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 September 29, 1996 

                                       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:  (414) 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 September 29, 1996: 33,127,855 shares

   <PAGE>
                             GIDDINGS & LEWIS, INC.

                                 Form 10-Q Index

                      For Quarter Ended September 29, 1996

                                                                         Page

   PART I.   Financial Information

             Item 1.  Condensed Consolidated Statements of Income           3

                      Condensed Consolidated Statements of Cash Flow        4

                      Condensed Consolidated Balance Sheets                 5

                      Condensed Consolidated Statement of Changes 
                         in Shareholders' Equity                            6

                      Notes to Condensed Consolidated Financial
                         Statements                                       7-9

            Item 2.   Management's Discussion and Analysis of 
                         Results of Operations and Financial
                         Condition                                      10-14

   PART II.  Other Information

             Item 6.  Exhibits and Reports on Form 8-K                     15

             Signatures                                                    16

             Exhibit Index                                                 17

   <PAGE>
                              GIDDINGS & LEWIS, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (In Thousands Except Share and Per Share Data)
                                   (Unaudited)


                                     
                                Three months ended       Nine months ended
                            Sept. 29,       Oct. 1,    Sept. 29,     Oct. 1,
                               1996          1995         1996        1995  

   Net Sales               $  185,794    $  195,921   $  577,860  $  521,622

   Costs and expenses:

      Cost of sales           150,770       153,663      457,193     409,860

      Selling, general and
         administrative
         expenses              18,628        18,601       59,443      48,749

      Depreciation and
         amortization           5,569         5,867       16,626      15,226
                             --------       -------      -------     -------
   Total operating expenses   174,967       178,131      533,262     473,835
                             --------       -------      -------     -------
   Operating income            10,827        17,790       44,598      47,787

   Interest expense, net        2,424         3,399        7,104       6,415

   Other (income)/expense         (79)          253         (499)        115
                             --------      --------      -------     -------
   Income before provision
      for income taxes          8,482        14,138       37,993      41,257

   Provision for income
      taxes                     2,885         5,595       12,701      16,299
                             --------      --------      -------     -------
   Net income              $    5,597     $   8,543    $  25,292   $  24,958
                             ========      ========      =======     =======

   Per common share amounts: 

      Net income           $     0.17     $    0.25    $    0.74   $    0.73
                              =======      ========      =======     =======

      Dividends declared   $     0.03     $    0.03   $     0.09  $     0.09
                              =======      ========      =======     =======

   Average number of
      common shares
      outstanding          33,846,084    34,409,742   34,330,207  34,390,048

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

                                     
                              Three months ended         Nine months ended
                            Sept. 29,       Oct. 1,    Sept. 29,     Oct. 1,
                               1996          1995         1996        1995  

   Operating activities:
      Net income               $  5,597     $  8,543    $  25,292  $  24,958

      Adjustments to reconcile
       net income to net cash
       provided (used) by 
       operating activities:
        Depreciation and
         amortization             5,569        5,867       16,626     15,226
        Net changes in working
         capital items, net of
         the effects of the
         acquisition of Fadal
         Engineering Company,
         Inc.                     2,422       (1,619)       2,322    (41,947)
        Other                    (7,330)      (7,719)      (1,086)    (8,701)
                                -------      -------      -------   --------

   Net cash provided (used) by
      operating activities        6,258        5,072       43,154    (10,464)
                                -------      -------      -------   --------

   Investing activities:
      Purchase of Fadal
        Engineering Company,
        Inc.                        -            -            331   (179,579)
      Additions to property,
        plant and equipment      (6,803)      (3,907)     (16,161)   (11,194)
      Other                        (135)        (901)         407        347
                                -------      -------      -------   --------

   Net cash used by investing
      activities                 (6,938)      (4,808)     (15,423)  (190,426)
                                -------      -------      -------   --------
   Financing activities:
      Proceeds from draws on
       lines of credit           54,970       41,000      128,437    320,938
      Repayments under lines
       of credit                (33,000)    (137,168)    (128,000)  (233,168) 
      Proceeds from sale of
       debt securities                -      100,000            -    100,000
      Payment for debt issue
       costs                          -       (1,151)           -     (1,151)
      Payment for repurchase
       of stock                 (18,639)           -      (18,639)         -
      Proceeds from stock
       options exercised              -            -          304          -
      Cash dividends               (994)      (1,033)      (3,070)    (3,097) 
      Payment for redemption
       of preferred share
       purchase rights                -         (172)           -       (172)
                                -------      -------     --------    -------
   Net cash provided (used)
    by financing activities       2,337        1,476      (20,968)   183,350
                                -------      -------     --------    -------
   Effect of exchange rate
    changes on cash                (275)         165         (218)       323
                                -------      -------     --------    -------
   Net increase (decrease) in
    cash and cash equivalents     1,382        1,905        6,545    (17,217)

   Cash and cash equivalents -
      beginning of period        19,379        4,950       14,216     24,072
                                -------      -------      -------    -------
   Cash and cash equivalents -
      end of period            $ 20,761     $  6,855    $  20,761  $   6,855
                                =======      =======      =======    =======

   <PAGE>

                             GIDDINGS & LEWIS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In Thousands-Unaudited)


                                                September 29,  December 31,
                                                    1996          1995    
   ASSETS

      Current assets:
           Cash and cash equivalents               $ 20,761      $ 14,216
           Accounts receivable                      322,781       350,593
           Inventories                              113,480       102,281
           Deferred income taxes                      4,776         4,776
           Other current assets                       4,891         5,921
                                                    -------       -------
                Total current assets                466,689       477,787

      Fixed assets - net                            115,928       111,382
      Costs in excess of net acquired assets
           and other intangible assets              185,789       192,522
      Deferred income taxes                          19,504        19,700
      Other assets                                   12,884        16,200
                                                    -------       -------
                TOTAL ASSETS                       $800,794      $817,591
                                                    =======       =======

   LIABILITIES & SHAREHOLDERS' EQUITY

      Current liabilities:
           Notes payable                           $ 37,430      $ 36,763
           Accounts payable                          34,450        67,676
           Accrued expenses and other liabilities    95,894        77,888
                                                    -------       -------
                Total current liabilities           167,774       182,327

             Long-term debt                         100,000       100,000
             Long-term employee benefits and other         
             long-term liabilities                   36,411        42,723
                                                   --------      --------
                Total liabilities                   304,185       325,050

             Contingencies                                -             -

      Shareholders' equity:

           Common stock                               3,462         3,442
           Capital in excess of par                 329,574       326,608
           Retained earnings                        183,005       160,783
           Cumulative translation adjustment          3,710         4,223
                                                   --------      --------
                                                    519,751       495,056
                 Less:
                   Treasury Stock                   (18,639)            -
                   Unamortized compensation 
                     expense                         (4,503)       (2,515)
                                                   --------      --------
                        Total shareholders' 
                          equity                    496,609       492,541
                                                   --------      --------
             TOTAL LIABILITIES AND 
                   SHAREHOLDERS' EQUITY            $800,794      $817,591
                                                   ========      ========

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

                                 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

                                                NINE MONTHS ENDED SEPTEMBER 29, 1996

                                                (In Thousands, Except Share Amounts)

                                                             (Unaudited)
   <CAPTION>
                                                  Capital in   Treasury                 Cumul.       Unamor.        Total
                                Common Stock       Excess of    Shares     Retained     Transl.      Comp.      Shareholders'
                              Shares      Amount      Par      Purchased   Earnings        Adj.      Expense        Equity  

    <S>                     <C>          <C>        <C>         <C>        <C>            <C>        <C>            <C>
    Balance, 
       December 31, 1995    34,422,043   $3,442     $326,608    $     0    $160,783       $4,223     ($2,515)       $492,541

    Net stock award and
     options                   200,812       20        2,849                                          (2,808)             61

    Tax benefit related to
     vesting of restricted
     stock                                               117                                                             117

    Net income                                                               25,292                                   25,292

    Amortization of
     compensation expense                                                                                820             820

    Cash dividends                                                           (3,070)                                  (3,070)

    Translation adjustment                                                                  (513)                       (513)

    Other                            0        0            0    (18,639)          0            0           0         (18,639)
                             ----------  ------     --------   --------    --------       ------     -------        --------
    Balance,
       September 29, 1996    34,622,855  $3,462     $329,574   ($18,639)   $183,005       $3,710     ($4,503)       $496,609
                             =========   ======     ========   ========    ========       ======     =======        ========

   </TABLE>
                             See accompanying notes.

   <PAGE>
                             GIDDINGS & LEWIS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               September 29, 1996

                                   (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 nine-month period
      ended September 29, 1996 are not necessarily indicative of the results
      that may be expected for the year ending December 31, 1996.  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, 1995 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
                                   September 29,  December 31,
                                       1996           1995   
                                        (in thousands)
             Raw materials       $      55,713  $     52,694
             Work-in-process            40,656        38,038
             Finished goods             17,111        11,549
                                      --------      --------
                                 $     113,480  $    102,281
                                      ========      ========

   3.  Contingencies

       The Company is involved in various environmental matters, including
       matters in which the Company and certain of its subsidiaries or
       alleged predecessors have been named as potentially responsible
       parties under the Comprehensive Environmental Response Compensation
       and Liability Act (CERCLA).  These matters include a soil and water
       contamination matter at the Company's former West Allis, Wisconsin
       facility.  In 1992, the Company was notified by the Wisconsin
       Department of Natural Resources (WDNR) of contamination at the West
       Allis site.  In 1994, the Company sold most of the site, including
       the manufacturing facility.  The Company has completed the WDNR
       approved clean-up plan on the nine acre portion of the site that was
       not sold.  It is currently monitoring groundwater conditions at the
       site to gather data to support an eventual closure request to the
       WDNR.

       The Company has established accruals ($9.3 million and $10.0 million
       at September 29, 1996 and December 31, 1995, 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.  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
       investigation into alleged environmental violations at the Company's
       Menominee, Michigan facility has resulted in the November 1994
       issuance of a criminal complaint against the Company and two of its
       employees.  The complaints, which are pending 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 wastes.  Two civil lawsuits are also
       pending which seek unspecified damages based on allegations of
       improper disposal and emissions at this facility.  The Company is
       vigorously defending itself against all charges and allegations. 
       Information presently available to the Company does not enable it to
       reasonably estimate potential civil or criminal penalties, or
       remediation costs, if any, related to these matters.  

       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 existing
       litigation will not be material to the Company's financial position
       or results of operations.

   4.  Stock Repurchase Program

       On July 18, 1996, the Company announced that the Board of Directors
       had authorized management to repurchase up to 10% of Company's
       outstanding common stock.  Such repurchases are expected to be made
       principally through open market transactions from time to time as the
       share price and market conditions warrant.  The Company intends to
       fund any such repurchases with cash from operations and additional
       short-term borrowings.  As of September 29, 1996, the Company had
       repurchased 1,495,000 shares at an aggregate purchase price of $18.6
       million.  

   <PAGE>
                             GIDDINGS & LEWIS, INC.

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

                 Results of Operations for the First Nine Months
                            of 1996 Compared to 1995


   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 July 3, 1995 through September 29, 1996.

   <TABLE>
   <CAPTION>

                   Oct. 1,      Dec. 31,      March 31,     June 30,     Sept. 29,
                    1995          1995          1996         1996         1996   
                                          (In Thousands)

   <S>             <C>          <C>           <C>          <C>         <C>
   Operating
     group:

   Automation
     Technology    $ 83,534     $ 75,782      $ 85,581     $ 66,088    $  68,864
   Integrated
     Automation      39,091      (17,956)       35,365       49,040       24,237
   European
     Operations      24,470       79,699        35,848       15,425       42,693
   Automation
     Measurement
     and Control     14,698       16,436        15,615       15,640       15,338
                   --------     --------      --------     --------     --------
   Consolidated
     bookings      $161,793     $153,961      $172,409     $146,193     $151,132
                   ========     ========      ========     ========     ========
   Consolidated
     backlog       $442,507     $388,156      $365,953     $305,989     $272,379
                   ========     ========      ========     ========     ========
   </TABLE>


   Bookings in the first nine months of 1996 were $469.7 million compared to
   bookings in the first nine months of 1995 of $509.6 million.  Automation
   Technology bookings of $220.5 million in the first nine months of 1996
   increased 9.3% from $201.8 million in the comparable period of 1995
   primarily as a result of bookings attributable to Fadal Engineering Co.,
   Inc. (Fadal), which was acquired in April 1995.  The increase attributable
   to Fadal was partially off-set by a decline in bookings for horizontal
   machining centers.  Integrated Automation bookings in the first nine
   months totaled $108.6 million, a 44.4 % decrease from the year earlier
   period of $195.4 million.  The decrease in Integrated Automation bookings
   was principally due to softness in demand for the Company's products in
   1996 from its large automotive customers and the timing of order placement
   in 1995.  The domestic automotive sector and its suppliers continue to be
   a major source for new orders for this group.  European Operations
   bookings increased 55.0% from $60.6 million in the first nine months of
   1995 to $94.0 million in the first nine months of 1996.  Orders from the
   European automobile manufacturers were the significant contributor to the
   1996 increase.  Automation Measurement and Control bookings of $46.6
   million for the first nine months of 1996 decreased 10.1% from the
   comparable 1995 period bookings of $51.8 million.  Much of this decrease
   was the result of a reduction in  orders from the domestic automotive
   industry as compared with the first nine months of 1995.  

   Bookings in the third quarter of 1996 were $151.1 million compared to
   bookings in the third quarter of 1995 of $161.8 million.  Automation
   Technology bookings were $68.9 million in the third quarter of 1996, a
   decrease of 17.6% from $83.5 million in the third quarter of 1995.  This
   decline was caused primarily by a softness in demand for machining centers
   which the Company expects will continue at least into the fourth quarter
   of 1996.  Integrated Automation bookings of $24.2 million in the third
   quarter of 1996 decreased 38.0% from $39.1 million in the third quarter of
   1995 due to some softness in demand for the Company's metalcutting
   equipment.  European Operations bookings increased 74.5% from $24.5
   million in the third quarter 1995 to $42.7 million in the third quarter of
   1996 due primarily to the timing of order placement.  Automation
   Measurement and Control bookings of $15.3 million for the third quarter of
   1996 increased 4.4% from $14.7 million in the third quarter of 1995 due to
   an increase in demand for controls products.  

   Consolidated net sales in the first nine months of 1996 totaled $577.9
   million compared to $521.6 million in the year earlier period.  The
   increase in net sales was primarily related to the inclusion of Fadal for
   the full nine-month period in 1996.  Net sales for Automation Technology
   of $255.0 million increased 25.7% from   $202.9 million in the year
   earlier period due to the addition of Fadal for the full year.  Integrated
   Automation net sales of $183.6 million decreased 8.8% from $201.2 million. 
   European Operations sales in the first nine months of 1996 were $92.3
   million, an increase of 44.7% from $63.7   million in the year earlier
   period.  Automation Measurement and Control net sales decreased 12.6% to
   $47.0 million in the 1996 period compared to $53.8 million in the 1995
   period.

   Consolidated net sales decreased from $195.9 million in the third quarter
   of 1995 to $185.8 million in the third quarter of 1996.  In the third
   quarter of 1996, Automation Technology net sales totaled $72.7 million
   compared to $91.9 million in the year earlier period with the decrease
   resulting from softness in demand for machining centers.  Integrated
   Automation net sales of $65.9 million in the third quarter of 1996
   decreased from $66.8 million in the comparable 1995 period.  European
   Operations net sales in the third quarter of 1996 were $33.6 million, a
   74.0% increase from 1995 third quarter net sales of $19.3 million
   primarily due to the strong bookings in the fourth quarter of 1995.  Net
   sales for the Automation Measurement and Control group were $13.6 million
   in the third quarter of 1996 compared to $17.9 million in the year earlier 
   period. The decline in net sales was due to lower sales of measurement 
   products.    

   The consolidated gross margin percentage (before depreciation and
   amortization) for the first nine months and the third quarter of 1996 was
   20.9% and 18.9%, respectively, as compared to 21.4% and 21.6% for the
   comparable 1995 periods. The decrease in the gross margin percentage in
   the third quarter of 1996 was primarily due to excess program costs on
   certain contracts related to new technology at Integrated Automation and a
   decline in sales of higher margin machining centers.   The Company
   currently expects the softness in demand for machining centers to
   adversely impact margins in the fourth quarter of 1996.  

   Selling, general, and administrative expenses (before depreciation and
   amortization) increased as a percentage of sales to 10.3% in the first
   nine months of 1996 from 9.3% in the year earlier period, and to 10.0% for
   the third quarter of 1996 from 9.5% in the third quarter of 1995.  The
   first nine months of 1995 included the favorable settlement associated
   with the successful defense of a patent infringement suit.  

   Net interest expense for the first nine months and third quarter of 1996
   of $7.1 million and $2.4 million, respectively, changed from $6.4
   million and $3.4    million, respectively, in the comparable 1995 periods. 
   The increase in net interest expense for the first nine months of 1996 is
   mainly attributable to increased borrowings resulting from the acquisition
   of Fadal.  

   The provision for income taxes of $12.7 million and $2.9 million for the
   first nine months and third quarter of 1996, respectively, is based on the
   estimated annual effective tax rate of 38% for 1996 which includes the
   one-time tax benefit in the first quarter of 1996 relating to the initial
   implementation of tax-planning strategies to capture the benefit of
   foreign losses.  The Company's effective tax rate for the first nine
   months of 1996 was to 33.4% as compared to 39.5% for the year earlier
   period.  

   The Company is working aggressively with a customer to resolve outstanding
   issues on two Integrated Automation contracts involving new technology. 
   The Company and the customer are working together to find alternative uses
   for the equipment.  These contracts have a total sales value of
   approximately $20 million.

   The Company is also working closely with another customer to finalize
   the engineering issues necessary to gain final customer acceptance on two
   other Integrated Automation contracts involving new technology which was
   developed at the customer's request.  Acceptance will likely involve 
   additional expenditures on the part of the Company.  These contracts have
   a total sales value of approximately $108 million.

   The Company has accrued for the estimated minimum costs to be incurred
   with respect to these issues.  However, as more information becomes
   available in the fourth quarter, the Company may incur additional charges
   to earnings to recognize costs associated with resolving the outstanding
   issues on these contracts and also to recognize all costs associated with
   the restructuring of this business as described below. The magnitude of
   these additional charges, which may be significant, will depend on the
   outcome of the negotiations and is not estimable at this time.

   To address these issues, the Company has underway significant initiatives
   to restructure the Integrated Automation business, including re-
   engineering the Company's cost estimating and proposal process.  In
   November 1996 the Company announced a reduction in force at the Integrated
   Automation (Fraser) facility.  Expenses for severance and termination
   costs as well as other restructuring costs are also expected to be charged
   to fourth quarter earnings.

   The foregoing discussion of the Company's results of operations contains
   material forward-looking statements intended to qualify for the safe
   harbors from liability established by the Private Securities Litigation
   Reform Act of 1995.  These forward-looking statements can be generally
   identified as such because the context of the statement includes words
   such as the Company "expects", "could face" or other words of similar
   import.  Similarly, statements that describe the Company's future plans or
   actions are also forward-looking statements.  Such forward-looking
   statements are subject to certain risks and uncertainties which could
   cause actual results or outcomes to differ materially from those currently
   anticipated.  Factors potentially affecting these forward-looking
   statements include an increase or decrease from expected levels of orders
   booked, the ability of the Company to achieve cost reduction targets and
   the ability of the Company to obtain customer acceptance of Integrated
   Automation programs currently pending.  A substantial portion of the
   Company's products are sold under long-term, fixed price contracts with
   exacting performance specifications.  Such contracts entail the risk of
   cost overruns and other exposures (including possible consequential
   damages) for the Company in the event the Company fails to perform under
   these contracts.  The forward-looking statements are qualified by
   reference to this risk.  The forward-looking statements are also premised
   on no significant change in the competitive environment, no significant
   variation in materials prices and no changes in general economic
   conditions that would further impact order activity for machine tools. 
   The Company can give no assurance that no further adverse events impacting
   the forward looking statements will occur.  The manufacture and sale of
   machine tools and related technology is a complex and difficult business,
   potentially affected by many unforeseen events beyond the control of the
   Company.  Shareholders, potential investors and other readers are urged to
   consider these factors in evaluating the forward-looking statements and
   are cautioned not to place undue reliance on such forward-looking
   statements.  The forward-looking statements included herein are only made
   as of the date of this Form 10-Q and the Company undertakes no obligation
   to publicly update such forward-looking statements to reflect subsequent
   events or circumstances.

   Liquidity and Capital Resources at September 29, 1996

   On September 29, 1996, the Company had $20.8 million of cash and cash
   equivalents on hand, which was an increase of $6.6 million from the
   balance on hand at the beginning of the year.  For the first nine months
   of 1996, operating activities contributed $43.2 million of cash.  Cash
   provided by working capital changes totaled $2.3 million.

   Investing activities used $15.4 million for the first nine months which
   included $16.2 million in capital expenditures.  Financing activities used
   cash of $21.0 million which included repurchase of stock of $18.6
   million and dividend payments of $3.0 million.  

   On July 18, 1996, the Company announced that the Board of Directors had
   authorized management to repurchase up to 10% of the Company's outstanding 
   common stock.  Such repurchases are expected to be made principally through
   open market transactions from time to time as the share price and market
   conditions warrant.  The Company intends to fund any such repurchases with
   cash from operations and additional short-term borrowings.  The repurchase
   program is not expected to materially impact the Company's liquidity.  As
   of September 29, 1996, the Company had repurchased 1,495,000 shares at an
   aggregate purchase price of $18.6 million.  

   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.



   Item 6.     Exhibits and Reports on Form 8-K

               (a)  Exhibits
                       
                       27    Financial Data Schedule (EDGAR Version only)


               (b)  Reports on Form 8-K

                    The Company filed no Current Reports on Form 8-K during
                    the quarter ended September 29, 1996.

   <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:   November 13, 1996              /s/ Joseph R. Coppola              
                                          Joseph R. Coppola
                                          Chairman and Chief Executive
                                          Officer



   Date:   November 13, 1996              /s/ Richard C. Kleinfeldt          
                                          Richard C. Kleinfeldt
                                          Vice-President - Finance 
                                          (Chief Financial and Accounting 
                                           Officer)

   <PAGE>

                                  EXHIBIT INDEX


   Exhibit No.           Exhibit Description

      27          Financial Data Schedule (EDGAR Version only)