares  of  common  stock   subject  to  currently
         exercisable  options,  15,694  shares of common  stock held through the
         Company's  401(k) plan as of  December 31,  1999 and 128,000  shares of
         restricted common stock.




ITEM 13.  CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS

SALE OF FREIGHT CAR OPERATIONS

         On June 3, 1999,  the  Company  completed  the sale of its  freight car
operations,  which were comprised of three wholly owned  subsidiaries- JAC, FCS,
and JAIX- to Rabbit  Hill  Holdings,  Inc.  The Company  received  consideration
consisting  of  approximately  $101.3  million  in cash,  contingent  additional
consideration  of $20.0  million  and a 20% equity  interest  in the  buyer.  In
addition,  the buyer assumed substantially all of the liabilities of the freight
car operations,  including $14.4 million of debt. The 20% equity interest in the
buyer is comprised of common and preferred  stock,  some of which is non-voting.
Further,  the Company's rights with respect to voting and the transferability of
our equity interest are limited and, in particular,  the Company granted a proxy
to vote its equity  interest to another  shareholder  of the buyer under certain
circumstances.


                                       59


<PAGE>



PART IV

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

(A)(1)AND(A)(2)  LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES.
--------------------------------------------------------------------------------

The following documents are included in Item 8 hereto.

Consolidated Balance Sheets as of December 31, 1999 and 1998.

Consolidated Statements of Income for the Years Ended
  December 31, 1999, 1998 and 1997.
Consolidated Statements of Cash Flows for the Years Ended
  December 31, 1999, 1998 and 1997.
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants.


(A)(3)            LIST OF EXHIBITS:
                  ----------------

         3.1      Form of Restated  Certificate of  Incorporation of the Company
                  (incorporated  by  reference  to  Exhibit  3.3  to  Form  S-1,
                  Registration Statement 33-63132 (the "Initial S-1")).
         3.2      Form of Restated  By-laws of the Company  (incorporated by
                  reference to Exhibit 3.4 to the Initial S-1).
         4.1      Form of certificate for the Company's  common stock, par value
                  $.01 per share  (incorporated  by  reference to Exhibit 4.1 to
                  the Initial S-1).
         4.2      Form of  certificate  for the Company's  Class B common stock,
                  par value $.01 per share (incorporated by reference to Exhibit
                  4.2 to the Initial S-1).
         4.3      Indenture relating to the 11.75% Senior  Subordinated Notes of
                  the Company due 2005,  dated as of August 23, 1995,  including
                  form of note  (incorporated by reference to Exhibit 4.1 to the
                  Company's Current Report on Form 8-K dated August 30, 1995).
         4.4      Indenture  relating to the 11.75% Series C Subordinated  Notes
                  of  the  Company  due  2005,  dated  as of  August  11,  1997,
                  including form of note  (incorporated  by reference to Exhibit
                  4.2 to Form S-4,  Registration  Statement 333-35277 (the "Form
                  S-4")).
         4.5      Rights  Agreement,  dated as of October 4, 1995,  between  the
                  Company and BancBoston  State Street Investor  Services,  L.P.
                  (incorporated  by  reference  to  Exhibit  1 to the  Company's
                  Registration  Statement on Form 8-A dated  October 5, 1995 and
                  Amendment to Rights Agreement, dated as of January 28, 2000).
         10.1     Agreement and Plan of Merger, dated as of June 13, 1995, among
                  the Company,  JTN Acquisition  Corp. and Truck Components Inc.
                  (incorporated  by  reference  to Exhibit 2.1 to the  Company's
                  Current Report on Form 8-K dated June 13, 1995).
         10.2     Stockholders  Agreement,  dated as of June 13, 1995, among the
                  Company,  JTN  Acquisition  Corp. and the  stockholders  party
                  thereto  (incorporated  by  reference  to  Exhibit  2.2 to the
                  Company's Current Report on Form 8-K dated June 13, 1995), and
                  Amendment No.1 to Stockholders Agreement, dated as of June 23,
                  1995,  among  the  Company,  JTN  Acquisition  Corp.,  and the
                  stockholders  party  thereto  (incorporated  by  reference  to
                  Exhibit 2.3 to Amendment No.1 to the Company's  Current Report
                  on Form 8-K dated June 13, 1995).
         10.3     Stock Purchase  Agreement,  dated as of December 21, 1994, and
                  the First  Amendment  thereto,  dated as of January 13,  1995,
                  each among the sellers, Bostrom Seating, Inc. and the Company,
                  (incorporated  by  reference  to  Exhibit  2 to the  Company's
                  Current Report on Form 8-K dated January 24, 1995).
         10.4     Credit  Agreement,  dated  as of April  29,  1999,  among  the
                  Company,  the financial  institutions named therein, The Chase
                  Manhattan Bank, as Administrative Agent,  Collateral Agent and
                  Swingline  Lender,  The Chase Manhattan Bank, as Issuing Bank,
                  and Bank Boston,  N.A.and The First  National Bank of Chicago,
                  as Co-Agents (incorporated by reference to Exhibit 10.4 to the
                  Company's  Form 10-Q for the quarter ended March 31, 1999 (the
                  "March 31, 1999 10-Q")).
         10.5     Bond  Guaranty  Agreement,  dated  April 1,  1999,  by Bostrom
                  Seating,  Inc. and Lease Agreement dated April 1, 1999 between
                  Bostrom Seating,  Inc. and the Industrial  Development Bond of
                  the City of Piedmont,  relating to $3.1 million of  industrial
                  revenue  bonds  (incorporated  by reference to Exhibit 10.5 to
                  the March 31, 1999 10-Q).



                                     60

<PAGE>

         10.6     Asset Purchase  Agreement,  dated as of March 22, 1999,  among
                  the  Company,  Imperial  Group  Acquisition,   L.P.,  Imperial
                  Fabricating  Company of Tennessee,  Inc., Fleet Design,  Inc.,
                  Imperial  Group,  Inc.,  Fred D. Culbreath and Joseph A. Hicks
                  (incorporated  by  reference  to Exhibit 10.1 to the March 31,
                  1999 10-Q).
         10.7     Asset Purchase  Agreement,  dated as of April 30, 1999,  among
                  Gunite Corporation,  Gunite Acquisition Corp.,  Hitachi Metals
                  America,  Ltd. and Ward Manufacturing,  Inc.  (incorporated by
                  reference to Exhibit 10.2 to the March 31, 1999 10-Q).
         10.8     Share Purchase  Agreement,  dated as of May 10, 1999,  between
                  the Company and Rabbit Hill Holdings,  Inc.  (incorporated  by
                  reference to Exhibit 99.2 of the Company's  Current  Report on
                  Form 8-K dated May 12, 1999).
         10.9     Merger  Agreement,  dated as of January 28, 2000,  between the
                  company and Transportation  Acquisition I Corp.  (incorporated
                  by  reference  to Exhibit  (e) (1) to the  Company's  Schedule
                  14D-9 dated February 3, 2000).
         10.10    1993 Stock Option Plan  (incorporated  by reference to Exhibit
                  10.8 to the Initial S-1).
         10.11    Johnstown   America   Corporation    Salaried   Pension   Plan
                  (incorporated  by  reference  to Exhibit  10.11 to the Initial
                  S-1).
         10.12    Amended and Restated  Stockholder and Warrant holder Agreement
                  (incorporated  by  reference  to Exhibit  10.14 to the Initial
                  S-1).
         10.13    Employment  Agreement  of Thomas M. Begel,  Andrew M.  Weller,
                  Timothy A. Masek,  Donald C. Mueller and Kenneth M.  Tallering
                  (incorporated  by reference  to Exhibit 99.1 to the  Company's
                  Form 10-Q for the quarter ended June 30, 1999).
         10.14    Employment Agreement of James D. Cirar.
         10.15    Form of  Severance  Agreement  (incorporated  by  reference to
                  Exhibit 10.15 to the 1995 Form 10-K).
         10.16    Form of Stay Bonus  Agreement  (incorporated  by  reference to
                  Exhibit 10.16 to the 1995 Form 10-K).
         10.17    Form of Stock Option  Agreement  (incorporated by reference to
                  Exhibit 10.17 to the 1995 Form 10-K).
         10.18    Form of Supplemental Life Insurance Agreement (incorporated by
                  reference to Exhibit 10.21 to the 1996 Form 10-K).
         10.19    Gunite   Corporation   Salaried   Employees   Retirement  Plan
                  (incorporated  by reference to Exhibit  10.18 to the 1995 Form
                  10-K).
         10.20    Gunite   Corporation  Profit  Sharing  Plan  (incorporated  by
                  reference to Exhibit 10.19 to the 1995 Form 10-K).
         10.21   Form of Restricted Stock Agreement  (incorporated by reference
                  to Exhibit  10.22 to the  Company's  10-K for the fiscal  year
                  ended December 31, 1998).
         21.1     Subsidiaries of the Company
         23.1     Consent of Arthur Andersen LLP
         27.1     Financial Data Schedule



(2)      Financial Statement Schedules:

         All  schedules  have been  omitted  since the required  information  is
         either  not  significant,   included  in  the  consolidated   financial
         statements of the Company or the notes thereto or not applicable.

(3)      Reports on Form 8-K

         The Company filed the following current report on Form 8-K:

                  None





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<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned thereunto duly authorized .

                  TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.


                   BY:/S/ DONALD C. MUELLER
                      -------------------------------
                      Donald C. Mueller
                         Vice President, Treasurer and Chief Financial Officer
                          (Principal Financial Officer and
                           Principal Accounting Officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.
<TABLE>


SIGNATURE                           TITLE                                       DATE
<S>                               <C>                                           <C>
/S/ THOMAS M. BEGEL
---------------------------       Chairman of the Board                         February 17, 2000
Thomas M. Begel                    and Chief Executive Officer
                                   (Principal Executive Officer)

/S/ ANDREW M. WELLER               President, Chief Operating Officer           February 17, 2000
---------------------------          and Director
Andrew M. Weller

/S/ CAMILLO SANTOMERO               Director                                    February 17, 2000
---------------------------
Camillo Santomero

/S/ R. PHILIP SILVER                Director                                    February 17, 2000
---------------------------
R. Philip Silver

/S/ FRANCIS S. STROBLE              Director                                    February 17, 2000
---------------------------
Francis S. Stroble

</TABLE>

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