SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                    Form 10-Q


   (X)  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934

        For Quarterly Period Ended June 29, 1997 

                                       or

   ( )  Transition Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange  Act of 1934

        For the transition period from _________________________
                                    to _________________________

   Commission File Number 0-17873

                             GIDDINGS & LEWIS, INC.
             (Exact name of registrant as specified in its charter)

             Wisconsin                                       39-1643189
   (State or other jurisdiction of                        (I.R.S. Employer
   incorporation or organization)                         Identification No.)
                                                                              

               142 Doty Street, Fond du Lac, Wisconsin    54935   
               (Address of principal executive offices) (Zip Code)

   Registrant's telephone number, including area code:  (920) 921-9400

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

   Common Stock Outstanding as of June 29, 1997: 31,061,719 shares

   <PAGE>

                             GIDDINGS & LEWIS, INC.

                                 Form 10-Q Index

                         For Quarter Ended June 29, 1997

                                                                         Page

   PART I.   Financial Information

             Item 1.   Condensed Consolidated Statements of Income          3

                       Condensed Consolidated Statements of Cash Flows      4

                       Condensed Consolidated Balance Sheets                5

                       Condensed Consolidated Statement of Changes in 
                            Shareholders' Equity                            6

                       Notes to Condensed Consolidated Financial
                            Statements                                 7 - 10

             Item 2.   Management's Discussion and Analysis of 
                            Results of Operations and Financial
                            Condition                                 11 - 13


   PART II.  Other Information

             Item 1.  Legal Proceedings                               14 - 15

             Item 6.  Exhibits and Reports on Form 8-K                16 - 17

             Signatures                                                    18

             Exhibit Index                                            19 - 20

   <PAGE>

                             GIDDINGS & LEWIS, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                 (In Thousands Except Share and Per Share Data)
                                   (Unaudited)

                                Three months ended        Six months ended
                               June 29,    June 30,     June 29,     June 30,
                                  1997        1996         1997         1996 

   Net Sales                  $156,702    $199,646     $304,319     $392,066 

   Costs and expenses:
     Cost of sales             112,400     156,698      220,275      306,423 

     Selling, general and
      administrative expenses   19,478      20,411       39,653       40,815 

     Depreciation &
      amortization               5,739       5,577       11,515       11,057 
                               -------     -------      -------      -------
   Total operating expenses    137,617     182,686      271,443      358,295 
                               -------     -------      -------      -------
   Operating income             19,085      16,960       32,876       33,771 

   Interest expense, net         1,540       2,426        3,231        4,680 

   Other income                     (6)       (312)          (4)        (420)
                               -------     -------      -------      -------
   Income before provision 
     for income taxes           17,551      14,846       29,649       29,511 

   Provision for income taxes    6,843       5,568       11,562        9,816 
                               -------     -------      -------      -------
   Net income                $  10,708   $   9,278    $  18,087    $  19,695 
                             =========   =========    =========    =========

   Per common share amounts:
     Net income              $     .34   $     .27    $     .57    $     .57 
                             =========   =========    =========    =========

     Dividends declared      $     .03   $     .03    $     .06    $     .06 
                             =========   =========    =========    =========

   Average number of common
     shares outstanding     31,094,558  34,617,573   31,978,720   34,572,269 
                            ==========  ==========   ==========   ==========

                             See accompanying notes.


   <PAGE>
                             GIDDINGS & LEWIS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (In Thousands - Unaudited)

                                   Three months ended       Six months ended
                                   June 29,   June 30,    June 29,   June 30,
                                      1997       1996        1997       1996 
   Operating activities:
      Net income                   $10,708    $ 9,278     $18,087    $19,695 
      Adjustments to reconcile
      net income to net cash
      provided (used) by 
      operating activities:
        Depreciation and
            amortization             5,739      5,577      11,515     11,057 
        Net changes in working
            capital items            2,414     18,684      41,004       (100)
        Other                         (296)     2,756      (4,851)     6,244 
                                   -------     ------      ------     ------
   Net cash provided by
     operating activities           18,565     36,295      65,755     36,896 
                                   -------     ------      ------     ------
    Investing activities:
      Additions to property,
       plant, and equipment         (2,147)    (3,794)     (5,271)    (9,358)
      Other                           (389)       709        (738)       873 
                                   -------     ------      ------     ------
   Net cash used by investing
        activities                  (2,536)    (3,085)     (6,009)    (8,485)
                                   -------     ------      ------     ------
   Financing activities:
      Proceeds from draws on
      lines of credit                    0     28,000           0     73,467 
      Repayments under lines of
            credit                       0    (48,000)    (15,930)   (95,000)
      Payment for repurchase of
            stock                  (14,392)         0     (37,212)         0 
      Proceeds from stock options
            exercised                  511        304       7,663        304 
      Cash dividends                  (918)    (1,038)     (1,899)    (2,076)
                                   -------     ------      ------     ------
   Net cash used by financing
        activities                 (14,799)   (20,734)    (47,378)   (23,305)
                                   -------     ------      ------     ------
   Effect of exchange rate 
      changes on cash                 (204)      (188)     (1,708)        57 
                                   -------     ------      ------     ------
   Net increase in cash
       and cash equivalents          1,026     12,288      10,660      5,163 

   Cash and cash equivalents -
       beginning of period          81,292      7,091      71,658     14,216 
                                   -------     ------      ------     ------
   Cash and cash equivalents -
       end of period             $  82,318  $  19,379   $  82,318  $  19,379 
                                 =========  =========   =========  =========

                             See accompanying notes.

   <PAGE>
                              GIDDINGS & LEWIS, INC
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In Thousands-Unaudited)

                                                          June 29,   Dec. 31,
                                                            1997       1996  
      ASSETS
      Current Assets:
         Cash and cash equivalents                       $ 82,318   $ 71,658 
         Accounts receivable                              193,330    280,985 
         Inventories                                       85,883     88,969 
         Deferred income taxes                             29,048     29,048 
         Other current assets                               4,355      3,951 
                                                         --------   --------
            Total current assets                          394,934    474,611 

      Fixed assets - net                                  114,602    118,484 
      Costs in excess of net acquired assets
         and other intangible assets                      181,594    185,276 
      Deferred income taxes                                19,524     19,524 
      Other assets                                         16,179     13,505 
                                                         --------   --------

            TOTAL ASSETS                                 $726,833   $811,400 
                                                         ========   ========

   LIABILITIES & SHAREHOLDERS' EQUITY
      Current liabilities:
         Notes payable                                   $ 16,660   $ 34,226 
         Accounts payable                                  23,377     30,141 
         Accrued expenses and other liabilities           107,675    148,938 
                                                         --------   --------
            Total current liabilities                     147,712    213,305 

         Long-term debt                                   100,000    100,000 
         Long-term employee benefits and other
           long-term liabilities                           35,171     37,272 
                                                         --------   --------
            Total liabilities                             282,883    350,577 

      Contingencies                                             0          0 

      Shareholders' equity:
         Common stock                                       3,518      3,462 
         Capital in excess of par                         336,275    328,668 
         Retained earnings                                160,360    144,172 
         Cumulative translation adjustment                  5,441      6,755 
                                                         --------   --------
                                                          505,594    483,057 
         Less:
         Treasury Stock                                   (55,851)   (18,639)
         Unamortized compensation expense                  (5,793)    (3,595)
                                                         --------   --------
            Total shareholders' equity                    443,950    460,823 
                                                         --------   --------
            TOTAL LIABILITIES AND
              SHAREHOLDERS' EQUITY                       $726,833   $811,400 
                                                         ========   ========

                             See accompanying notes.

   <PAGE>
   <TABLE>
                                                       GIDDINGS & LEWIS, INC.

                                 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

                                                   SIX MONTHS ENDED JUNE 29, 1997

                                                  (In Thousands Except Share Data)
   <CAPTION>
                                                     Capital in               Cumulative    Treasury   Unamortized     Total
                                  Common Stock       Excess of     Retained   Translation   Shares     Compensation  Shareholders'
                              Shares       Amount       Par        Earnings   Adjustment    Purchased    Expense       Equity    
   <S>                      <C>            <C>         <C>          <C>           <C>       <C>           <C>          <C>
   Balance, 
         December 31, 1996  34,622,855     $3,462      $328,668     $144,172      $6,755    ($18,639)     ($3,595)     $460,823

   Net stock awards 
         and options           555,864         56         7,607            0           0           0       (3,232)        4,431

   Net income                                                         18,087                                             18,087

   Amortization of 
         compensation
         expense                                                                                            1,034         1,034

   Cash dividends                                                     (1,899)                                            (1,899)

   Translation
         adjustment                                                               (1,314)                                (1,314)

   Repurchase of
       Common Stock                             0             0            0           0     (37,212)           0       (37,212)
                            ----------     ------      --------     --------      ------    --------      -------      --------
   Balance,
         June 29, 1997      35,178,719     $3,518      $336,275     $160,360      $5,441    ($55,851)     ($5,793)     $443,950
                            ==========     ======      ========     ========      ======    ========      =======      ========

                                                       See accompanying notes.

   </TABLE>

   <PAGE>

                             GIDDINGS & LEWIS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  June 29, 1997
                                   (Unaudited)

   1.       Basis of Presentation 

            The accompanying unaudited condensed consolidated financial
            statements have been prepared in accordance with generally
            accepted accounting principles for interim financial information
            and with the instructions to Form 10-Q and Article 10 of
            Regulation S-X.  Accordingly, they do not include all of the
            information and footnotes required by generally accepted
            accounting principles for complete financial statements.  In the
            opinion of management, all adjustments (consisting of normal
            recurring accruals) considered necessary for a fair presentation
            have been included.  Due to the nature of a substantial portion
            of the Company's business (i.e., long-term and complex
            contracts), significant adjustments are sometimes required to
            reflect experience and other factors.  Such adjustments are
            recorded as changes in estimates as part of the percentage-of-
            completion accounting in the period they become known.  Operating
            results for the six month period ended June 29, 1997 are not
            necessarily indicative of the results that may be expected for
            the year ending December 31, 1997.  For further information,
            refer to the consolidated financial statements and footnotes
            thereto included in the Company's Annual Report on Form 10-K for
            the year ended December 31, 1996 and Management's Discussion and
            Analysis of Results of Operations and Financial Condition
            included herein.

            The Company is organized into four major operating groups: 
            Automation Technology, Integrated Automation, Automation
            Measurement and Control, and European Operations.  The Automation
            Technology Group is responsible for the manufacture of cellular
            and flexible manufacturing systems, automated standalone machine
            tools, and machining centers, tooling, fixtures, castings and
            remanufacturing.  The Integrated Automation Group produces
            flexible transfer lines, flexible machining systems, and assembly
            automation systems.  Programmable industrial computers, servo
            systems, controls, and measurement products are offered by the
            Automation Measurement and Control Group.  The European
            Operations Group offers most of the Company's product lines
            through its sales, engineering, manufacturing, and service
            facilities in England and Germany.

   2.       Inventories
                                      June 29,    December 31,
                                        1997          1996    
                                           (in thousands)
             Raw materials          $   40,179     $   51,310  
             Work-in-process            35,262         26,356 
             Finished goods             10,442         11,303  
                                    ----------     ----------
                                    $   85,883     $   88,969  
                                    ==========     ==========

   3.       Contingencies

            The Company is involved in various environmental matters,
            including matters in which the Company and certain of its
            subsidiaries have been named as potentially responsible parties
            under the Comprehensive Environmental Response Compensation and
            Liability Act ("CERCLA").  One such matter is the Company's
            implementation of a Wisconsin Department of Natural Resources
            ("WDNR") approved clean-up plan on a nine acre parcel of land
            adjacent to its former West Allis, Wisconsin manufacturing
            facility.  The Company has completed the soil removal portion of
            the plan and is currently engaged in limited groundwater
            monitoring to support its application to the WDNR for site
            closure.

            The Company has established accruals ($8.0 million and $9.1
            million at June 29, 1997 and December 31, 1996, respectively) for
            all environmental contingencies of which management is currently
            aware in accordance with generally accepted accounting
            principles.  In establishing these accruals, management
            considered (a) reports of environmental consultants retained by
            the Company, (b) the costs incurred to date by the Company at
            sites where clean-up is presently ongoing and the estimated costs
            to complete the necessary remediation work remaining at such
            sites, (c) the financial solvency, where appropriate, of other
            parties that have been responsible for effecting remediation at
            specified sites, and (d) the experience of other parties who have
            been involved in the remediation of comparable sites.  The
            accruals recorded by the Company with respect to environmental
            matters have not been reduced by potential insurance or other
            recoveries and are not discounted.  Although the Company has and
            will continue to pursue such claims against insurance carriers
            and other responsible parties, future potential recoveries remain
            uncertain and, therefore, were not recorded as a reduction to the
            estimated gross environmental liabilities.  Based on the
            foregoing and given current information, management believes that
            future costs in excess of the amounts accrued on all presently
            known and quantifiable environmental contingencies will not be
            material to the Company's financial position or results of
            operations.

            In another matter, a Michigan Department of Environmental Quality
            ("State") investigation into alleged environmental violations at
            the Company's Menominee, Michigan facility resulted in the
            issuance of criminal complaints against the Company and two of
            its employees in November 1994.  The complaints, filed in
            Menominee County, Michigan district and circuit courts, generally
            focus on alleged releases of hazardous substances and the alleged
            illegal treatment and disposal of hazardous waste.  In December
            1996, the seven charges then pending against the Company in
            circuit court were dismissed on the grounds that, among other
            things, the statute  under which the Company was charged is
            unconstitutional.  In February 1997, the Company and the State
            reached a tentative agreement which was subsequently reduced to a
            final written settlement and plea agreement and entered by the
            court on April 3, 1997.  The general parameters of the agreement
            are as follows:  (i)  the State dismissed with prejudice and
            released the Company from all charges and covenanted not to sue
            on any matters, administrative, civil or criminal, raised in the
            criminal complaint or investigation; (ii) the Company will
            reimburse the State's investigation costs in the amount of
            $492,000; (iii) the Company pled no contest (not admitting
            liability) to one misdemeanor charge; and (iv) the circuit court
            decision holding the statute under which the Company was charged
            unconstitutional was vacated.  With this final resolution, the
            cross appeals were dismissed.  The three misdemeanor counts
            against the two employees of the Company remain pending in
            district court.

            Also two civil lawsuits are pending against the Company in
            Menominee County, Michigan district court which seek unspecified
            damages based on allegations of improper disposal and emissions
            at the Menominee facility.  The Company remains committed to
            vigorously defending itself against all suits, charges and
            allegations to the extent they are not resolved on terms
            satisfactory to the Company.  Information presently available to
            the Company does not enable it to reasonably quantify potential
            civil or criminal penalties or remediation costs, if any, related
            to these civil lawsuits.

            The Company is also involved in other litigation and proceedings,
            including product liability claims.  In the case of product
            liability, the Company is partially self-insured and has accrued
            for all claim exposure for which a loss is probable and
            reasonably estimable.  Based on current information, management
            believes that future costs in excess of the amounts accrued for
            all such existing litigation will not be material to the
            Company's financial position or results of operations.

   4.       Stock Repurchase Program

            On March 18, 1997, the Company announced that the Board of
            Directors had authorized management to repurchase an additional
            10% of the Company's outstanding common stock.  This is in
            addition to the 10% of outstanding stock which the Board in July
            1996 authorized to be repurchased.  As of June 29, 1997, the
            Company had repurchased 4,117,000 shares at an aggregate purchase
            price of $55.9 million, with 987,500 of those shares being
            purchased in the second quarter of 1997 at an aggregate purchase
            price of $14.4 million.  During the first half of 1997, 2,622,000
            shares at an aggregate purchase price of $37.2 million were
            purchased.

   5.       Earnings Per Share

            In February 1997, the Financial Accounting Standards Board issued
            Statement No. 128, Earnings per Share, which is required to be
            adopted on December 31, 1997.  At that time, the Company will be
            required to change the method currently used to compute earnings
            per share and to restate all prior periods.  Under the new
            requirements for calculating basic earnings per share, the
            dilutive effect of stock options will be excluded.  The impact of
            Statement 128 on the calculation of primary and fully diluted
            earnings per share for the second quarter ended June 29, 1997 and
            June 30, 1996 is not expected to be material.

                             GIDDINGS & LEWIS, INC.

          Management's Discussion and Analysis of Results of Operations
                             and Financial Condition

   On June 11, 1997, the Company entered into an Agreement and Plan of Merger
   (the "Merger Agreement") with Thyssen Aktiengesellschaft ("Thyssen") and
   its indirect wholly-owned subsidiary, TAQU, Inc. ("TAQU") pursuant to
   which Thyssen will acquire all of the outstanding common stock of the
   Company.  The Merger Agreement provides for the acquisition of the Company
   in two steps.  First, on June 18, 1997, TAQU commenced a cash tender offer
   for all of the outstanding common stock of the Company at $21 per share
   (the "Offer").  The Offer was completed on July 30, 1997.  At such time,
   TAQU accepted for payment approximately 30,127,220 shares of common stock
   validly tendered by shareholders pursuant to the Offer and not withdrawn. 
   This amount represents approximately 97% of the total number of issued and
   outstanding shares.  The second and final step in the acquisition of the
   Company by Thyssen is the merger.  The merger will allow TAQU to acquire
   all outstanding shares of common stock of the Company not tendered and
   purchased pursuant to the Offer.  Pursuant to the merger, TAQU will be
   merged with and into the Company and the Company will continue as the
   surviving corporation.  As a result of the merger, the Company will become
   an indirect wholly-owned subsidiary of Thyssen, and each outstanding share
   not owned directly or indirectly by Thyssen will be converted into the
   right to receive the same price per share paid in the Offer.  Consummation
   of the merger is subject to certain conditions, including receipt of
   approval of the Merger Agreement by a majority of the shareholders of the
   Company.  As a result of the consummation of the Offer, TAQU owns and has
   the right to vote a sufficient number of outstanding shares to approve the
   Merger Agreement without the affirmative vote of any other shareholder,
   thereby assuring such approval.  Additional information regarding the
   Offer and the merger is set forth in the Schedule 14D-1 filed by Thyssen
   and TAQU with the Securities and Exchange Commission (the "Commission")
   and the Schedule 14D-9 filed by the Company with the Commission, each on
   June 18, 1997 and as subsequently amended and supplemented.

   Prior to the Company entering into the Merger Agreement with Thyssen,
   Harnischfeger Industries, Inc. ("HII") commenced an unsolicited cash
   tender offer for all of the outstanding common stock of the Company at $19
   per share.  The HII tender offer expired on June 20, 1997 and was not
   extended.  See also Part II, Item 1, "Legal Proceedings."

                 Results of Operations for the First Six Months
                            of 1997 Compared to 1996

   The following table sets forth the Company's bookings by operating group
   in the period and consolidated backlog at period-end on a quarterly basis
   for the period April 1, 1996 through June 29, 1997.

                     June 30,   Sept. 29,  Dec. 31,    Mar. 30,   June 29,
                       1996       1996       1996        1997       1997  
                                         (In Thousands)
   Operating group:

   Automation
     Technology     $ 66,088   $ 68,864    $ 68,047    $ 84,413    $ 99,208
   Integrated
     Automation       49,040     24,237      24,466      22,505      12,628
   European
     Operations       15,425     42,693      12,661       8,602       8,262
   Automation
     Measurement
     and Control      15,640     15,338      15,376      17,638      16,326
                    --------   --------    --------    --------    --------
   Consolidated
     bookings       $146,193   $151,132    $120,550    $133,158    $136,424
                    ========   ========    ========    ========    ========
   Consolidated
     backlog        $305,989   $272,379    $208,298    $192,992    $173,942
                    ========   ========    ========    ========    ========

   Bookings in the first six months of 1997 were $269.6 million compared to
   bookings in the first six months of 1996 of $318.6 million.  Automation
   Technology bookings of $183.6 million in the first six months of 1997
   increased 21.1% from $151.7 million in the comparable period of 1996. 
   Automation technology received several significant follow-on orders for
   RAM products, and demand for large machine tools strengthened.  Integrated
   Automation bookings in the first six months totaled $35.1 million, a 58.4%
   decrease from the year earlier period of $84.4 million.  The decrease in
   Integrated Automation bookings is principally due to reduced demand and
   delayed placement of major orders from the Company's automotive customers. 
   European Operations bookings decreased 67.1% from $51.3 million in the
   first half of 1996 to $16.9 million in the first half of 1997.  Reduced
   orders by European automobile manufacturers were a significant factor in
   the decline.  Automation Measurement and Control bookings of $34.0 million
   for the first six months of 1997 increased 8.7% over the comparable 1996 
   period bookings of $31.2 million.

   Bookings in the second quarter of 1997 were $136.4 million compared to
   bookings in the second quarter of 1996 of $146.2 million.  Automation
   Technology bookings of $99.2 million in the second quarter of 1997
   increased 50.1% from $66.1 million in the comparable period of 1996 for
   the reasons stated above.  Integrated Automation bookings in the second
   quarter totaled $12.6 million, a 74.2% decrease from the year earlier
   period of $49.0 million.  European Operations bookings decreased 46.4%
   from $15.4 million in the second quarter of 1996 to $8.3  million in the
   second quarter of 1997.  Integrated Automation and European Operations'
   declines are automotive related.   Automation Measurement and Control
   bookings of $16.3 million for the second quarter of 1997 increased 4.4%
   from the comparable 1996 period bookings of $15.7 million.

   Consolidated net sales in the first six months of 1997 totaled $304.3
   million compared to $392.1 million in the year earlier period.  Net sales
   for Automation Technology of $139.2 million decreased 23.6% from $182.3
   million in the year earlier period.  Integrated Automation net sales of
   $72.8 million decreased 38.1% from $117.6 million.  European Operations
   sales in the first six months of 1997 were $57.0 million, a decrease of
   2.9% from $58.7 million in the year earlier period.  Automation
   Measurement and Control net sales increased 5.6% to $35.3 million in the
   1997 period compared to $33.5 million in the 1996 period.

   Consolidated net sales in the second quarter of 1997 totaled $156.7
   million compared to $199.6 million in the year earlier period.  This
   decrease in net sales was due to the relatively low beginning backlog as
   well as the actions the Company has taken to increase the selectivity in
   the business booked.  Net sales for Automation Technology of $71.8 million
   decreased 16.9% from $86.5 million in the year earlier period.  Integrated
   Automation net sales of $35.9 million decreased 42.6% from $62.4 million
   in the second quarter of 1996.  European Operations sales in the second
   quarter of 1997 were $31.7 million, a decrease of 9.3% from $35.0 million
   in the year earlier period.  Automation Measurement and Control net sales
   increased 10.0% to $17.3 million in the 1997 period compared to $15.7
   million in the 1996 period.

   The consolidated gross margin percentage (before depreciation and
   amortization) for the first six months and the second quarter of 1997 were
   27.6% and 28.3%, respectively, as compared to 21.8% and 21.5% for the
   comparable 1996 periods.  This increase was the result of greater
   productivity, better pricing, and an improved mix of business.

   Selling, general, and administrative expenses (before depreciation and
   amortization) increased as a percentage of sales to 13.0% for the first
   six months of 1997 from 10.4% in the year earlier period, and 12.4% for
   the second quarter of 1997 from 10.2% in the second quarter of 1996. 
   Selling, general, and administrative expenses in the second quarter of
   1997 were impacted by two factors - a one time pre-tax benefit of $4.7
   million from the sale of a previously written off receivable, which was
   partially offset by $3.1 million in expenses associated with HII's 
   failed hostile attempt to acquire the Company.

   Net interest expense for the first six months and second quarter of 1997
   declined to $3.2 million and $1.5 million, respectively, as compared with
   $4.7 million and $2.4 million in the comparable 1996 periods due to
   reduced borrowings as a result of an improved cash position.

   The provision for income taxes of $11.6 million and $6.8 million for the
   first six months and second quarter of 1997 is based on the estimated
   annual effective tax rate for 1997.  The  Company's effective tax rate for
   the first six months of 1997 amounted to 39.0% as compared to 33.3% for
   the year earlier period.  The 1996 tax rate included the one-time tax
   benefit in the first quarter of 1996 of initially implementing tax-
   planning strategies to capture the benefit of foreign losses.

   Liquidity and Capital Resources at June 29, 1997

   On June 29, 1997, the Company had $82.3 million of cash and cash
   equivalents on hand which was an increase of $10.7 million from the
   balance on hand at the beginning of the year.  For the first six months of
   1997, operating activities contributed $65.8 million of cash.  Cash
   provided from working capital changes totaled $41.0 million.

   Investing activities used $6.0 million for the first six months which
   included $5.3 million in capital expenditures. Financing activities used
   cash of $47.4 million which included repurchase of stock of $37.2 million
   and the repayment of $15.9 million under lines of credit. Offsetting these
   amounts was $7.7 million provided from stock transactions including the
   exercise of options under the Management Stock Purchase Program.

   On March 18, 1997, the Company announced that the Board of Directors had
   authorized management to repurchase an additional 10% of the Company's
   outstanding common stock. This is in addition to the 10% of outstanding
   stock that was authorized to be repurchased in July 1996.  During the
   first six months and second quarter of 1997, the Company repurchased
   2,622,000 and 987,000 shares respectively at an aggregate purchase price
   of $37.2 million and $14.4 million, respectively.

   The Company believes its cash flows from operations and funds available
   under domestic and foreign credit agreements will be adequate to finance
   capital expenditures and working capital requirements for the foreseeable
   future.

                           Part II - OTHER INFORMATION

                             Giddings & Lewis, Inc.

                                    Form 10-Q

                                  June 29, 1997

   Item 1.     Legal Proceedings

          On April 25, 1997, HII and DSFA Corporation, a wholly owned
          subsidiary of HII, commenced an action against the Company and
          certain of the Company directors, entitled Harnischfeger Indus.,
          Inc. v. Isles, et al C.A. No. 97-C-0488.  On July 2, 1997, pursuant
          to a stipulation for dismissal among HII, DSFA and the Company, the
          action was dismissed.

          On May 6, 1997, a putative class action was filed against the
          Company and certain of its directors, entitled Charles Miller, et
          al. v. Giddings & Lewis, Inc. et al No. 97 CV 003823.  On July 3,
          1997, pursuant to a notice of voluntary dismissal filed by the
          plaintiffs, the class action was dismissed.

          On May 13, 1997, a derivative and individual action was filed
          against the Company and certain of its directors, entitled Charles
          Miller, et al. v. Isles, et al. No. 97-C-0561.  On July 3, 1997,
          the action was voluntarily dismissed by the plaintiffs pursuant to
          a notice of dismissal.

          Information concerning the claims set forth in the above-referenced
          actions is provided in the Company's Quarterly Report on Form 10-Q
          for the quarter ended March 31, 1997 and in the Schedule 14D-9
          filed by the Company with the Commission on May 8, 1997 and as
          subsequently amended.

   Item 6.     Exhibits and Reports on Form 8-K

               (a)  Exhibits

                    2.1  Agreement and Plan of Merger, dated June 11, 1997,
                         among Thyssen AG, TAQU, Inc. and Giddings & Lewis,
                         Inc. [Incorporated by reference to Exhibit 1 to
                         Giddings & Lewis, Inc.'s Solicitation/Recommendation
                         Statement on Schedule 14D-9, dated June 18, 1997.]

                    3.1  Amendment to By-laws effective as of the time of the
                         1997 Annual Meeting of Shareholders.  [Incorporated
                         by reference to Exhibit 3.1 to Giddings & Lewis,
                         Inc.'s Quarterly Report on Form 10-Q for the quarter
                         ended March 30, 1997.]

                    3.2  Amendment to By-laws adopted after the 1997 Annual
                         Meeting of Shareholders.  [Incorporated by reference
                         to Exhibit 3.2 to Giddings & Lewis, Inc.'s Quarterly
                         Report on Form 10-Q for the quarter ended March 30,
                         1997.]

                    3.3  By-laws of Giddings & Lewis, Inc., as amended
                         [Incorporated by reference to Exhibit 3.3 to
                         Giddings & Lewis, Inc.'s Quarterly Report on Form
                         10-Q for the quarter ended March 30, 1997.]

                    4.1  First Amendment to Rights Agreement, dated as of
                         June 8, 1997, between Giddings & Lewis, Inc. and
                         Firstar Trust Company [Incorporated by reference
                         to Exhibit 4.2 to Giddings & Lewis, Inc.'s Form 8-
                         A/A, dated June 27, 1997.]

                    10.1 Form of Amended and Restated Key Executive
                         Employment and Severence Agreement, dated April 30,
                         1997 [Incorporated by reference to Exhibit 2 to
                         Giddings & Lewis, Inc.'s Solicitation/Recommendation
                         Statement on Schedule 14D-9, dated May 8, 1997.]

                    10.2 Management Stock Purchase Program as Amended and
                         Restated, dated April 30, 1997 [Incorporated by
                         reference to Exhibit 3 to Giddings & Lewis, Inc's
                         Solicitation/Recommendation Statement on Schedule
                         14D-9, dated May 8, 1997.]

                    10.3 Form of Award Agreement, as amended, for use in
                         connection with the Giddings & Lewis, Inc. 1989
                         Stock Option Plan [Incorporated by reference to
                         Exhibit 10.3 to Giddings & Lewis, Inc.'s Quarterly
                         Report on Form 10-Q for the quarter ended March 30,
                         1997.]

                    10.4 Form of Award Agreement, as amended, for use in
                         connection with the Giddings & Lewis, Inc. 1989
                         Restricted Stock Plan [Incorporated by reference to
                         Exhibit 10.4 to Giddings & Lewis, Inc.'s Quarterly
                         Report on Form 10-Q for the quarter ended March 30,
                         1997.]

                    10.5 Form of Restricted Stock Award Agreement, as
                         amended, for use in connection with the Giddings &
                         Lewis, Inc. 1993 Stock and Incentive Plan 
                         [Incorporated by reference to Exhibit 10.5 to
                         Giddings & Lewis, Inc.'s Quarterly Report on Form
                         10-Q for the quarter ended March 30, 1997.]

                    10.6 Form of Stock Option Award Agreement for use in
                         connection with the Giddings & Lewis, Inc. 1993
                         Stock and Incentive Plan [Incorporated by
                         reference to Exhibit 10.6 to Giddings & Lewis,
                         Inc.'s Quarterly Report on Form 10-Q for the quarter
                         ended March 30, 1997.]

                    10.7 Resolutions Authorizing Amendment of the
                         Supplemental Executive Retirement Plan, dated
                         April 30, 1997 [Incorporated by reference to
                         Exhibit 13 to Giddings & Lewis, Inc.'s
                         Solicitation/Recommendation Statement on Schedule
                         14D-9, dated May 8, 1997.]

                    27    Financial Data Schedule (EDGAR Version only)

          (b)  Reports on Form 8-K

               The Company filed a Current Report on Form 8-K, dated June 12,
               1997, reporting under Item 5 that the Company has entered into
               a definitive merger agreement pursuant to which it will be
               acquired by Thyssen AG.

   <PAGE>
                                   Signatures

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

                                        Giddings & Lewis, Inc.


   Date: August 11, 1997                /s/ Marvin L. Isles
                                        Marvin L. Isles
                                        Chairman and Chief Executive
                                        Officer


   Date: August 11, 1997                /s/ Douglas E. Barnett
                                        Douglas E. Barnett
                                        Vice-President and Controller
                                        (Principal Financial and
                                        Accounting Officer)

   <PAGE>
                                  EXHIBIT INDEX

   Exhibit No.      Exhibit Description

        (a)         Exhibits

                    2.1  Agreement and Plan of Merger, dated June 11, 1997,
                         among Thyssen AG, TAQU, Inc. and Giddings & Lewis,
                         Inc. [Incorporated by reference to Exhibit 1 to
                         Giddings & Lewis, Inc.'s Solicitation/Recommendation
                         Statement on Schedule 14D-9, dated June 18, 1997.]

                    3.1  Amendment to By-laws effective as of the time of the
                         1997 Annual Meeting of Shareholders [Incorporated
                         by reference to Exhibit 3.1 to Giddings & Lewis,
                         Inc.'s Quarterly Report on Form 10-Q for the quarter
                         ended March 30, 1997.]

                    3.2  Amendment to By-laws adopted after the 1997 Annual
                         Meeting of Shareholders [Incorporated by reference
                         to Exhibit 3.2 to Giddings & Lewis, Inc.'s Quarterly
                         Report on Form 10-Q for the quarter ended March 30,
                         1997.]

                    3.3  By-laws of Giddings & Lewis, Inc., as amended 
                         [Incorporated by reference to Exhibit 3.3 to
                         Giddings & Lewis, Inc.'s Quarterly Report on Form
                         10-Q for the quarter ended March 30, 1997.]

                    4.1  First Amendment to Rights Agreement, dated as of
                         June 8, 1997, between Giddings & Lewis, Inc. and
                         Firstar Trust Company [Incorporated by reference to
                         Exhibit 4.2 to Giddings & Lewis, Inc.'s Form 8-A/A,
                         dated June 27, 1997.]

                    10.1 Form of Amended and Restated Key Executive
                         Employment and Severence Agreement [Incorporated by
                         reference to Exhibit 2 to Giddings & Lewis, Inc.'s
                         Solicitation/Recommendation Statement on Schedule
                         14D-9, dated May 8, 1997.]

                    10.2 Management Stock Purchase Program as Amended and
                         Restated, dated April 30, 1997 [Incorporated by
                         reference to Exhibit 3 to Giddings & Lewis, Inc.'s
                         Solicitation/Recommendation Statement on
                         Schedule 14D-9, dated May 8, 1997.]

                    10.3 Form of Award Agreement, as amended, for use in
                         connection with the Giddings & Lewis, Inc. 1989
                         Stock Option Plan [Incorporated by reference to
                         Exhibit 10.3 to Giddings & Lewis, Inc.'s Quarterly
                         Report on Form 10-Q for the quarter ended March 30,
                         1997.]

                    10.4 Form of Award Agreement, as amended, for use in
                         connection  with the Giddings & Lewis, Inc. 1989
                         Restricted Stock Plan [Incorporated by reference
                         to Exhibit 10.4 to Giddings & Lewis, Inc.'s
                         Quarterly Report on Form 10-Q for the quarter ended
                         March 30, 1997.]

                    10.5 Form of Restricted Stock Award Agreement, as
                         amended, for use in connection with the Giddings &
                         Lewis, Inc. 1993 Stock and Incentive Plan 
                         [Incorporated by reference to Exhibit 10.5 to
                         Giddings & Lewis, Inc.'s Quarterly Report on Form
                         10-Q for the quarter ended March 30, 1997.]

                    10.6 Form of Stock Option Award Agreement for use in
                         connection with the Giddings & Lewis, Inc. 1993
                         Stock and Incentive Plan [Incorporated by
                         reference to Exhibit 10.6 to Giddings & Lewis,
                         Inc.'s Quarterly Report on Form 10-Q for the quarter
                         ended March 30, 1997.]

                    10.7 Resolutions Authorizing Amendment of the
                         Supplemental Executive Retirement Plan, dated April
                         30, 1997 [Incorporated by reference to Exhibit 13 to
                         Giddings & Lewis, Inc.'s Solicitation/Recommendation
                         Statement on Schedule 14D-9, dated May 8, 1997.]

                    27    Financial Data Schedule (EDGAR Version only).