<PAGE>   1
                                                                   EXHIBIT 10(g)

                             SIFCO INDUSTRIES, INC.

                      CHANGE IN CONTROL SEVERANCE AGREEMENT

         THIS AGREEMENT is made between SIFCO Industries, Inc. (the "Company"),
and Frank Cappello (the "Executive"), dated as of the 28 day of September, 2000.

         1. PURPOSE OF THIS AGREEMENT. The Board of Directors of the Company
(the "Board") has determined that it is in the best interests of the Company and
its shareholders to assure that the Company will have the continued dedication
of the Executive, notwithstanding the possibility, threat or occurrence of a
Change in Control (as defined in Section 2(b)) of the Company, and the
uncertainties and risks that a Change in Control would pose for the Executive.
To this end, the Board desires to encourage the Executive's full attention and
dedication to the Company, currently and in the event of any threatened or
pending Change in Control, and to provide the Executive with compensation and
benefits arrangements upon a Change in Control which ensure that the
compensation and benefits expectations of the Executive will be satisfied and
which are competitive with those of other similar corporations.

         2. DEFINITIONS. Whenever used herein, the following terms shall have
the meanings set forth below:

         (a) "Beneficiary" means the person or entity designated by the
Executive (on Exhibit B hereto) to receive payment of any benefits hereunder
that are or may be payable after the Executive's death. The Executive may change
his or her designation of Beneficiary by filing a revised Exhibit B with the
Company prior to his or her death.

         (b) "Cause" means any of the following:

              (i)          the Executive's engagement in unlawful acts intended
                           to result in substantial personal enrichment to the
                           Executive at the Company's expense;

              (ii)         the Executive's engagement in a material breach of
                           his or her responsibilities to the Company that
                           results in a material injury to the Company other
                           than any such breach resulting from the Executive's
                           incapacity due to illness or injury or in connection
                           with an actual or anticipated termination of
                           employment with the Company by the Executive for Good
                           Reason; or

              (iii)        an act or acts by the Executive which have been found
                           in an applicable court to constitute a felony.

         (c) "Change in Control" means any of the following events:

              (i)          The acquisition by any individual, entity or group
                           (within the meaning of Section 13(d)(3) or 14(d)(2)
                           of the Securities Exchange




<PAGE>   2


                           Act of 1934, as amended (the "Exchange Act")) (a
                           "Person") of beneficial ownership (within the meaning
                           of Rule 13d-3 promulgated under the Exchange Act) of
                           50% or more of either (A) the then-outstanding common
                           shares of the Company other than those held by the
                           Voting Trust (the "Outstanding Company Common
                           Shares") or (B) the combined voting power of the then
                           outstanding voting securities of the Company entitled
                           to vote generally in the election of directors other
                           than that represented by shares held by the Voting
                           Trust (the "Outstanding Company Voting Securities");
                           but for purposes of this subsection, (i) the
                           following acquisitions of voting securities shall not
                           constitute a Change in Control: (A) any acquisition
                           directly from the Company, (B) any acquisition by the
                           Company, (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           the Company or any corporation controlled by the
                           Company, or (D) any acquisition by any corporation
                           pursuant to a transaction which complies with clauses
                           (A), (B) and (C) of subsection (iii) of this Section
                           2; or

              (ii)         Individuals who, as of the date of this Agreement,
                           constitute the Board (the "Incumbent Board") cease
                           for any reason to constitute at least a majority of
                           the Board; but any individual becoming a director
                           subsequent to the date hereof whose election, or
                           nomination for election by the Company's
                           shareholders, was approved by a vote of at least a
                           majority of the directors then comprising the
                           Incumbent Board shall be considered as though such
                           individual were a member of the Incumbent Board, but
                           excluding from the Incumbent Board, for this purpose,
                           any such individual whose initial assumption of
                           office occurs as a result of an actual or threatened
                           election contest with respect to the election or
                           removal of directors or other actual or threatened
                           solicitation of proxies or consents by or on behalf
                           of a Person other than the Board; or

              (iii)        Consummation of a reorganization, merger or
                           consolidation or sale or other disposition of all or
                           substantially all of the assets of the Company (a
                           "Business Combination"), in each case, unless,
                           following such Business Combination, (A) the
                           individuals and entities who were the beneficial
                           owners, respectively, of the Outstanding Company
                           Common Shares and Outstanding Company Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           more than 50%, respectively, of the then-outstanding
                           common shares and the combined voting power of the
                           then-outstanding voting securities entitled to vote
                           generally in the election of directors, as the case
                           may be, of the corporation resulting from such
                           Business Combination (including, without limitation,
                           a corporation which as



<PAGE>   3


                           a result of such transaction owns the Company or all
                           or substantially all of the Company's assets either
                           directly or through one or more subsidiaries), (B) no
                           Person (excluding any corporation resulting from such
                           Business Combination or any employee benefit plan (or
                           related trust) of the Company or such corporation
                           resulting from such Business Combination)
                           beneficially owns, directly or indirectly, 50% or
                           more of, respectively, the then-outstanding common
                           shares of the corporation resulting from such
                           Business Combination, or the combined voting power of
                           the then-outstanding voting securities of such
                           corporation except to the extent that such ownership
                           existed prior to the Business Combination, and (C) at
                           least a majority of the members of the board of
                           directors of the corporation resulting from such
                           Business Combination were members of the Incumbent
                           Board at the time of the execution of the initial
                           agreement, or of the action of the Board, providing
                           for such Business Combination; or

              (iv)         Approval by the shareholders of the Company of a
                           complete liquidation or dissolution of the Company.

         (d) "Code" means the Internal Revenue Code of 1986, as amended.

         (e) "Disability" means an illness or injury which, in the opinion of
         the Board, renders the Executive unable or incompetent to perform the
         job responsibilities which the Executive held or the job duties to
         which the Executive was assigned at the time such illness or injury was
         incurred, on a full-time basis for at least six (6) consecutive months.

         (f) "Good Reason" means the occurrence of only one or more of the
         following events provided that the Executive specifically agrees in
         writing that such event shall constitute Good Reason:

              (i)          there is a change in the Executive's status or
                           position with the Company that, in the Executive's
                           reasonable judgment, represents an adverse change
                           from his or her status or position immediately before
                           the Change in Control, including a change in the
                           principal place of the Executive's employment that
                           does not conform with the Company's present policies
                           for executive relocation, but excluding required
                           travel to an extent substantially consistent with the
                           Executive's business travel obligations immediately
                           before the Change in Control;

              (ii)         the Executive is assigned any duties or
                           responsibilities that, in the Executive's reasonable
                           judgment, are inconsistent with the Executive's
                           status or position immediately before the Change in
                           Control;


<PAGE>   4


              (iii)        the Executive is subject to a layoff by the Company
                           or the Executive's employment with the Company is
                           involuntarily terminated other than for Cause by the
                           Company or due to the Executive's Disability, death
                           or retirement;

              (iv)         there is a reduction by the Company in the
                           Executive's total compensation as in effect at the
                           time of the Change in Control (i.e., the Executive's
                           base salary plus the most recent award that the
                           Executive earned under the Company's Incentive
                           Compensation Plan) or as the same may be increased
                           from time to time;

              (v)          the Company fails to continue in effect any
                           compensation plan, employee benefit plan, or other
                           plan, program or policy of the Company that is
                           intended to materially benefit the Company's
                           employees (each a "Plan"), in which the Executive was
                           participating at the time of the Change in Control,
                           other than as a result of the normal expiration of
                           such Plan in accordance with its terms in effect at
                           the time of the Change in Control; or

              (vi)         the Company takes any action or fails to take any
                           action that would:

                           (A)      adversely affect the Executive's continued
                                    participation in any Plan on at least as
                                    favorable a basis as was the case at the
                                    time of the Change in Control;

                           (B)      materially reduce the Executive's benefits
                                    in the future under any Plan; or

                           (C)      deprive the Executive of any material
                                    benefits that the Executive enjoyed at the
                                    time of the Change in Control;

                           except to the extent that such action or inaction by
                           the Company is required by the terms of the Plan as
                           in effect immediately before the Change in Control or
                           is necessary to comply with the applicable law, and
                           except to the extent that the Company provides the
                           Executive with substantially equivalent benefits;

              (vii)        there is a material violation by the Company of any
                           agreement with the Executive; or

              (viii)       without the Executive's consent, the Company fails to
                           pay the Executive any portion of his or her current
                           or deferred compensation within thirty (30) days
                           after the Executive provides written notification to
                           the Company that payment is past due.

         (g) A "Qualifying Termination" is deemed to have occurred for purposes
of this Agreement if there is a Change in Control and, within [two (2)] years
after the Change in


<PAGE>   5


Control, the Executive's employment with the Company is either involuntarily
terminated by the Company without Cause or the Executive terminates employment
with the Company for Good Reason

         (h) "Voting Trust" means that certain voting trust entered into by
agreement dated as of February 1, 1997, into which Common Shares of the Company
have been deposited and with respect to which, as of November 30, 1999, Janice
Carlson and Charles H. Smith, III are trustees.

         3. NOTICE OF CHANGE IN CONTROL. The Company shall provide the Executive
with written notice of the occurrence of a Change in Control in accordance with
Section 13(b) of this Agreement within two (2) weeks after such Change in
Control.

         4. NOTICE OF TERMINATION. (a) Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated, and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
(30) days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

         (b) For purposes of this Agreement, "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date (within thirty (30) days after that date) specified therein, as
the case may be, (ii) if the Executive's employment is terminated by the
Company, other than for Cause or Disability, the Date of Termination shall be
the date on which the Company notifies the Executive of such termination and
(iii) if the Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the Executive
or the disability effective date, as the case may be.

         5. BENEFITS UPON TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL.
In the event of a Qualifying Termination, the Executive shall receive the
benefits described in Exhibit A attached hereto.

         6. DEATH. Notwithstanding any provision of this Agreement to the
contrary, if the Executive's employment is terminated by reason of the
Executive's death, this Agreement shall terminate without further obligations to
the Executive's legal representatives under this Agreement.



<PAGE>   6


         7. DISABILITY. Notwithstanding any provision of this Agreement to the
contrary, if the Executive's employment is terminated by reason of the
Executive's Disability, this Agreement shall terminate without further
obligations to the Executive.

         8. RETIREMENT. Notwithstanding any provision of this Agreement to the
contrary, if the Executive's employment is terminated by reason of the
Executive's retirement from the Company at or after age 65, this Agreement shall
terminate without further obligations to the Executive.

         9. CAUSE; OTHER THAN FOR GOOD REASON. Notwithstanding any provision of
this Agreement to the contrary, if the Executive's employment shall be
terminated by the Company for Cause or if the Executive's employment with the
Company is terminated by the Executive for other than Good Reason, this
Agreement shall terminate without further obligations to the Executive.

         10. OTHER EMPLOYMENT; LEGAL REPRESENTATION. Any severance benefits
described in Exhibit A hereto to which the Executive is entitled will not be
reduced by any remuneration the Executive may receive from employment with
another employer following a Qualifying Termination. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement, and such amounts shall not be reduced whether or
not the Executive obtains other employment. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal fees and expenses which
the Executive may reasonably incur as a result of any contest by the Company,
the Executive or others of the validity or enforceability of, or liability
under, any provision of this Agreement.

         11. NO TAX GROSS-UP PAYMENT. Notwithstanding anything to the contrary
in this Agreement, if any portion of the compensation under the Agreement, or
under any other agreement with or plan of the Company (in the aggregate "Total
Payments"), would constitute an "excess parachute payment" under Section 280G of
the Internal Revenue Code (the "Code"), then the payments to be made to the
Executive under the Agreement shall be subject to the tax imposed by Section
4999 of the Code or any successor provision thereto unless the Company elects to
reduce the payments to be made to the Executive under the Agreement because such
reduction will provide a more favorable after-tax result for the Executive with
respect to the excise taxes described in this Section. The calculation of such
potential excise tax liability, as well as the method in which any compensation
reduction is applied, shall be conducted and determined by the Company's
independent accountants, whose determinations shall be binding on all parties.

         12. SUCCESSORS. (a) This Agreement is personal to the Executive and
shall not be assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.

         (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.


<PAGE>   7


         (c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

         13. MISCELLANEOUS. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

         (b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

         IF TO THE EXECUTIVE:               Frank Cappello
                                            34230 Rosewood Trail
                                            Willoughby Hills, OH 44094

         IF TO THE COMPANY:                 SIFCO INDUSTRIES, INC.
                                            970 East 64th Street
                                            Cleveland, Ohio 44103
                                            Attention: Jeff Gotschall

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communication shall be effective when
actually received by the addressee.

         (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

         (d) The Company may withhold from any amounts payable under this
Agreement such federal, state, local and/or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.


<PAGE>   8


         (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 2(f) of this Agreement, shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first written above.

SIFCO INDUSTRIES, INC.                       EXECUTIVE




By:  /s/Jeffrey P. Gotschall                 /s/Frank Cappello
     -----------------------------           ----------------------------------
 Title: President and CEO                     Signature
                                            Frank Cappello
                                            -----------------------------------
                                            Printed Name




<PAGE>   9


                                    EXHIBIT A

                                       TO

                      CHANGE IN CONTROL SEVERANCE AGREEMENT

                                    BENEFITS

         a. SEVERANCE. In the event the Executive becomes eligible for benefits
under Section 5 of the Agreement, the Company shall pay to the Executive or the
Executive's Beneficiary in a lump sum in cash within thirty (30) days after the
Executive's Date of Termination an amount equal to:

         (i)      $140,000 Dollars;

         (ii)     the excess of (A) the actuarial equivalent of the benefit
                  under any qualified defined benefit pension plan the Company
                  may have (the "Retirement Plan"), and any supplemental
                  retirement plan in which the Executive participates (the
                  "SERP") which the Executive would receive if the Executive's
                  employment continued for two (2) years after the Date of
                  Termination assuming for this purpose that all accrued
                  benefits are fully vested, over (B) the actuarial equivalent
                  of the Executive's actual benefit paid or payable, if any,
                  under the Retirement Plan and the SERP as of the Date of
                  Termination.


         b.       WELFARE BENEFITS. In the event the Executive becomes eligible
                  for benefits under Section 5 of the Agreement, for twenty-four
                  ( 24 ) months after the Executive's Date of Termination, or
                  such longer period as may be provided by the terms of the
                  applicable welfare benefit plan, program, practice or policy,
                  the Company shall continue benefits to the Executive and/or
                  the Executive's family at least equal to those which would
                  have been provided to them in accordance with the Company's
                  welfare benefit plans, programs, practices and policies if the
                  Executive's employment had not been terminated or, if more
                  favorable to the Executive, as in effect generally at any time
                  thereafter with respect to other peer executives of the
                  Company and its affiliated companies and their families;
                  provided, however, that if the Executive becomes reemployed
                  with another employer and is eligible to receive welfare
                  benefits under another employer provided plan, the Company
                  shall discontinue such benefits as of such eligibility date.
                  In lieu of providing such benefits, the Company may elect, in
                  its sole discretion, without the consent of the Executive, to
                  pay in a single sum to the Executive an amount equal to the
                  cash equivalent present value of the premiums to purchase such
                  continued insurance coverage within thirty (30) days after the
                  Executive's Date of Termination.

         (c)      ENHANCED RIGHTS REGARDING STOCK AWARDS. All long-term stock
                  incentive awards held by the Executive (whether in the form of
                  options, phantom


<PAGE>   10



                  units, performance shares, restricted shares or other awards
                  of whatever nature), shall fully vest and all restrictions and
                  conditions shall be removed on the Date of Termination.

         (d)      RETIREMENT BENEFITS. All Retirement Plan, Thrift Plan and SERP
                  benefits of the Executive shall fully vest if they are not
                  otherwise fully vested on the Date of Termination.



<PAGE>   11


                                    EXHIBIT B

                                       TO

                      CHANGE IN CONTROL SEVERANCE AGREEMENT

                           DESIGNATION OF BENEFICIARY

         Executive hereby designates the following individual to receive payment
of any benefits under this Agreement that may be due or payable after the
Executive's death:

Domenica Cappello
--------------------------------
Name of Beneficiary

Spouse
--------------------------------
Relationship to Executive

/s/Frank Cappello
--------------------------------
Signature of Executive

10/25/00
--------------------------------
Date