<PAGE>   1
                                                            EXHIBIT 4.1.1



        FIRST AMENDMENT, dated as of November 22, 1996 (this "Amendment"), to
that certain credit agreement (the "Credit Agreement") which became effective
pursuant to the terms of the termination, Replacement and Restatement Agreement
dated as of June 7, 1995 (the "Restatement Agreement"), among DETROIT DIESEL
CORPORATION, a Delaware corporation (the "Borrower"), the several banks and
other financial institutions parties thereto (the "Lenders") and Chemical Bank,
a New York banking corporation, as agent for the Lenders and the predecessor in
interest of The Chase Manhattan Bank, a New York banking corporation, now
acting as agent for the Lenders (in such capacity, the "Agent").



                              W I T N E S S E T H:
                              - - - - - - - - - -



        WHEREAS, the parties hereto originally entered into a credit agreement
(the "Original Credit Agreement"), dated as of January 7, 1994; and

        WHEREAS, the parties subsequently entered into the Restatement
Agreement whereby the Original Credit Agreement was terminated, subject to
applicable survival provisions, and simultaneously replaced by the Credit
Agreement; and

        WHEREAS, the terms of the Original Credit Agreement are incorporated by
reference into the Credit Agreement (except as expressly modified in the
Restatement Agreement); and

        WHEREAS, pursuant to the Original Credit Agreement and the Credit
Agreement, the Lenders have agreed to make, and have made, certain loans to the
Borrower; and

        WHEREAS, the Borrower has requested, and, upon this Amendment becoming
effective, the Majority Lenders have agreed, that certain provisions of the
Credit Agreement be amended in the manner provided for in this Amendment.



        NOW, THEREFORE, the parties hereto hereby agree as follows:

        I.      DEFINED TERMS.  Except as otherwise specifically defined in
this Amendment, capitalized terms defined in the Credit Agreement and used
herein and therein shall have the meanings given to them in the Credit
Agreement.  References to sections and subsections in this Amendment shall be
to the Credit Agreement.

        II.     AMENDMENTS TO CREDIT AGREEMENT.
                ------------------------------

        I.  Notwithstanding anything to the contrary contained in the Credit
Agreement, but subject to compliance with the conditions set forth in
subsection 5.2 on the date of issuance thereof, and upon delivery of an
Application therefor pursuant to subsection 3.2, the Issuing Bank is authorized
to issue a Standby Letter of Credit in favor of The Chase Manhattan Bank, Milan
Branch in the face amount of $115,000,000 with an expiration date eighteen
months 



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after its initial date of issuance (the "Italian Letter of Credit").  Upon
issuance thereof, the Italian Letter of Credit shall be a Letter of Credit for
all purposes of the Credit Agreement.

        2.  Notwithstanding anything to the contrary contained in the Credit
Agreement, a fronting fee in respect of the Italian Letter of Credit in an
amount equal to .125% of the face amount per annum shall be payable to the
Issuing Bank quarterly in advance, calculated from the date of issuance thereof
to the date of expiration thereof.

        3.  Notwithstanding anything to the contrary contained in the Credit
Agreement, letter of credit commissions for the Italian Letter of Credit shall
be payable quarterly in advance.

        4.  the L/C Commitment shall not be deemed reduced by the amount of the
Italian Letter Credit.

        5.  Subsection 1.1 is hereby amended to include, in its proper
alphabetic place, the following definition:

        "Italian Letter of Credit":  the Letter of Credit (as herein defined)
         described in Section I, paragraph 1 of the First Amendment hereto".

        6.  Clause (1) of subsection 3.1(a) is hereby amended and replaced in
its entirety with the following:

        "(1) the L/C Obligations (excluding those atributable to the Italian
        Letter of Credit) would exceed the L/C Commitment or".

        7.  The first sentence of subsection 7.7, "Limitation on Subsidiary
Indebtedness," is hereby amended and replaced in its entirety with the
following: 

        "Permit any Subsidiary to create, incur, assume or suffer to exist any
        Indebtedness (other than (i) Indebtedness of such Subsidiary to the
        Borrower or any other Subsidiary and Indebtedness secured by Liens
        permitted under subsection 7.2 ("Excluded Indebtedness") and (ii)
        Indebtedness of such Subsidiary that is supported by the Italian Letter
        of Credit if, after giving effect to such Indebtedness, the aggregate
        outstanding principal amount of all Indebtedness of all Subsidiaries
       (other than Excluded Indebtedness) would exceed 10% of Net Worth at such
       time."

        III.  Conditions to Effectiveness.  This Amendment shall become
effective on the date (the "Amendment Effective Date") on which the Borrower,
the Majority Lenders and the Agent shall have executed and delivered to the
Agent this Amendment.

        IV.   General.
              -------

        1.  Representations and Waranties.  In order to induce the Agent and
the Lenders parties hereto to enter into this Amendment, the Borrower hereby
represents and warrants to       





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the Agent and all of the Lenders as of the Amendment Effective Date that the
representations and warranties made by the Borrower in the Credit Agreement are
true and correct in all material respects on and as of the Amendment Effective
Date, before and after giving effect to the effectiveness of this Amendment, as
if made on and as of the Amendment Effective Date (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date).

        2.  Payment of Expenses.  The Borrower agrees to pay or reimburse the
Agent for all of its reasonable out-of-pocket costs and expenses incurred in
connection with this Amendment, including, without limitation, the reasonable
fees and disbursements of counsel the the Agent.

        3.  No Other Amendments; Confirmation.  Except as expressly amended,
modified and supplemented hereby, the provisions of the Credit Agreement and
the Notes are and shall remain in full force and effect.

        4.  Governing Law; Counterparts.  (a) This Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.

        (b)  This Amendment may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.  A set of the copies of this Amendment signed by all the parties
shall be lodged with the Borrower and the Agent.  This Amendment may be
delivered by facsimile transmission of the relevant signature pages hereof.





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        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.


                                         DETROIT DIESEL CORPORATION

                                         By: /s/ Detroit Diesel Corporation
                                             ------------------------------

                                         THE CHASE MANHATTAN BANK, as Agent,
                                         as Issuing Bank and as a Lender

                                         By: /s/ The Chase Manhattan Bank
                                             ------------------------------

                                         BANK OF MONTREAL

                                         By: /s/ Bank of Montreal
                                             ------------------------------

                                         THE BANK OF NOVA SCOTIA

                                         By: /s/ The Bank of Nova Scotia
                                             ------------------------------

                                         CIBC INC.

                                         By: /s/ CIBC Inc.
                                             ------------------------------








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<PAGE>   5
                                        CITIBANK, N.A.

                                        By: /s/ Citibank, N.A.
                                            ---------------------------------

                                        COMERICA BANK

                                        By: /s/ Comerica Bank
                                            ---------------------------------

                                        BANK OF AMERICA ILLINOIS

                                        By: /s/ Bank of America Illinois
                                            ---------------------------------

                                        CREDIT LYONNAIS CAYMAN ISLAND BRANCH
        
                                        By: /s/ Credit Lyonnais Cayman Island
                                            Branch
                                            ---------------------------------

                                        DEUTSCHE GENOSSENSCHAFTSBANK

                                        By: /s/ Deutsche Genossenschaftsbank
                                            ---------------------------------

                                        FIRST BANK NATIONAL ASSOCIATION

                                        By: /s/ First Bank National Association
                                            -----------------------------------






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<PAGE>   6
                                        FIRST UNION NATIONAL BANK OF NORTH
                                        CAROLINA

                                        By: /s/ First Union National Bank of 
                                            North Carolina
                                            --------------------------------

                                        CORESTATES BANK, N.A.

                                        By: /s/ Corestates Bank, N.A.
                                            --------------------------------

                                        NBD BANK, N.A.

                                        By: /s/ NBD Bank, N.A.
                                            --------------------------------

                                        NATIONSBANK, N.A.

                                        By: /s/ NationsBank, N.A.
                                            --------------------------------

                                        THE SUMITOMO BANK, LIMITED

                                        By: /s/ The Sumitomo Bank, Limited
                                            --------------------------------

                                        WELLS FARGO BANK, N.A.

                                        By: /s/ Wells Fargo Bank, N.A.
                                            --------------------------------





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