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, 1998
                           COMMISSION FILE NO. 0-21830

                       JOHNSTOWN AMERICA 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, Illinois 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 checkmark 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 III 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 be 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.)

                  $150,550,064                as of March 17, 1999.

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 MARCH 17, 1999
                  -----                       -----------------------------

       Common Stock, $.01 par value                      10,025,754

Portions of the following  documents are  incorporated  by reference in Parts II
and III of this Report:  (1) Registrant's  Annual Report to Shareholders for the
fiscal  year ended  December  31,  1998 (Part II);  and (2)  Registrant's  Proxy
Statement for the Annual Meeting of Shareholders to be held on May 6, 1999 (Part
III).

                                       1
<PAGE>

                                     PART I


ITEM 1.  BUSINESS

                                   THE COMPANY

         Johnstown  America  Industries,  Inc. (the "Company") has two operating
segments  within  the  transportation  industry:  truck  components,  a  leading
manufacturer of wheel-end components,  seating, 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.  For a definition of certain terms used in this Form 10-K, see
"Glossary of Certain Terms" at the end of this Item.

TRUCK COMPONENTS SEGMENT

         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 heavy-duty truck industry. Certain wheel-end components are used
for  anti-lock  braking  systems  ("ABS"),  which have been mandated for all new
trucks  since March 1997 and all new trailers  since March 1998.  In addition to
serving OEMs, Gunite has significant sales to the less cyclical 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 customers in a wide range of industries,  including
the  heavy-duty  truck,   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. Generally, once
a foundry begins  production of a product,  it will continue to manufacture  the
item for the product's life cycle.  Brillion also  manufactures and sells a line
of farm equipment products.

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

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

FREIGHT CAR SEGMENT

         Johnstown America  Corporation  ("JAC") and Freight Car Services,  Inc.
("FCS") are leading  manufacturers of railroad freight cars used principally for
hauling coal,  intermodal containers (which are used on trucks and ships as well
as on freight cars),  highway  trailers,  automobiles,  agricultural  and mining
products.  They are  recognized  for  their  expertise  in the  development  and
manufacture   of  aluminum   freight  cars  that   increase  load  capacity  and
consequently  reduce  carrier  costs.  As  part  of  its  full-service  business
strategy, the Company through JAIX Leasing Company ("JAIX Leasing"),  offers its
customers freight car rebuilding services and freight car leasing alternatives.

CORPORATE HISTORY OF THE COMPANY

          An investor group led by Thomas M. Begel, the Chairman,  President 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 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.

                                       2
<PAGE>


         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.

         In January  1995,  the  Company  through  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.

RECENT EVENT

         The Company announced on March 23, 1999 that it has signed a definitive
agreement  to  acquire  Imperial  Group,  Inc.  ("Imperial"),  headquartered  in
Portland,  Tennessee,  a leading Tier I and Tier II supplier of body and chassis
components  for  heavy-duty  Class  8  truck   manufacturers   and  transit  bus
manufacturers.  Imperial  fabricates a broad line of nearly  5,500  high-quality
metal  products,  ranging from bumpers to fenders to fuel tanks.  Imperial  also
provides a variety of value-added services such as chrome plating, polishing and
assembly  of parts and  chassis.  Revenues in 1998 were over $80 million and are
expected to exceed $100 million in 1999.  Production  facilities  are located in
Tennessee,  Texas and Washington, in close proximity to customers' manufacturing
operations.  Terms of the  agreement  were not  disclosed.  The  transaction  is
expected to close in late April 1999.

TRUCK COMPONENTS SEGMENT

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,  Freightliner,
PACCAR,  Volvo and Mack trucks.  For the twelve months ended  December 31, 1998,
approximately 73% of Gunite's total net sales were to OEMs and the remainder was
to the aftermarket.

                                       3
<PAGE>
         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. 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 the OEMs 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  part  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,  Freightliner,
PACCAR, and Mack 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 and the fact that Gunite's
products  are offered as  standard  on more trucks than any of its  competitors'
products.  Gunite's sales to the aftermarket  decreased  slightly in 1998 due to
very high OEM demand. Gunite's strategy is to increase sales to the aftermarket,
where margins are higher when compared to the OEM market, by capitalizing on its
reputation  as a  quality  leader in the  industry  and  continuing  to focus on
customer service.

         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.

         Gunite  offers a full line of brake drums and rotors for Class 6, 7 and
8 trucks and trailers.  The aftermarket  opportunities  in this product line are
substantial as all brake drums wear with use and eventually need to be replaced.
The timing of such replacement depends on the severity of service.

         Gunite manufactures a full line of spoke wheels and disc wheel hubs for
Class 6, 7 and 8 trucks and trailers.  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.

                                       4
<PAGE>

         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.  Gunite  believes it
is presently  the third  largest  supplier of automatic  slack  adjusters to the
heavy-duty trucking industry.

         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  established  close  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 1998
represented approximately 63% of Gunite's total net sales in 1998, with sales to
Navistar accounting for approximately 30% of Gunite's total net sales in 1998.

         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 foundry and from Brillion and
machining  capabilities  at  its  Elkhart,  Indiana  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 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.

                                       5
<PAGE>

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 34% of
Brillion's sales (including sales to Gunite) in 1998.

         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  12% of
Brillion's sales in 1998.

         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  1998,
ductile iron castings  represented  approximately  64% 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  manufacture  of components  for the
trucking,  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 Caps                    *  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

                                       6
<PAGE>

 *  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 1998  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  33% of Brillion's 1998 total net sales.
Brillion also serves as an important  source of castings for Gunite,  with sales
to Gunite representing  approximately 15% of Brillion's total net sales in 1998.
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
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
(which has been internally  recycled),  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.

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.

         MARKETS

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

                                       7
<PAGE>

        CUSTOMERS

         Bostrom's  customers include all of the major North American heavy-duty
truck  manufacturers.  Bostrom's top five customers  accounted for approximately
83% of Bostrom's 1998 net sales, with Freightliner  accounting for approximately
39% 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.   It  supplies
replacement  parts for all of its products to OEMs and, in some cases,  directly
to end users.  Service parts are shipped directly from Fabco's plant in Oakland,
California to any domestic or international  location  directed by the customer.
Fabco's quick turnaround of parts orders minimizes the need for its customers to
maintain their own parts inventory.

         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 1998 to Fabco's five largest customers accounted for
approximately  74% of Fabco's  total net sales,  with  Navistar  accounting  for
approximately 50% of such sales.

                                       8
<PAGE>

         MANUFACTURING

         Fabco has gained a strong  reputation for its engineering  capabilities
in  designing  and  manufacturing  its  products for the on/off road medium- and
heavy-duty truck and specialty vehicle markets.  The Company believes that Fabco
is the only manufacturer which has products that are standard or available as an
option on all major OEMs Class 6, 7 and 8 all-wheel  drive truck models produced
for the commercial truck market,  and that, as a result,  Fabco's broad range of
adaptable  products are considered  the industry  standard due to the variety of
their   configurations  and  tolerances.   Fabco  believes  that  the  technical
backgrounds  of its sales and marketing  employees  contribute to the successful
marketing of Fabco's products to the heavy-duty vehicle manufacturers.

FREIGHT CAR SEGMENT

         The Company is a leading  manufacturer  of railroad  freight  cars used
principally for hauling coal,  intermodal  containers  (which are used on trucks
and  ships  as  well  as  on  freight  cars),  highway  trailers,   automobiles,
agricultural and mining products. As part of its full-service business strategy,
the Company offers its customers freight car rebuilding services and freight car
leasing alternatives.

         PRODUCTS AND SERVICES

         The Company  participates in the following freight car market segments:
new car  manufacturing;  rebuild services;  sales of freight car kits and parts;
and freight car leasing.

         NEW CAR  MANUFACTURING.  The Company's  freight car operations  offer a
range of car types in an effort to take advantage of industry  trends and market
opportunities,  particularly in the development of aluminum freight cars used in
the  shipment  of  bulk  commodities.   The  Company's  freight  car  operations
manufacture the following types of freight cars:

                  GONDOLAS. The BethGon Coalporter(R) is a patented twin tub car
designed for the coal and utility industries.  The BethGon was designed to carry
more coal with  greater  stability  and  remains  the  dominant  type of car for
hauling coal,  particularly for hauling  low-sulfur coal from the western United
States.  Although the BethGon can be made in either  steel or aluminum,  most of
the  BethGons  delivered  in the last few years have been made of  aluminum.  In
1994, a new  smooth-sided  Aeroflo  Aluminum BethGon was introduced which offers
carriers  both fuel  savings  and added  cubic  carrying  capacity.  Since 1996,
several design  variations  have been developed to offer  customers  options for
their specific  needs. In 1998, 54% of the new cars  manufactured  were BethGons
vs. 61% in 1997.

                  OPEN HOPPERS. To expand its product line to service the entire
coal market, the Company's freight car operations began  manufacturing  aluminum
open  top  hoppers  in 1994.  The  Company's  freight  car  operations  have the
capability  to produce  both  aluminum  and steel open top  hoppers  and in 1996
developed and introduced an aluminum  rapid  discharge coal model (the AutoFlood
II(TM)) that  provides 18 tons more  capacity per load than  conventional  steel
automatic  discharge  cars.  The aluminum  AutoFlood  II(TM) coal car,  with its
patented  automatic  discharge  system providing a more efficient method for the
rapid  discharge  of coal,  has  been  well  received  in the  marketplace.  The
Company's freight car operations have been manufacturing an increasing  quantity
of open top hopper  cars and  believes  that demand for such cars will result in
cars  representing a larger share of its product mix in the future. In 1998, 24%
of the new cars manufactured were open top hopper cars vs. 35% in 1997.

                  COVERED HOPPERS.  Covered hopper cars are constructed of steel
or aluminum and are used to haul agricultural, chemical and mineral products. In
1994, the Company's freight car operations  introduced the Grainporter 2000(TM),
the first aluminum covered hopper car in its size range available in high volume
production,  that is designed primarily for high volume transportation of grain.
The  Company's  freight  car  operations'  first  commercial  production  of the
Grainporter 2000(TM) began in 1995.


                                       9
<PAGE>

                  FLAT  CARS.  Flat  cars,  equipped  with  racks,  are  used to
transport  automobiles  and other light vehicles.  A significant  number of flat
cars were  delivered by JAC in 1998 (19% of new cars  manufactured  in 1998) and
JAC expects to deliver a significant number of flat cars in 1999.

                  INTERMODAL CARS. Intermodal cars are primarily used for moving
intermodal  containers  and trailers.  As a result of a substantial  build-up of
intermodal  cars in the early  1990s,  the  market  for  intermodal  cars  began
declining in 1995 and continued to decline through mid-1997.  As a result, there
were a very limited number of intermodal cars delivered in 1996 and 1997. Orders
for intermodal cars began to increase in 1998 but not for the car types produced
by JAC.

                  SPECIALTY   CARS.   The  Company's   freight  car   operations
manufacture  other  cars for the  special  needs  of a  particular  industry  or
customer,  including a mill  gondola car,  which is used to haul scrap,  an open
hopper  or  gondola  wood chip car,  which is used to haul wood  chips,  a waste
hauling car, which is used to haul contaminated  industrial  sludge,  and an ore
car, which is used by railroads to transport taconite pellets and iron ore.

         REBUILD  SERVICES.  Freight cars are typically rebuilt once after 15 to
20 years in use in order to  extend  their  life.  To  pursue  what the  Company
believes to be growing opportunities to service the aging North American freight
car fleet, the Company offers rebuild services.

         CAR KITS AND PARTS.  JAC sells kits  containing the parts  necessary to
build (or rebuild) a particular car to rebuilders and others,  such as railroads
with car building but not design,  engineering  and fabrication  capability.  In
1998, a significant  number of covered  hopper car kits were delivered to Brazil
for final assembly and delivery to a large Brazilian railroad.  JAC also markets
a  variety  of  fabricated  parts  to  freight  car  rebuilders  who do not have
fabrication capabilities.

         LEASING.  To meet the needs of its customers,  the Company  entered the
freight car leasing business in 1994. Through JAIX Leasing, the Company provides
operating  lease  alternatives  to  customers  on new and  rebuilt  cars.  As of
December 31,  1998,  the Company  owned 1,041  railcars in its  operating  lease
fleet,  representing a total  investment of  approximately  $19.5 million,  $9.2
million of which was provided through limited-recourse borrowings.

         MANUFACTURING

         JAC's  manufacturing  operations  are conducted  primarily  through two
facilities located in Johnstown,  Pennsylvania and FCS' manufacturing operations
are conducted at its Danville, Illinois facility.

         CUSTOMERS

         The  Company  has  maintained   long-term   relationships   with  major
purchasers of freight cars.  Long-term  customers are particularly  important in
the  freight  car  industry  given the  limited  number of buyers and sellers of
freight cars.  Such customers  include  railroads,  utilities,  grain  shippers,
leasing companies and major construction and industrial companies.

         The large  average  size of orders  often  results in a small number of
customers  representing  a  significant  portion of the  Company's  freight  car
operation's  revenues in a given year. In 1998, the top five customers accounted
for approximately 48% of the Company's revenues from its freight car operations,
with TTX Company representing approximately 18% of the freight car segments 1998
revenues.

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-duty  truck market,  and the degree of  competition  varies
with  different  products.  In this market the Company  competes on the basis of
price,  its  manufacturing  and  distribution  capabilities and product quality.
Gunite's  primary  competitors in the wheel end component  market for Class 6, 7
and 8 trucks  and  trailers  are  Dayton  Walther  Corporation  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.  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.)

                                       10
<PAGE>

         Competition in the freight car manufacturing  business is based on type
of product,  reputation for quality, price, reliability of delivery and customer
service and support. The Company's freight car operation's principal competitors
in  this  segment  are  Trinity  Industries,   Inc.   ("Trinity"),   Thrall  Car
Manufacturing  Co. and Gunderson Inc. Although there are presently seven freight
car manufacturers in North America,  two of the seven manufacture only tank cars
and plastic pellet cars, market segments in which the Company does not currently
participate.  Only Trinity  competes in all of the Company's  freight car market
segments. Although Trinity is prohibited from marketing,  manufacturing,  using,
selling or leasing  its  infringing  Aluminator  II coal  gondola  freight  car,
Trinity has competed, and JAC expects that it will continue to compete, with JAC
in the sale of coal gondolas.

         BACKLOG

         As of December 31, 1998,  freight car  operations had a backlog of firm
orders for 9,462 new and rebuilt  freight cars with an aggregate  sales price of
approximately  $530.4 million, as compared to a backlog of firm orders for 4,201
new and rebuilt freight cars with an aggregate sales price of approximately $220
million as of December 31, 1997. Due to the large size of freight car orders and
variations  in the mix of freight cars,  the size of the  Company's  freight car
operation's backlog at the end of any given period may fluctuate  significantly.
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.  A number of the Company's sales contracts in
this segment are made pursuant to purchase orders and releases which are subject
to change or cancellation by the customer.

         SUPPLIERS AND RAW MATERIALS

         Between  70% and 80% of a  freight  car's  costs  relate  to  purchased
specialty  components such as wheels, axles and brakes and raw materials such as
aluminum and steel. Costs for specialty  components and raw materials  generally
are fixed at the time a freight car order is accepted.

         The major raw material for the  Company's  foundry  operations is steel
scrap,  which is purchased  from various  sources.  The Company has no long-term
contractual  commitments with any scrap  suppliers,  and does not anticipate any
difficulty in obtaining scrap because of the large number of potential suppliers
and its  position as a major  purchaser.  Increases  in steel  scrap  prices are
passed  through  to  customers  by means of a  fluctuating  surcharge,  which is
calculated  and  adjusted  on a monthly  or  quarterly  basis.  Other  major 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.

         LABOR RELATIONS AND EMPLOYEES

         At December 31, 1998, the Company had approximately 3,890 employees. Of
these,  approximately 690 are salaried  employees and the balance are paid on an
hourly basis.  Approximately  2,815 or about 72% of all employees are members of
unions.  The Company has collective  bargaining  agreements  with several unions
including  the United  Steelworkers  of  America,  the United  Autoworkers,  the
Brotherhood  of Teamsters,  the United  Paperworkers  International  Union,  the
Patternmakers  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 in 1998 and early 1999:
(1) JAC's  four-year  contract with the United  Steelworkers  of America entered
into in January 1998  (retroactive  to October  1997);  (2) Gunite's  three-year
contract  with the United  Autoworkers  entered into in May 1998;  and (3) FCS's
five-year  contract with the United  Autoworkers  entered into in February 1999.
Such  contracts  expire  at  various  times  over the next few  years,  with the
following  contracts  expiring in 1999: (1) Brillion's  contract with the United
Paperworkers  International Union on July 1, 1999; (2) Fabco's contract with the
International  Association of Machinists  and Aerospace  Workers on September 1,
1999;  (3) Gunite's  contract with the  International  Brotherhood of Teamsters,
Chaffeurs,  Warehousemen and Helpers of America  covering  employees at Gunite's
Elkhart  Plant  #1 on  June  27,  1999;  and  (4)  Gunite's  contract  with  the
International Brotherhood of Teamsters,  Chaffeurs,  Warehousemen and Helpers of
America  covering  employees at Gunite's Elkhart Plant #2 on September 26, 1999.
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.

                                       11
<PAGE>

       REGULATION

         The Federal Railroad  Administration  ("FRA")  administers and enforces
federal laws and  regulations  relating to railroad  safety.  These  regulations
govern equipment and safety appliance  standards for freight cars and other rail
equipment used in interstate  commerce.  The  Association of American  Railroads
("AAR")  also  promulgates  a wide  variety of rules and  regulations  governing
safety and design of equipment,  relationships  among  railroads with respect to
freight cars in interchange  and other matters.  The AAR also certifies  freight
car  buildings  and component  manufacturers  that provide  equipment for use on
railroads in the United States.  New products generally must undergo AAR testing
and  approval  processes.  As a result of these  regulations,  the Company  must
maintain certain certifications with the AAR as a freight car manufacturer,  and
products sold by the Company must meet AAR and FRA standards.

         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 1998, 1997
and  1996,  TCI's  capital   expenditures  for  compliance  with   environmental
requirements  were  approximately  $2.1 million,  $0.7 million and $0.4 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  $5.7 million,  $5.3 million and $4.1 million in 1998,
1997 and 1996,  respectively.  TCI's subsidiaries have budgeted $2.0 million for
environmentally  related  capital  expenditures  in 1999. 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  the  facilities  located  in  Johnstown,
Pennsylvania,  Piedmont, Alabama and Danville,  Illinois are not material. Other
than for certain immaterial expenditures, the Company's subsidiaries (other than
TCI) have not  budgeted  funds for capital  expenditures  in 1999 to comply with
environmental laws.

                                       12
<PAGE>

         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). 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.

         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. Although the most recent state
inspection (November 1994) found Brillion to be in compliance with all Wisconsin
air  regulations,  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.

                                       13
<PAGE>

          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.

         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
$11 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.  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.

                                       14

<PAGE>

         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 both have been
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
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. Accordingly,  Brillion expects to undertake
additional soil and groundwater analysis 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
currently has under advisement  Brillion's  motion for judgment on the pleadings
and  defendants'  motion to  dismiss,  with a ruling  expected  during the first
quarter of 1999.  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.

                                       15

<PAGE>

         POTENTIAL  COSTS. As of December 31, 1998, based on all the information
currently available,  the Company had an environmental  reserve in the amount of
$10.7  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  of JAC or Bostrom and an
immaterial  reserve has been  established  at FCS.  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 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 $0.8 million per year in 1999 through 2003 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        56    Chairman of the Board, President and Chief
                                  Executive Officer of  the Company

     Andrew M.  Weller      52    Executive Vice President and Chief 
                                  Financial Officer and Director of the Company

                                       16

<PAGE>


     John E. Carroll, Jr.   57    President and Chief Executive Officer of 
                                  Johnstown America Corporation and Freight Car
                                  Services, Inc.

     James D. Cirar         52    Senior Vice President of the Company and
                                  Chairman of Johnstown America Corporation
                                  and Freight Car Services, Inc.

     Thomas W. Cook         61    Senior Vice President of the Company and 
                                  President and Chief Executive Officer of
                                  Truck Components Inc. and President - 
                                  Gunite Corporation

     Timothy A. Masek       34    Vice President - Corporate Development of the
                                  Company and President of Bostrom Seating, Inc.

     John D. McClain        54    President - Brillion Iron Works, Inc.

     Donald C. Mueller      35    Vice President and Treasurer of the Company

     Mark A. Niemela        63    President - Fabco Automotive Corporation

     Kenneth M. Tallering   37    Vice President, General Counsel and Secretary
                                  of the Company

     Edward J. Whalen       50    Vice President of the Company and President of
                                  JAIX Leasing Company

     Brent Williams         44    Controller of the Company

         THOMAS M. BEGEL,  Chairman of the Board,  President and Chief Executive
Officer  of the  Company,  has served as  President  since  October  1991 and 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.

         JOHN E.  CARROLL,  JR.,  has served as  President  and Chief  Executive
Officer of Johnstown  America  Corporation and Freight Car Services,  Inc. since
August 1998. Prior to August 1998, he was President of Glencoe Capital, Inc., an
investment  company,  from April 1997 to August 1998 and President of Thrall Car
Manufacturing Company from August 1990 through April 1997.

         JAMES D. CIRAR, has served as Chairman of Johnstown America Corporation
and Freight Car Services, Inc. since September 1998 and as Senior Vice President
of the Company  since July 1997.  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.

         THOMAS W. COOK, has been the President and Chief  Executive  Officer of
TCI since May 1994 and President of Gunite  Corporation since 1991. Mr. Cook has
been Senior Vice  President of the Company since July 1997. He was President and
Chief  Executive  Officer of Redlaw  Industries,  Inc.,  a holding  company with
interests in foundries,  stamping  plants and textile  industries,  from 1986 to
1991.  From  1967 to  1986,  Mr.  Cook  was with  ITT  Grinnell  Corporation,  a
manufacturer  and  distributor of valves and related piping  products,  where he
became President in 1983.

         TIMOTHY A. MASEK, has served as Vice President - Corporate  Development
of the Company since December 1995 and President of Bostrom Seating,  Inc. since
June 1996. 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.

                                       17

<PAGE>

         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.  McClain  held  metallurgical  and foundry  manager  positions at
Owens-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.  For the five years  prior to July 1998,  he held  various  financial
positions with Fisher Scientific International.

         MARK  A.  NIEMELA,  joined  Fabco  Automotive  Corporation  in  1966 as
Production Control Manager.  He held the positions of Material Manager and Plant
Manager before his appointment to the position of General Manger in 1975 and was
appointed President in 1986.

         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.

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

         EDWARD J. WHALEN,  has served as Vice  President  of the Company  since
January  1997.  He has also  served  as  President  of JAIX  Leasing  since  its
inception in December  1994.  Mr. Whalen served as Secretary of the Company from
October  1991 until March 1995,  as Treasurer of the Company from May 1993 until
March 1995,  as Vice  President of the Company  from October 1991 until  October
1995 and as President of Freight Car Services,  Inc. from March 1995 until March
1998. From 1989 to 1991, he was a financial and rail car industry consultant.

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

                                       18
<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.

Auto-Flood(TM):                             The  Company's  product  name for an
                                            aluminum,   rapid   discharge   open
                                            hopper car that offers more capacity
                                            than  conventional  steel  automatic
                                            discharge cars.

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.

Covered Hopper Car:                         A totally contained bottom discharge
                                            freight car used to haul 
                                            agricultural, chemical  and mineral 
                                            products.

Gondola Car:                                Open-top  freight  car   principally
                                            used  for   hauling   coal  which  
                                            discharges     through   a  rotary
                                            dump mechanism.  Non-rotary gondolas
                                            are also used to haul  products such
                                            as  ore,   scrap   metal  and  other
                                            commodities.

Intermodal Car:                             Freight  car  used   primarily   for
                                            moving  containers and trailers that
                                            can be placed on trucks and ships as
                                            well as freight cars.

OEM:                                        Original equipment manufacturer.

Open Hopper Car:                            Freight  car  which  discharges  its
                                            load  from  the  bottom  of the car.

Quad Hopper Car:                            A  type  of open  hopper  car  which
                                            discharges  through  four   doors on
                                            the  bottom  of  the   freight  car.

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.

                                       19
<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>


                                                                        OWNED/       COVERED
          FACILITIES                      BUSINESS FUNCTION             LEASED        SPACE
                                                                                      SQ. FT.
<CAPTION>
FREIGHT CAR SEGMENT
<S>                             <C>                                    <C>           <C>
JAC (1)
Shell Plant                      Freight car erection                   Owned         153,000

Franklin Plant                   Freight car erection and               Owned         619,000
                                 fabrication
Offices                                                                 Owned          87,000
                                 Administrative Offices

(1) All JAC facilities are located in Johnstown, Pennsylvania

FCS
Danville, Illinois               Freight car erection and rebuild       Owned         297,000

TRUCK COMPONENTS SEGMENT

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

BRILLION (2)
Plant I                          Melting;  Molding;   Administrative    Leased        180,000
Plant II                         Offices                                Leased        165,000
Plant III                        Melting; Molding                       Owned         150,000
Plant IV                         Farm Machinery                         Leased         85,000
                                 Finishing; Shipping
(2) All Brillion facilities are located in Brillion, Wisconsin

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

BOSTROM                          Manufacturing; Administrative          Leased        196,000
Piedmont, Alabama                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.

                                       20
<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  currently has under  advisement  Brillion's  motion for
judgment on the  pleadings  and  defendants'  motion to  dismiss,  with a ruling
expected  during the first  quarter of 1999. 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.

                                       21
<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  "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
              1997                       HIGH          LOW
              ----                       ----          ---
              First Quarter             $4.75        $3.25
              Second Quarter             6.63         3.00
              Third Quarter              9.25         5.75
              Fourth Quarter            15.50         8.50

              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


         The number of record holders of the Company's common stock on March 17,
1999 was 128.

         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  Credit  Facility  (as  defined  herein)  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.

                                       22
<PAGE>


                             SELECTED FINANCIAL DATA


<TABLE>


-------------------------------------------------------------------------------------------------------------
                                          YEAR ENDED DECEMBER 31,
                                  (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
----------------------------------- -------------- -------------- -------------- ------------- --------------
                                          1994         1995 (1)         1996           1997          1998
                                          ----         --------         ----           ----          ----
----------------------------------- -------------- -------------- -------------- ------------- --------------
INCOME STATEMENT DATA:
<S>                                      <C>            <C>            <C>           <C>            <C>
Total revenues                           $468,525       $668,601       $559,972      $650,347       $966,058
Cost of goods                             442,153        608,982        474,158       556,365        825,900
                                          -------        -------        -------       -------        -------
    Gross profit                           26,372         59,619         85,814        93,982        140,158


Selling, general & administrative          13,144         28,117         46,605        46,187         53,005
Amortization expense                        3,573          6,478         10,174         8,554          8,557
Gain on sale of leased freight cars           ---            ---         (1,354)         (824)        (1,223)
Pension termination gain                      ---            ---            ---           ---         (1,688)
Patent lawsuit settlement                     ---            ---            ---           ---        (16,750)
Reduction of environmental reserves           ---            ---            ---       (14,300)           --- 
                                          -------        -------        -------       -------        -------
   Operating income                         9,655         25,024         30,389        54,365         98,257
Interest expense net                          266         14,702         35,836        35,380         30,323
Provision (benefit)for
 income taxes                               3,692          4,737            (76)        9,511         28,933
                                          -------        -------        -------       -------        -------
   Income(loss) before
    extraordinary items                     5,697          5,585         (5,371)        9,474         39,001
Exraordinary items, net of taxes              ---            ---            ---        (2,008)        (1,146)
                                          -------        -------        -------       -------        -------

Net income (loss)                          $5,697         $5,585        $(5,371)       $7,466        $37,855
                                          =======        =======        =======       =======        =======
Diluted Earnings Per Share:
Income (loss) before
    extraordinary itmes                    $ 0.58         $ 0.57        $ (0.55)       $ 0.96        $  3.85
Extraordinary itmes                           ---            ---            ---         (0.20)         (0.11)
                                           ------         ------        -------        ------        -------
Net income (loss)                          $ 0.58         $ 0.57        $ (0.55)       $ 0.76        $  3.74
                                           ======         ======        =======        ======        =======
----------------------------------- -------------------------------------------------------------------------
                                                               AS OF DECEMBER 31,
       BALANCE SHEET DATA:                                         (in thousands)
----------------------------------- -------------- -------------- -------------- ------------- --------------
                                          1994           1995           1996           1997       1998
                                          ----           ----           ----           ----       ----
----------------------------------- -------------- -------------- -------------- ------------- --------------
Total assets                             $143,354       $578,825       $555,283      $578,838       $584,354
Long-term debt, including
 current maturities                         7,600        329,786        304,175       312,273        255,046
Total shareholders' equity                 63,234         68,874         63,537        71,020        110,717
-------------------------------------------------------------------------------------------------------------
(1)     Acquired Bostrom in January, 1995 and TCI in August, 1995. See Note 3 to
        the  Consolidated  Financial  Statements  of the  Company  and the notes
        thereto for the year ended December 31, 1998.
-------------------------------------------------------------------------------------------------------------
</TABLE>


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

         The  information  required by this Item is incorporated by reference to
pages 8 through 11 of the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1998.

ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

         The  consolidated  balance  sheets as of December 31, 1997 and 1998 and
the consolidated statements of income and cash flows for each of the three years
in the period ended December 31, 1998 and the notes  thereto,  together with the
report of independent public accountants contained on pages 12 through 36 of the
Company's  Annual Report to Shareholders  for the fiscal year ended December 31,
1998 are incorporated herein by reference.

                                       23
<PAGE>

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

               None.

                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

           The information required by this Item is incorporated by reference to
pages  2-3  of  the  Company's   Proxy  Statement  for  the  Annual  Meeting  of
Shareholders  of the  Company  to be  held  on  May  6,  1999,  except  for  the
information  regarding the Company's  executive  officers  which is set forth in
"Business" in Item 1 under the heading "Executive Officers of the Registrant."

           SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

           The information required by this Item is incorporated by reference to
page 16 of the Company's  Proxy Statement for the Annual Meeting of Shareholders
of the Company to be held on May 6, 1999.

ITEM 11.  EXECUTIVE COMPENSATION

          The information  required by this Item is incorporated by reference to
pages  4-10  of the  Company's  Proxy  Statement  for  the  Annual  Meeting  of
Shareholders of the Company to be held on May 6, 1999.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          The information  required by this Item is incorporated by reference to
pages  15-16  of the  Company's  Proxy  Statement  for  the  Annual  Meeting  of
Shareholders of the Company to be held on May 6, 1999.

ITEM 13.  CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS

                                      None

                                       24
<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 the Company's Annual Report to
Shareholders  for the fiscal year ended December 31, 1998,  pages 12 through 36,
and are incorporated herein by reference:

    Consolidated Balance Sheets as of December 31, 1998 and 1997.
    Consolidated  Statements  of Income for the Years Ended  December  31, 1998,
    1997 and 1996.  Consolidated  Statements  of Cash Flows for the Years  Ended
    December 31, 1998, 1997 and 1996.
    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     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).
           4.5     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")).
           10.1    Agreement of Purchase and Sale,  dated as of May 3, 1991, as
                   amended,  between  Bethlehem Steel Corporation and Johnstown
                   America  Industries,  Inc.  (incorporated  by  reference  to
                   Exhibit 2.1 to the Initial S-1).
           10.2    Agreement  and Plan of  Merger,  dated as of June 13,  1995,
                   among Johnstown  America  Industries,  Inc., 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).
           10.3    Stockholders  Agreement,  dated as of June 13,  1995,  among
                   Johnstown  America  Industries,  Inc., 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
                   Johnstown America  Industries,  Inc., 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).
           10.4    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 Johnstown
                   America  Industries,  Inc.  (incorporated  by  reference  to
                   Exhibit 2 to the Company's  Current Report on Form 8-K dated
                   January 24, 1995).
           10.5    Credit  Agreement,  dated  as  of  August  23,  1995,  among
                   Johnstown   America   Industries,    Inc.,   the   financial
                   institutions named therein, Chemical Bank, as Administrative
                   Agent,  Collateral Agent and Swingline Lender, Chemical Bank
                   Delaware,  as Issuing Bank,  and The First  National Bank of
                   Boston and The First National Bank of Chicago,  as Co-Agents
                   (incorporated  by reference to Exhibit 99.1 to the Company's
                   Current Report on Form 8-K dated August 30, 1995).

                                       25
<PAGE>

           10.6    Amendment  to Credit  Agreement,  dated as of  December  31,
                   1995,  among  Johnstown   America   Industries,   Inc.,  the
                   financial  institutions  named  therein,  Chemical  Bank, as
                   Administrative Agent, Collateral Agent and Swingline Lender,
                   Chemical  Bank  Delaware,  as  Issuing  Bank,  and The First
                   National  Bank of  Boston  and The  First  National  Bank of
                   Chicago, as Co-Agents  (incorporated by reference to Exhibit
                   10.6 to the  Company's  Form 10-K for the fiscal  year ended
                   December 31, 1995 (the "1995 Form 10-K")).
           10.7    Second Amendment to Credit  Agreement,  dated as of December
                   31,  1996 among  Johnstown  America  Industries,  Inc.,  the
                   financial  institutions  named  therein,  Chemical  Bank, as
                   Administrative Agent, Collateral Agent and Swingline Lender,
                   Chemical  Bank  Delaware,  as  Issuing  Bank,  and The First
                   National  Bank of  Boston  and The  First  National  Bank of
                   Chicago, as Co-Agents. (incorporated by reference to Exhibit
                   10.7 to the  Company's  Form 10-K for the fiscal  year ended
                   December 31, 1996 (the "1996 Form 10-K")).
           10.8    Amendment  No. 3,  Consent and Waiver  dated as of August 4,
                   1997 to  Credit  Agreement,  among  the  Company,  The Chase
                   Manhattan  Bank,  as  Administrative,  Collateral  Agent and
                   Swingline Lender,  the First National Bank of Boston and the
                   First National Bank of Chicago, as Co-Agents,  and the Chase
                   Manhatten Bank of Delaware, as Issuing Bank (incorporated by
                   reference to Exhibit 10.22 to the Form S-4).
           10.9    Term Loan Agreement, dated as of June 14, 1996, between JAIX
                   Leasing Company and NationsBanc Leasing Corporation of North
                   Carolina  (incorporated  by reference to Exhibit 10.1 to the
                   Company's Form 10-Q for the Quarter ended June 30, 1996).
           10.10   Loan  Agreement,  dated  as of  December  1,  1995,  between
                   Freight  Car  Services,  Inc.  and  the  City  of  Danville,
                   Vermillion County, Illinois relating to $5.3 million of City
                   of  Danville,   Illinois  Variable  Rate  Demand  Industrial
                   Revenue Bonds (Freight Car Services,  Inc. Project),  Series
                   1995  (incorporated by reference to Exhibit 10.7 to the 1995
                   Form 10-K).
           10.11   1993   Stock   Option  Plan   (incorporated  by reference to
                   Exhibit 10.8 to the Initial S-1).
           10.12   Johnstown   America   Corporation   Salaried   Pension  Plan
                   (incorporated by reference to Exhibit 10.11  to  the  nitial
                   S-1).
           10.13   Amended and Restated Stockholder and Warrantholder Agreement
                   (incorporated  by reference to Exhibit  10.14 to the Initial
                   S-1).
           10.14   Employment  Agreement of Thomas M. Begel   (incorporated  by
                   reference to Exhibit  10.11 to the 1995 Form 10-K).
           10.15   Employment  Agreement of Andrew M. Weller  (incorporated  by
                   reference to Exhibit 10.12 to the 1995 Form 10-K).
           10.16   Employment  Agreement of Thomas W. Cook   (incorporated   by
                   reference to Exhibit  10.13 to the 1995 Form 10-K).
           10.17   Form of  Employment  Agreement  (incorporated  by  reference
                   to  Exhibit 10.17  to the 1996  Form  10-K).  10.18  Form of
                   Severance Agreement  (incorporated  by  reference to Exhibit
                   10.15  to the 1995  Form  10-K).  10.19  Form of Stay  Bonus
                   Agreement (incorporated by reference to Exhibit 10.16 to the
                   1995  Form 10-K).  10.20  Form  of  Stock  Option  Agreement
                   (incorporated by reference to Exhibit 10.17 to the 1995 Form
                   10-K). 10.21 Form of Supplemental  Life Insurance  Agreement
                   (incorporated by reference to Exhibit 10.21 to the 1996 Form
                   10-K.)
           10.22   Gunite  Corporation   Salaried  Employees   Retirement  Plan
                   (incorporated by  reference  to  Exhibit  10.18  to the 1995 
                   Form 10-K).
           10.23   Form of Deferred  Compensation  Agreement  (incorporated  by
                   reference to Exhibit 10.24 to the  Company's  Form 10-K for
                   the fiscal year ended December 31, 1997).
           10.24   Gunite  Corporation  Profit  Sharing Plan  (incorporated by
                   reference to Exhibit 10.19 to the 1995 Form 10-K).
           10.25   Form of Restricted Stock Agreement.

                                       26

<PAGE>


           13.1   Selected    portions  of  the   Registrant's   Annual  Report
                  to Shareholders  for the fiscal year ended  December 31, 1998
                  which are incorporated by reference herein.
           21.1   Subsidiaries of the Company
           23.1   Consent of Arthur Andersen LLP
           27.1   Financial Data Schedule


(b)  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.

(c)  Reports on Form 8-K

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

                    None







                                       27
<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.

                       JOHNSTOWN AMERICA INDUSTRIES, INC.


                                       By:/S/THOMAS M. BEGEL
                                          ------------------------------------
                                          Chairman of the Board, President and
                                             Chief Executive Officer


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

<TABLE>

<CAPTION>
SIGNATURE                           TITLE                                       DATE
---------                           -----                                       ----

<S>                                 <C>                                         <C>
/S/THOMAS M. BEGEL                  Chairman of the Board, President            March 25, 1999
---------------------------         and Chief Executive Officer
Thomas M. Begel                     (Principal Executive Officer)

/S/ANDREW M. WELLER                 Executive Vice President, Chief             March 25, 1999
---------------------------         Financial Officer and Director
Andrew M. Weller                    (Principal Financial Officer and
                                    Principal Accounting Officer)

/S/CAMILLO SANTOMERO                Director                                    March 25, 1999
---------------------------
Camillo Santomero

/S/R. PHILIP SILVER                 Director                                    March 25, 1999
---------------------------
R. Philip Silver

/S/FRANCIS S. STROBLE               Director                                    March 25, 1999
---------------------------
Francis S. Stroble

</TABLE>

                                       28