UNITED STATES
             SECURITIES AND EXCHANGE COMMISSION
                   WASHINGTON, D.C. 20549
                          FORM 10-Q



(Mark one)
 (X) Quarterly Report Pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934
  For the quarterly period ended March 30, 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: 1-7568
                              
                              
                              
                    COLTEC INDUSTRIES INC
   (Exact name of registrant as specified in its charter)
                              
        PENNSYLVANIA                  13-1846375
(State or other jurisdiction of incorporation        (IRS
           Employer
           or organization)
           Identification No.)

      3 Coliseum Centre
    2550 West Tyvola Road
  Charlotte, North Carolina 28217                    28217
(Address of principal executive offices)          (Zip code)


                        (704)423-7000
    (Registrant's telephone number, including area code)
                              
                              
  Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Sections 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 ( )



          ________________________________________
                              
                              
  On April 30, 1997, there were outstanding 65,665,068 shares of
common stock, par value $.01 per share.



PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements


           COLTEC INDUSTRIES INC AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF EARNINGS
                              
                              
                              
                                               Three Months Ended
                                               ------------------
                                              March 30,       March 31,
                                                1997            1996
                                              --------         --------
                                   (In thousands, except per share data)

Net sales                                     $309,172         $281,198
Cost of sales                                  211,675          208,016
Gross profit                                    97,497           73,182
Selling and administrative                      52,569           51,851

Operating income                                44,928           21,331

Interest expense, net                           12,364           21,126

Earnings from continuing operations
  before income taxes and
  extraordinary item                            32,564              205

Income taxes                                    11,072               78
Earnings from continuing operations
  before extraordinary item                     21,492              127

Discontinued operations (net of tax)                 -            7,649

Extraordinary item (net of tax)                      -           (1,822)

Net earnings                                   $21,492           $5,954

Earnings per common share
  Before extraordinary item                      $ .32            $   -
  Discontinued operations                            -              .11
  Extraordinary item                                 -             (.02)

Net earnings                                     $ .32            $ .09

Weighted average number of common
  and common equivalent shares                  67,731           70,187



See notes to consolidated financial statements.


                              
                              
                              
           COLTEC INDUSTRIES INC AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEETS
                              
                              

                                                  March 30,   Dec. 31,
                                                     1997       1996
                                                  ---------   -------
                                                     (In thousands)

A S S E T S
Current assets:
  Cash and cash equivalents                          $7,813    $15,029
  Accounts and notes receivable, net of
     allowance of $2,053 in 1997 and $2,007 in 1996 195,365    190,325
  Inventories
     Finished goods                                  46,336     48,813
     Work in process and finished parts             136,271    122,817
     Raw materials and supplies                      27,930     32,568
                                                    210,537    204,198
  Deferred income taxes                              11,616     10,524
  Other current assets                               16,469     12,769
       Total current assets                         441,800    432,845
Property, plant and equipment, net                  219,679    214,790

Costs in excess of net assets acquired, net         131,484    132,872

Other assets                                         58,924     58,869
                                                   $851,887   $839,376
                     
                     
See notes to consolidated financial statements.














                              
                              
                              
                              
                              
                              
                              
                              
                              
           COLTEC INDUSTRIES INC AND SUBSIDIARIES
                 CONSOLIDATED BALANCE SHEETS

                                                     March 30,  Dec. 31,
                                                        1997      1996
                                                      ---------  -------
                                           (In thousands, except share data)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                         $527    $2,528
  Accounts payable                                        68,365    55,410
  Accrued expenses                                       145,160   145,104
  Current portion of liabilities oF 
    discontinued operations                               10,529    14,229
         Total current liabilities                       224,581   217,271
Long-term debt                                           730,752   717,722
Deferred income taxes                                     57,274    50,646
Other liabilities                                         89,299   100,004
Liabilities of discontinued operations                   163,690   170,740
Commitments and contingencies

Shareholders' equity:
  Preferred stock, $.01 par value,
    2,500,000 shares authorized,
    shares outstanding - none                                 -         -
  Common stock, $.01 par value,
    100,000,000 shares authorized, 70,447,919 and
    70,398,661 shares issued at March 30, 1997
    and December 31, 1996, respectively (excluding
    25,000,000 shares held by a wholly owned
    subsidiary)                                            704         704
  Capital surplus                                      644,248     643,221
  Retained deficit                                    (985,411) (1,006,903)
  Unearned compensation                                 (2,828)     (2,136)
  Minimum pension liability                             (3,200)     (3,200)
  Foreign currency translation adjustments              (2,261)     (1,151)
                                                      (348,748)   (369,465)
  Less cost of 3,961,753 and 3,182,822 shares
     of common stock in treasury at
     March 30, 1997 and December 31, 1996,
     respectively                                      (64,961)    (47,542)

                                                      (413,709)   (417,007)

                                                      $851,887    $839,376



See notes to consolidated financial statements.

                              
                              
                              
                              
           COLTEC INDUSTRIES INC AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (In thousands)
                              
                              
                                              Three Months Ended
                                              ------------------
                                             March 30,    March 31,
                                               1997          1996
                                             ---------     --------
Cash flows from operating activities:
  Net earnings                                 $21,492       $5,954
 Adjustments to reconcile net earnings to cash
   provided by operating activities:
   Extraordinary item                                -        2,759
   Depreciation and amortization                 8,511       11,167
   Deferred income taxes                         5,536          886
   Payments of liabilities of discontinued
     operations                                (10,750)        (246)
   Other operating items                       (10,033)      (3,349)
   Changes in assets and liabilities:
      Accounts and notes receivable             (5,040)     (20,386)
      Inventories                               (6,339)      (1,916)
      Other current assets                      (3,700)        (295)
      Accounts payable                          12,995        2,993
      Accrued expenses                              56       35,086
 
         Cash provided by operating activities  12,728       32,653
 
Cash flows from investing activities:
  Capital expenditures                         (13,554)     (11,188)

          Cash used in investing activities    (13,554)     (11,188)

Cash flows from financing activities:
  Increase in revolving facility, net           14,000       32,000
  Purchase of treasury stock                   (17,419)           -
  Repayment of long-term debt                   (2,971)     (50,823)

          Cash used in financing act            (6,390)     (18,823)

Increase (decrease)in cash and cash equivalents (7,216)       2,642
Cash and cash equivalents - beginning of period 15,029        3,971

Cash and cash equivalents - end of period       $7,813       $6,613

Supplemental cash flow data:
  Cash paid for interest                       $11,024       $6,825
  Cash paid (refunded) for income taxes        (11,140)       2,689



See notes to consolidated financial statements.


           COLTEC INDUSTRIES INC AND SUBSIDIARIES
         Notes to Consolidated Financial Statements
                   (Dollars in thousands)
1.SUMMARY OF ACCOUNTING POLICIES

     
  Financial Information: The unaudited consolidated financial
  statements included herein reflect in the opinion of management
  of Coltec Industries Inc (the Company) all normal recurring
  adjustments necessary to present fairly the consolidated
  financial position and results of operations for the periods
  indicated.  The unaudited consolidated financial statements
  have been prepared in accordance with the instructions to Form
  10-Q and do not include all of the information and footnotes
  required by generally accepted accounting principles for
  complete financial statements.  The Consolidated Balance Sheet
  as of December 31, 1996 has been extracted from the audited
  consolidated financial statements as of that date.  For further
  information, refer to the consolidated financial statements and
  footnotes included in the Company's annual report to
  shareholders for the year ended December 31, 1996.
                              
2. DISCONTINUED OPERATIONS

  In June 1996, the Company sold Holley Automotive, Coltec
  Automotive and Performance Friction Products to Borg-Warner
  Automotive, Inc.  In December 1996, the Company sold Farnam
  Sealing Systems Division to Meillor SA.  The sale of these
  businesses represented a disposal of the Company's Automotive
  Segment.  Accordingly, the Consolidated Statement of Earnings
  for the first quarter of 1996 has been restated to reflect the
  operations of the automotive original equipment components
  businesses as a discontinued operation.
  
  Liabilities of discontinued operations at March 30, 1997 of
  $174,219 relate to contingent contractual obligations,
  environmental matters, reserves for postretirement benefits and
  other future estimated costs for various discontinued
  operations.
    
3.EXTRAORDINARY ITEM

  The Company incurred an extraordinary charge of $1,822, net of
  income taxes of $937, in the first quarter of 1996 in
  connection with early retirement of debt.

4. COMMITMENTS AND CONTINGENCIES

  The Company and certain of its subsidiaries are defendants in
  various lawsuits, including actions involving asbestos-
  containing products and certain environmental proceedings.
     
  With respect to asbestos product liability and related
  litigation costs, as of March 30, 1997, two subsidiaries of the
  Company were among a number of defendants (typically 15 to
  40)in approximately 96,800 actions (including approximately
  3,300 actions in advanced stages of processing) filed in
  various states by plaintiffs alleging injury or death as a
  result of exposure to asbestos fibers.  During the first three
  months of 1997, two subsidiaries of the Company received
  approximately 7,300 new actions compared to approximately
  10,500 new actions received during the first three months of
  1996.  Through March 30, 1997, approximately 181,000 of the



           COLTEC INDUSTRIES INC AND SUBSIDIARIES
         Notes to Consolidated Financial Statements
                   (Dollars in thousands)
  
  approximately 277,800 total actions brought have been settled
  or otherwise disposed of.
     
  The damages claimed for personal injury or death vary from case
  to case, and in many cases plaintiffs seek $1,000 or more in
  compensatory damages and $2,000 or more in punitive damages.
  Although the law in each state differs to some extent, it
  appears, based on advice of counsel, that liability for
  compensatory damages would be shared among all responsible
  defendants, thus limiting the potential monetary impact of such
  judgments on any individual defendant.
  
  Following a decision of the Pennsylvania Supreme Court, in a
  case in which neither the Company or any or its subsidiaries
  were parties, that held insurance carriers are obligated to
  cover asbestos-related bodily injury actions if any injury or
  disease process, from first exposure through manifestation,
  occurred during a covered policy period (the "continuous
  trigger theory of coverage"), the Company settled litigation
  with its primary and most of its first-level excess insurance
  carriers, substantially on the basis of the Court's ruling.
  The Company has negotiated a final agreement with most of its
  excess carriers that are in the layers of coverage immediately
  above its first layer.  The Company is currently receiving
  payments pursuant to this agreement.  The Company believes
  that, with respect to the remaining carriers, a final agreement
  can be achieved without litigation and on substantially the
  same basis that it has resolved the issues with its other
  carriers.  Settlements are generally made on a group basis with
  payments made to individual claimants over periods of one to
  four years.  Payments were made with respect to asbestos
  liability and related costs aggregating $20,191 and $15,187 for
  the first three months of 1997 and 1996, respectively,
  substantially all of which were covered by insurance.  Related
  to payments not covered by insurance, the Company recorded
  charges to operations amounting to $2,000 and $2,375 for the
  first three months of 1997 and 1996, respectively.
  
  In accordance with the Company's internal procedures for the
  processing of asbestos product liability actions and due to the
  proximity to trial or settlement, certain outstanding actions
  have progressed to a stage where the Company can reasonably
  estimate the cost to dispose of these actions.  As of March 30,
  1997, the Company estimates that the aggregate remaining cost
  of the disposition of the settled actions for which payments
  remain to be made and actions in advanced stages of processing,
  including associated legal costs, is approximately $57,404 and
  the Company expects that this cost will be substantially
  covered by insurance.
  
  With respect to the 93,500 outstanding actions as of March 30,
  1997, which are in preliminary procedural stages, the Company
  lacks sufficient information upon which judgments can be made
  as to the validity or ultimate disposition of such actions,
  thereby making it difficult to estimate with reasonable
  certainty the potential liability or costs to the Company.
  When asbestos actions are received, they are typically
  forwarded to local counsel to ensure that the appropriate
  preliminary procedural response is taken.  The complaints
  typically do not contain sufficient information to permit a
  reasonable evaluation as to their merits at the time or
  receipt, and in jurisdictions encompassing a majority of the
  outstanding actions, the


           COLTEC INDUSTRIES INC AND SUBSIDIARIES
         Notes to Consolidated Financial Statements
                   (Dollars in thousands)
                              
  practice has been that little or no discovery or other action
  is taken until several months prior to the date set for trial.
  Accordingly, the Company generally does not have the
  information necessary to analyze the actions in sufficient
  detail to estimate the ultimate liability or costs to the
  Company, if any, until the actions appear on a trial calendar.
  A determination to seek dismissal, to attempt to settle or
  proceed to trial is typically not made prior to the receipt of
  such information.
     
  It is also difficult to predict the number of asbestos lawsuits
  that the Company's subsidiaries will receive in the future.
  The Company has noted that, with respect to recently settled
  actions or actions in advanced stages of processing, the mix of
  the injuries alleged and the mix of the occupations of the
  plaintiffs have been changing from those traditionally
  associated with the Company's asbestos-related actions.  The
  Company is not able to determine with reasonable certainty
  whether this trend will continue.  Based upon the foregoing,
  and due to the unique factors inherent in each of the actions,
  including the nature of the disease, the occupation of the
  plaintiff, the presence or absence of other possible causes of
  a plaintiff's illness, the availability of legal defenses, such
  as the statute of limitations or state of the art, and whether
  the lawsuit is an individual one or part of a group, management
  is unable to estimate with reasonable certainty the cost of
  disposing of outstanding actions in preliminary procedural
  stages or of actions that may be filed in the future.  However,
  the Company believes that its subsidiaries are in a favorable
  position compared to many other defendants because, among other
  things, the asbestos fibers in its asbestos-containing products
  were encapsulated.  Considering the foregoing, as well as the
  experience of the Company's subsidiaries and other defendants
  in asbestos litigation, the likely sharing of judgments among
  multiple responsible defendants, and the substantial amount of
  insurance coverage that the Company expects to be available
  from its solvent carriers, the Company believes that pending
  and reasonably anticipated future actions are not likely to
  have a material effect on the Company's consolidated results of
  operations and financial condition.
  
  Although the insurance coverage which the Company has is
  substantial, it should be noted that insurance coverage for
  asbestos claims is not available to cover exposures initially
  occurring on and after July 1, 1984.  The Company's
  subsidiaries continue to be named as defendants in new cases,
  some of which allege initial exposure after July 1, 1984.
  
  In addition to claims for personal injury, the Company's
  subsidiaries have been involved in an insignificant number of
  property damage claims based upon asbestos-containing materials
  found in schools, public facilities and private commercial
  buildings.  Based upon proceedings to date, the overwhelming
  majority of these claims have been resolved without a material
  adverse impact on the Company.  Likewise, the insignificant
  number of claims remaining to be resolved are not expected to
  have a material effect on the Company's consolidated results of
  operations and financial condition.
  
  The Company has recorded an accrual for its liabilities for
  asbestos-related matters that are deemed probable and can be
  reasonably estimated (settled actions and actions in advanced
  stages of processing), and has separately
  


           COLTEC INDUSTRIES INC AND SUBSIDIARIES
         Notes to Consolidated Financial Statements
                   (Dollars in thousands)
  
  recorded an asset equal to the amount of such liabilities that
  is expected to be recovered by insurance.  In addition, the
  Company has recorded a
  receivable for that portion of payments previously made for
  asbestos product liability actions and related litigation costs
  that is recoverable from its insurance carriers.  Liabilities
  for asbestos-related matters and the receivable from insurance
  carriers included in the Consolidated Balance Sheets are as
  follows:
     
                                      March 30,       Dec. 31,
                                         1997           1996
_________________________________________________________________
       Accounts and notes receivable   $57,545         $67,012
       Other assets                     16,621          18,728
       Accrued expenses                 49,292          60,659
       Other liabilities                 8,112          10,879
     
  With respect to environmental proceedings, the Company has been
  notified that it is among the Potentially Responsible Parties
  under federal  environmental laws, or similar state laws, relative 
  to the costs of investigating and in some cases remediating
  contamination by hazardous materials at several sites.  Such
  laws impose joint and several liability for the costs of
  investigating and remediating properties contaminated by
  hazardous materials.  Liability for these costs can be imposed
  on present and former owners or operators of the properties or
  on parties who generated the wastes that contributed to the
  contamination.  The Company's policy is to accrue environmental
  remediation costs when it is both probable that a liability has
  been incurred and the amount can be reasonably estimated.
  While it is often difficult to reasonably quantify future
  environmental-related expenditures, the Company currently
  estimates its future non-capital expenditures related to
  environmental matters to range between $27,000 and $52,000.  In
  connection with these expenditures, the Company has accrued
  $33,862 at March 30, 1997, representing management's best
  estimate of probable non-capital environmental expenditures.
  These non-capital expenditures are estimated to be incurred
  over the next 10 to 20 years.  In addition, capital
  expenditures aggregating $5,000 may be required during the next
  two years related to environmental matters.  Although the
  Company is pursuing insurance recovery in connection with
  certain of these matters, no receivable has been recorded with
  respect to any potential recovery of costs in connection with
  any environmental matters.
     
5. Subsequent Event

  In April 1997, the Company signed a letter of intent to acquire
  AMI Industries Inc. (AMI), a Colorado-based manufacturer of
  flight attendant and cockpit seats for commercial aircraft.
  The transaction, subject to normal closing conditions, is
  expected to close in June 1997.  AMI expects 1997 sales to
  approach $30 million.
                              
                              
                              
                              
                              
                              
           COLTEC INDUSTRIES INC AND SUBSIDIARIES
                         
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations

The following table shows financial information by industry
segment for the three months ended March 30, 1997 and March 31,
1996.
     
     
                                        Three Months Ended
                                       --------------------
                                       March 30,   March 31,
                                           1997     1996
                                        --------   --------
                                          (In thousands)
 
          Sales:
            Aerospace                  $119,140     $93,293
            Industrial                  190,099     188,406
            Intersegment elimination        (67)       (501)

            Total                      $309,172    $281,198

          Operating income:
            Aerospace                   $18,303     $(4,221)
            Industrial                   36,270      36,878
            Total segments               54,573      32,657
            Corporate unallocated        (9,645)    (11,326)
            Operating income            $44,928     $21,331


Operating income for the first quarter 1996 included a charge of
$14.2 million relating to the bankruptcy of a major aerospace
customer (Fokker).  Excluding this charge, first quarter 1996
operating income for the Aerospace Segment and the Company would
have been $10.0 million and $35.6 million, respectively.

Results of Operations - First Quarter 1997 Compared to First
Quarter 1996
                              
Company Review

Net sales for the first quarter of 1997 increased 9.9% to
$309.2 million from $281.2 million for the first quarter of
1996 primarily driven by increases in the Aerospace Segment.
Gross profit increased to $97.5 million for the first
quarter 1997 from $73.2 million in first quarter 1996.  The
increase in gross profit margin to 31.5% in the first
quarter 1997 from 26.0% in the first quarter 1996 resulted
from higher margins in the Aerospace Segment and the first
quarter 1996 impact of the bankruptcy of Fokker.  Selling
and administrative expenses totaled $52.6 million, or 17.0%
of sales, in first quarter of 1997 compared to $51.9
million, or 18.4% of sales (16.2% excluding the Fokker
impact), in first quarter 1996.

Operating income increased to $44.9 million in first quarter
1997 from $21.3 million in the first quarter of 1996.  The
1996 amount includes the effect of the $14.2 million charge
relating to the Fokker bankruptcy.  Operating margin for
first quarter 1997 was 14.5% compared to 7.6% for the first
quarter 1996 (12.7% excluding the effect of
  

           COLTEC INDUSTRIES INC AND SUBSIDIARIES

Fokker).  The margin increase related to the same reasons as
those stated to explain the increase in gross profit margin.
    
Interest expense decreased to $12.4 million in the first
quarter 1997 from $21.1 million for the first quarter 1996.
The 41% decrease was a direct result of significant debt
reduction in June 1996 and the December 1996 refinancing of
substantially all of the Company's high-cost fixed-rate debt
with lower-cost, variable-rate bank debt.
    
The results of discontinued operations for  first quarter
1996 reflect the net earnings for that period for the
automotive original equipment components operations which
were sold in 1996.

The first quarter 1996 extraordinary item represents the net
charge for refinancing  a portion of the Company's fixed-
rate debt  with lower-cost, variable-rate bank debt.

As a result of the foregoing, net earnings were $21.5
million in first quarter 1997, or $0.32 per share, compared
to net earnings of  $6.0 million, or $0.09 per share, in
first quarter 1996.  1997 earnings from continuing
operations were $21.5 million versus $127,000 for 1996.  The
1996 charge related to Fokker decreased net earnings by
$0.13 per share while the decrease in interest expense
increased 1997 earnings by $0.09 per share.
    
Segment Review - Aerospace

Sales in first quarter 1997 for the Aerospace Segment
totaled $119.1 million increasing 27.7% from $93.3 million
in the first quarter 1996.  At Menasco, sales increased
significantly due to rising commercial aircraft production
as well as improved military sales.  Menasco deliveries of
main landing gear systems for the Boeing 737 increased from
8 shipsets in first quarter 1996 to 30 shipsets in first
quarter 1997 while military sales benefited primarily from
higher shipset deliveries for the F-15 and F-16 programs.
At Chandler Evans, significantly higher sales were primarily
due to higher sales of spare parts and increased shipments
of spare engine control units for Boeing Chinook helicopters
used by the Royal Air Force while original equipment sales
also improved. Walbar's Arizona facility experienced
significant sales increases due to a change in the billing
practices for consigned inventory, which had no effect on
profitability, while also benefiting from increased
commercial aircraft production.

Operating income for the Aerospace Segment increased to
$18.3 million in first quarter 1997 from an operating loss
of $4.2 million in first quarter of 1996.  The 1996 amount
includes the effect of the $14.2 million charge relating to
the Fokker bankruptcy.  Excluding such charge, operating
margin for first quarter 1996 would have been 10.8%
compared to 15.4% for the first quarter 1997.  At Menasco's
Aerospace Division, operating margin was impacted by a
favorable mix of landing gear systems for certain commercial
airline programs as well as improved
manufacturing efficiencies due to higher production.
Chandler Evans realized higher margins due to a higher
profit sales mix and selling price increases for certain
products.  The increase was also driven

           COLTEC INDUSTRIES INC AND SUBSIDIARIES

by generally higher sales volumes and improved margins for
the Segment's other businesses.

Segment Review - Industrial

Industrial sales increased slightly to $190.1 million in
first quarter 1997 from $188.4 million in first quarter
1996. The Garlock Bearings, Stemco, Delavan Commercial,
France Compressor Products and Quincy Compressor Divisions
all experienced solid sales volume increases. Sales for
Garlock Sealing Technologies increased slightly primarily
due to selling price increases and new product sales.
Fairbanks Morse Engine sales decreased due to a large
nonrecurring engine order in first quarter 1996.  Holley
Performance Products sales also decreased due to curtailed
orders by two major customers.

Operating income for the Industrial Segment was essentially
unchanged at $36.3 million in first quarter 1997 compared to
$36.9 million in first quarter 1996. Operating income
increased for the Stemco, Delavan Commercial and Quincy
Compressor Divisions due to higher sales volumes.  Operating
results at Fairbanks Morse Engine and Holley Performance
Products were lower due to decreased sales volumes while
Garlock Sealing Technologies was impacted by increased costs
related to various international initiatives.
    
Liquidity and Capital Resources

The Company generated $12.7 million of operating cash flows
in first quarter 1997 compared with $32.7 million for the
first quarter 1996.  The lower operating cash flows in 1997
were primarily due to increased payments related to
liabilities of discontinued operations and payments related
to asbestos claims. The change in assets and liabilities
generated negative cash flow of $2.0 million in first
quarter 1997  compared to positive cash flow of $15.5
million in first quarter 1996. Increased 1997 net earnings
of $15.5 million helped to partially offset the
aforementioned decreases. The current ratio of current
assets to current liabilities at March 30, 1997 was 1.97,
virtually unchanged from 1.99 at December 31, 1996.  Cash
and cash equivalents decreased to $7.8 million at March 30,
1997 from $15.0 million at December 31, 1996.

In first quarter 1997 the Company invested $13.6 million in
capital expenditures compared to $11.2 million during the
same prior year period.  Debt increased by $11.0 million at
March 31, 1997 compared to December 31, 1996 through
additional borrowings under the Company's revolving credit
facility.  The increased borrowings were used to repurchase
916,500 shares of the Company's common stock at a cost of
$17.4 million.

     
                              
                              
                              
                              
                              
                              
                              
           COLTEC INDUSTRIES INC AND SUBSIDIARIES
     
     
     PART II - OTHER INFORMATION
     Item 1. Legal Proceedings.
     
            The Company and certain of its subsidiaries are
            defendants in various lawsuits involving asbestos-
            containing products.  In addition, the Company has
            been notified that it is among Potentially
            Responsible Parties under federal environmental
            laws, or similar state laws, relative to the costs
            of investigating and in some cases remediating
            contamination by hazardous materials at several
            sites.  See note 4 to consolidated financial
            statements.
     
     Item 6. Exhibits and Reports on Form 8-K.
     
          (a) 10.1  First Restated Employment Agreement between Coltec 
                    and Robert J. Tubbs dated as of January 10, 1997.

              27.1  Consolidated Financial Data Schedule.

          (b) No reports on Form 8-K were filed by the Company  
              during the quarter ended March 30, 1997.
     

     

     

     

     
     

     

     

     

     

     

     

     

     

     

     

     

                              
                              
                              
                              
                              
                      S I G N A T U R E
                              
                              
                              
                              
     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.

     

                                    COLTEC INDUSTRIES INC
                                        (Registrant)
  
  
                                  by  David D. Harrison
  
                                      David D. Harrison
                                      Executive Vice President
                                      and Chief Financial Officer
                                                                 






Date: May 12, 1997



Exhibit 10.1


             FIRST RESTATED EMPLOYMENT AGREEMENT
                              
  This Agreement between Robert J. Tubbs ( the "Executive")
and Coltec Industries Inc, a Pennsylvania corporation (the
"Corporation"), is restated as of this 10th day of January,
1997 (the Restatement Date") as if originally entered into
and effective as of June 1, 1995,

  WHEREAS, the Executive and the Corporation entered into
an Employment Agreement dated June 1 1995 (the "Employment
Agreement"), and

  WHEREAS,  the Executive received a promotion and change
of position and title by election of the Board of Directors
of the Corporation on January 9, 1997, which change of
position necessitates the making of certain changes to the
Employment Agreement to reflect the Executive's new position
and title, and

  WHEREAS,  the Corporation and the Executive wish to
modify the Employment Agreement to reflect the changes to
Executive's position and title and do hereby do so by
incorporating all such changes thereto herein in this  First
Restated Employment Agreement to be effective as if
originally entered into on June 1, 1995 (the "Effective
Date" ).

  NOW, THEREFORE, in consideration of the foregoing and the
mutual promises herein contained, the parties agree  as
follows:

1.Employment Term

     The Corporation agrees to employ the Executive and the
     Executive agrees to be employed by the Corporation,
     upon the terms and conditions contained in this
     Restated Agreement, for a period of four years
     commencing on the Effective Date and terminating on the
     fourth anniversary of the Effective Date (the "Contract
     Period")   The Contract Period shall be subject to
     earlier termination in accordance with the provisions
     set forth in Section 5 below.

2.Duties

     2.1 The Executive shall serve, subject to the
     supervision and control of the Corporation's Chief
     Executive Officer, as Executive Vice President, General
     Counsel and Secretary of the Corporation with the
     responsibilities and authority, and status and
     perquisites which have consistent with past practice,
     been delegated or granted by the Corporation to an
     employee holding such position(s) or which are
     customarily delegated or granted by similarly situated
     corporations to an employee holding such position(s).
     If Executive is appointed to additional offices by the
     Corporation during  the Contract Period, the Executive
     shall have the responsibilities and authority, and
     status and perquisites consistent with the past
     practices of the Corporation or which are customarily
     delegated or granted by similarly situated corporations
     to an employee holding such position(s).   Executive
     shall also perform any additional lawful  services  and
     assume  any  reasonable  additional responsibilities,
     not inconsistent with his position, as shall from time
     to time be assigned to him by the Board of Directors of
     the Corporation (the "Board") or the Chief Executive
     Officer.

     2.2 Executive agrees that during the Contract Period,
     he shall devote substantially all of his full working
     time and attention and give his best effort, skill and
     abilities exclusively to the business and interests of
     the Corporation; provided, however, that the foregoing
     shall not be construed to prohibit Executive's service
     as a (i) director or officer of any trade association,
     civic, educational or charitable organization or
     governmental entity or, subject to approval by the
     Board, as (ii) a director of any corporation which is
     not a competitor of the Corporation, provided that such
     service by Executive does not materially interfere with
     the performance by Executive of the responsibilities
     delegated under Section 2.1 above.

     2.3 Executive shall carry out all responsibilities
     delegated in Section 2.1 above at the Company's
     headquarters at 3 Coliseum Centre, 2550 West Tyvola
     Road, Charlotte, NC 28217 or at such other office or
     location within the continental United States as the
     Board may, from time to time, deem appropriate after
     consultation with Executive, except for travel
     reasonably required in the performance of Executive's
     responsibilities.

3.Compensation and Benefits

     Throughout the term hereof, unless otherwise
     specifically provided elsewhere herein:

     3.1 Executive shall receive an annual salary which is
     not less than his annual salary on the Resatement Date
     and shall have the opportunity for periodic increases
     in accordance with the Corporation's regular practices.

     3.2 Executive shall be entitled to participate, to the
     extent determined by the Board, in all currently
     existing (as of the Restatement Date) and future
     incentive compensation plans of the Corporation
     including, but not  limited to:  the Annual  Incentive
     Plan  for Certain Employees of Coltec Industries Inc
     and Its Subsidiaries, the 1994 Long-Term Incentive Plan
     of Coltec Industries Inc and the Coltec Industries Inc
     1992 Stock Option and Incentive Plan (the "Incentive
     Compensation Plans"),  provided, however, that the
     Executive's participation in all incentive compensation
     plans shall be at a level customarily approved by the
     Board for an employee with Executive's responsibilities
     and shall not  in  any  case  be  less  than
     Executive's  level  of participation in such plans on
     the Restatement Date. Any payment to Executive under an
     Incentive Compensation Plan shall be calculated and
     made in accordance with the provisions of the
     respective plan, except as elsewhere provided for in
     this Restated Agreement.

     3.3 Executive shall be entitled to receive all employee
     benefits, fringe benefits and perquisites (including
     but not limited to the use of company cars,  club
     memberships and financial planning services ("Company
     Perquisites")) customarily made available to an
     employee with Executive's responsibilities, and
     Executive  shall  be  entitled  to participate  in  all
     applicable  group,  life,  health,  disability and
     accident insurance plans and programs including, and
     not limited to, the Retirement Savings Plan, the
     Retirement Program, Benefits Equalization Plan (the "BE
     Plan") and Family Protection Plan as well as any other
     applicable Corporation benefit plans and programs
     maintained currently upon terms and at levels no less
     favorable than exist as of the Restement Date or that
     shall be established or maintained in the future for
     employees generally or for the Corporation's
     executives.

     3.4 Executive shall be entitled to annual vacation and
     holidays in accordance with the Corporation's
     established practice for its employees.

     3.5 The Executive shall be entitled to receive
     reimbursement for all reasonable out-of-pocket expenses
     incurred in performing his responsibilities delegated
     in Section 2.1 above, provided that the Executive
     properly accounts for such expenses in accordance with
     the Corporation's established policies and the
     requirements of the Internal Revenue Code of 1986, as
     amended.

4.Indemnification

     The Executive shall be entitled to indemnification by
     the Corporation to the fullest extent permitted by law
     in respect of any actions or omissions which Executive
     has taken or has failed to take as an employee, officer
     or director of the Corporation while carrying out the
     responsibilities delegated under Section 2.1 above.
     
     
     

5.Termination of Employment

     The Contract Period shall terminate prior to its term
     on the Date of Termination as defined in Sections 5,2
     or 5.3 below following receipt by the Executive or the
     Corporation, as the case may be, of a Notice of
     Termination as defined in Section 5.1 below.

     5.1 "Notice of Termination" shall mean any purported
     termination of Executive's employment by the
     Corporation or by Executive which shall be communicated
     by written notice to the other party hereto in
     accordance with Section 8 of this Restated Agreement,
     and  which  shall  (1)  indicate  the  specific
     termination provision in this Restated Agreement relied
     upon,  (2) set forth in reasonable detail the facts and
     circumstances claimed to provide a basis for
     termination of Executive's employment under the
     provision so indicated, and (3) set forth the date on
     which the Executive's employment with the Corporation
     shall terminate.

     5.2  "Date of Termination" shall mean:

     a)thirty (30) days after Notice of Termination is given for
      termination of employment due to Disability; provided that
      Executive shall not have returned to the full-time
      performance of his duties during such thirty (30) day
      period;
     
     b)the date of death in the event of Executive's death;
     
     c)at least thirty days (30) but not more than sixty (60)
      days after Notice of Termination is given for termination of
      employment for Good Reason in respect of a termination
      covered by Sections 6.6 or 6.7 below;
     
     d)at least fifteen days (15) after Notice of Termination is
      given for termination of employment for Cause;
     
     e)at least fifteen days  (15)  after Notice of Termination
      is given for retirement after the age of 55 years but before
      the age of 65 years to the extent such retirement is
      permitted  under  the  Retirement  Savings  Plan,  the
      Retirement Program or the BE Plan ("Early Retirement"); or
     
     f)the  date  specified  in  the  Notice  of  Termination
      for termination of employment for any other reason.

     5.3  This Restated Agreement shall automatically
     terminate upon the earlier of Executive's 65th birthday
     or the receipt by the Corporation of a Notice of
     Termination for Early Retirement as provided in
     Paragraph 5.2(e) above ("Retirement Termination")

6.     Compensation Upon Termination or During Disability

     6.1 For purposes of this Restated Agreement,
     "Disability", "Cause", "Good Reason" and "Change-in-
     Control'' shall have the meanings set forth below:

     a)Disability - If, as a result of Executive's incapacity
      due to physical or mental illness, Executive shall have
      become eligible for benefits under the applicable long-term
      disability plan or policy of the Corporation, Executive 's
      employment  may  be  terminated  by  the Corporation for
      "Disability".
     
     b)Cause - Termination by the Corporation of Executive's
      employment for "Cause" shall mean termination upon:

        i.the prolonged or repeated absence from duty without the
         consent of the Board for reasons other than the Executive's
         incapacity due to physical or mental illness;
        
        ii.  the acceptance by Executive of a position with another
         employer which conflicts with his duties as an employee of
         the Corporation without the consent of the Board;
        
        iii. the  willful  engaging  by Executive  in  conduct
         relating to the Corporation which is demonstrably and
         materially injurious to the Corporation after a written
         demand for cessation of such conduct is delivered to
         Executive by the Board, which demand specifically identifies
         the manner in which the Board believes the Executive has
         engaged in such conduct and the injury to the Corporation;
        
        iv.  a willful material breach of an established written
         policy or procedure of the Corporation;
        
        v. Executive's conviction for a crime involving moral
         turpitude; or
        
        vi)     the breach of Executive's Restated Agreement set
          forth in Section 10.1 below.

     For purposes of this Paragraph, no act, or failure to
     act, on Executive's part shall be deemed "willful"
     unless knowingly done, or omitted to be done, by
     Executive not in good faith and without  reasonable
     belief  that Executive's action or omission was in the
     best interests of the Corporation.

     a)Good Reason - Executive shall be entitled to terminate
      his employment for Good Reason.  For purposes of this
      Restated Agreement ,  "Good Reason" shall mean the
      occurrence, without Executive's express written consent, of
      any of the following circumstances unless such circumstances
      are fully corrected prior to the Date of Termination (as
      defined in Section 5.2 above), specified in the Notice of
      Termination :

        i.the  terms  of  this  Restated Agreement  are materially
         adversely altered by action of the Corporation or the
         Corporation breaches in any material respect any of its
         agreements set forth herein;
        
        ii.  the   failure  of  the  Corporation  to  obtain  a
         satisfactory  agreement,  required  in  Section  8 below,
         from any successor to assume and perform this Restated
         Agreement (a copy of the agreement evidencing such
         assumption  shall  be  provided  by  the Corporation to
         Executive);
        
        iii. any purported termination of Executive's employment
         which is not effected pursuant to a Notice of Termination
         satisfying the requirements set forth in Section 5 above;
         for purposes of this Restated Agreement, no such purported
         termination shall be effective; or
        
        iv.  Executive makes a determination in good faith that the
         cumulative effect of actions by the Chief Executive Officer
         of the Corporation or one or more of the  members  of  the
         Board or their  agents  or associates constitutes harassment
         or unreasonable interference with the performance of
         Executive's day-to-day duties under this Restated Agreement
         (after a written demand for cessation of such actions is
         delivered by  Executive  to  the  Chief Executive Officer
         and to the Board which demand specifically identifies the
         manner in which Executive believes that such Chief Executive
         Officer or Board members (Or  their  agents  or  associates)
         have  harassed Executive  or   unreasonably   interfered
         with Executive's  ability  to perform his  day-to-day
         duties) ;  provided,   however,   that  appropriate
         involvement of the Chief Executive Officer or the Board
         members in regular reviews of those items which have,
         consistent with the Corporation's past practices, been
         normally within the purview of the Chief Executive Officer
         or Board's responsibilities as well as any bona fide
         business disagreements between the Executive and the
         Corporation shall not be taken into account by Executive in
         making his determination under this Restated Agreement.
        
        v.Relocation of the Executive's place of employment to a
         location outside the continental United States or
         relocation  of  the  Executive 's  place  of employment
         within the continental United States without  reimbursing
         Executive  his   cost   of relocation at a level at least as
         favorable as that provided  under  the  Corporation' s
         policy  and practice in effect on the date of this Restated
         Agreement.

     Executive's right to terminate his employment pursuant
     to this Paragraph shall not be affected by his
     incapacity due to physical illness .   In addition,
     Executive ' s continued employment with the Corporation
     shall not constitute waiver of Executive's rights
     under this Paragraph (c) nor constitute consent to any
     act or omission by the Corporation constituting Good
     Reason.

     d)Change-in-Control  - A Change-in-Control shall be deemed
      to occur as of the date on which any of the following occur:

        i.the acquisition, other than from the Corporation, by any
         individual, entity or group (within the meaning of Section
         13 (d) (3)  or 14 (d) (2)  of the Securities and Exchange
         Act of 1934, as amended (the  "Exchange  Act")  of
         beneficial  ownership (within the meaning of Rule 13d-3
         promulgated under the Exchange Act) of 20 percent or more of
         either the then outstanding shares of common stock of the
         Corporation or the combined voting power of the then
         outstanding  voting  securities   of   the Corporation
         entitled  to vote  generally  in  the election of directors;
         or
        
        ii.  individuals who, as of the date of this Restated
         Agreement, constitute the Board (the "Incumbent Board")
         cease for any reason to constitute at least a majority of
         the Board, provided that any individual becoming a director
         subsequent to the Effective Date whose election, or
         nomination  for  election  by  the Corporation'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 as a member of the
         Incumbent Board, but excluding, for this purpose, any such
         individual whose initial assumption of office  is  in
         connection  with  an  actual  or threatened  election
         contest  relating  to  the election of the directors of the
         Corporation (as such terms are used in Rule 14a-ll of
         Regulation 14A promulgated under the Exchange Act); or
        
        iii. approval by the shareholders of the Corporation of (1)
         a reorganization,  merger or consolidation,  in each case,
         with respect to which the individuals and entities who were
         the respective beneficial owners of the common stock and
         voting securities of the   Corporation   immediately  prior
         to  such reorganization,  merger or consolidation do not,
         following   such   reorganization,  merger  or
         consolidation,  beneficially  own,  directly  or indirectly,
         more than 50 percent of, respectively, the then outstanding
         shares of common stock, 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 reorganization,
         merger or consolidation; (2) a complete liquidation or
         dissolution of the Corporation; or of (3) the sale or other
         disposition of all or substantially all of the assets of the
         Corporation.

     6.2 During any period of Disability and until the
     earlier of the end of the Contract Period or
     Executive's death, Executive shall receive all accrued
     but unpaid salary plus all amounts or benefits payable
     or due to him (including a pro rata share under
     Incentive Compensation Plans earned during the year in
     which  the  Disability  occurs)  under  the
     Corporation ' s compensation and benefit plans and
     programs in which Executive is participating at the
     commencement of any such period, plus an additional
     payment from the Corporation (if necessary) such that
     the aggregate amount received by Executive in the
     nature of salary continuation from all sources equals
     Executive's base salary at the rate in effect at the
     commencement of any such period .   Thereafter,
     Executive shall be entitled to participate in all
     applicable group, life, Family Protection Plan, health,
     disability and accident insurance plans and programs as
     well as any other applicable Corporation benefit plans
     and programs (including, but not limited to the 1992
     Stock Option and Incentive Plan) in accordance with the
     terms of such plans and programs; provided that such
     terms shall not be less advantageous to Executive than
     the terms in effect as of the Restatement Date.

     6.3 If Executive's employment shall be terminated by
     reason of Executive 's death, the Executive shall be
     entitled to the benefits provided below:

     a)The Corporation shall pay to Executive's estate as soon
      as practicable after the date of Executive's death,
      Executive's  full  base  salary  through  the  date  of
      Executive's death, at the rate in effect at the time of
      Executive ' s death,  plus all other amounts  to which
      Executive is entitled under any benefit or compensation plan
      of the Corporation including, but not limited to, a pro rata
      share under Incentive Compensation Plans earned during the
      year in which Employee's death occurs.
     
     b)After Executive's death, Executive's beneficiaries shall
      be entitled to participate in all applicable group, life,
      health,  disability and accident insurance plans and
      programs as well as any other applicable Corporation benefit
      plans and programs including, but not limited to, the 1992
      Stock Option and Incentive Plan, in accordance with the
      terms of such plans and programs.

     6.4 If Executive's employment shall be terminated as a
     result of a Retirement Termination or as a result of a
     voluntary resignation for other than Good Reason
     ("Resignation"), then Executive shall receive all
     accrued but unpaid salary plus all amounts payable to
     him under the Corporation's compensation (including,
     but not limited to a pro rata share under Incentive
     Compensation Plans earned during the year the
     Retirement Termination or Resignation occurs) and
     benefit plans and programs in which Executive is
     participating at the time the Retirement Termination or
     Resignation  becomes effective.    In the event of a
     Retirement Termination, Executive shall be entitled to
     participate in all retirement and other plans and
     programs effective on the Date of Termination to which
     he is eligible in accordance with their terms .

     6.5  If  Executive's  employment  shall  be  terminated
     by  the Corporation for Cause, then Executive shall be
     entitled to the following benefits:

     a)The Corporation shall pay Executive's full base salary
      through the Date of Termination at the rate in effect at the
      time Notice of Termination is given plus all other amounts
      to which Executive is entitled under any benefit or
      compensation plan of the Corporation, excluding any bonus,
      other incentive compensation and vacation pay, if any,
      otherwise payable to Executive pursuant to the terms of the
      applicable plan or program of the Corporation, at the time
      such payments are due.
     
     b)Executive  shall be entitled to participate  in  all
      applicable group, life, health, disability and accident
      insurance plans and programs, only to the extent required by
      the terms of such plans,  or only to the extent required by
      Federal or state law.

     6.6 If Executive's employment shall be terminated  (1)
     by the Corporation for other than Cause, (2) by
     Executive for Good Reason other than Good Reason as
     specified in Section 6.7 below ("Section 6.7 Good
     Reason") then Executive shall be entitled to the
     following benefits:

     a)The  Corporation  shall  pay  Executive,  as  soon  as
      practicable following the Date of Termination a sum equal to
      Executive's full base salary through the Date of Termination
      at the rate in effect at the time Notice of Termination is
      given plus all other amounts to which Executive is entitled
      under any benefit or compensation plan of the Corporation
      (including but not limited to a pro rata share under
      Incentive Compensation Plans earned during the year in which
      employment is terminated).
     
     b)The  Corporation  shall  pay  Executive  as  soon  as
      practicable  following  the  Date  of  Termination  an
      additional payment equal to the sum of Executive's full base
      salary plus the highest annual bonus received by the
      Executive or by any individual serving as Executive Vice
      President, General Counsel and Secretary of the Corporation
      during any of the three previous years multiplied by the
      higher of two (2) or the number of years (including
      fractions thereof) remaining under the Contract Period.
     
     c)At Executive's option and as soon as practicable after
      his request, the Corporation shall pay to Executive a sum of
      money equal to the value of Executive' s accrued balance of
      the BE Plan.
     
     d)For the longer of two years from the Date of Termination
      or until the end of the Contract Period the Corporation
      shall continue to make available to Executive all Company
      Perquisites, or,  in the alternative,  the Corporation shall
      pay to Executive as soon as practicable after Date of
      Termination a sum of money reasonably approximating the cash
      value of the Company Perquisites.  Additionally, for such
      period of time Executive shall,  subject to Section 6.9, be
      allowed to participate in all applicable group, life,
      health, disability and accident insurance plans and programs
      as well as any other applicable Corporation benefit plans
      and programs (including but not limited to the 1992 Stock
      Option and Incentive Plan) as if he were an active employee
      (limited, in the case of coverage under life insurance
      plans, to the leve1 of coverage that the Corporation is able
      to obtain on Executive's behalf based upon the annual
      premium cost of providing  Executive  with  life  insurance
      during Executive's last twelve months of employment with the
      Corporation), in which Executive was participating 30 days
      prior to the time Notice of Termination is given or
      comparable plans substituted therefor; provided, however,
      that if Executive is ineligible (e.g., by operation of law
      or the terms of the applicable plan) to continue to
      participate in any such plan, the Corporation will provide
      Executive with a comparable level of compensation or
      benefit.

     6.7 If  Executive's  employment  by  the  Corporation
     shall  be terminated by Executive for Good Reason where
     Executive has given Notice of Termination to the
     Corporation within two years from the occurrence of an
     event constituting a Change-of-Control, then Executive
     shall be entitled to the benefits provided below.

     a)The Corporation shall pay Executive his full base salary
      through the Date of Termination at the rate in effect at the
      time Notice of Termination is given, plus all other amounts
      to which Executive is entitled under any benefit or
      compensation plan of the Corporation (including but not
      limited  to  a  pro  rata  share  under  Incentive
      Compensation Plans earned during the year in which
      employment is terminated)
     
     b)In lieu of any further base salary payments to Executive
      for period subsequent to the Date of Termination, the
      Corporation shall pay to Executive as severance pay a lump
      sum equal to four times (4x) the sum of Executive's full
      base salary for one calendar year at the rate in effect
      immediately  prior  to  the  time  Notice  of Termination is
      given plus the highest annual bonus received by the
      Executive or any individual serving as Executive Vice
      President,  General Counsel and Secretary of  the
      Corporation during any of the three preceding calendar
      years.
     
     c)In lieu of any further participation by Executive in the
      Family Protection Plan, the Corporation shall transfer to
      Executive a fully paid up insurance policy or policies then
      insuring the life of the Executive pursuant to the terms of
      the Family Protection Plan, plus an amount of money (the
      "Tax Adjustment") calculated to reimburse Executive for any
      local, state or Federal income or other taxes which he may
      be liable as a result of receiving the insurance policy or
      policies and the Tax Adjustment amount.
     
     d)At Executive's option and as soon, as practicable after
      his request, the Corporation shall pay Executive a sum of
      money equal to the value of Executive's accrued balance of
      the BE Plan.
     
     e)For   four   years   from  the   Date   of   Termination
      the Corporation shall continue to make available to
      Executive all Company Perquisites, or, in the alternative ,
      the Corporation  shall  pay  to  Executive as  soon as
      practicable after the Date of Termination a sum of money
      reasonably approximating the cash value of the Company
      Perquisite.  Additionally, Executive shall, subject to
      Section 6.9, be allowed to participate in all applicable
      group, life, health, disability and accident insurance plans
      and programs as well as any other applicable Corporation
      benefit plans and programs (including, but not limited to
      the 1992 Stock Option and Incentive Plan) as if he were an
      active employee (limited, in the case of coverage under life
      insurance plans, to the level of coverage that the
      Corporation is able to obtain on Executive's behalf based
      upon the annual premium cost of providing  Executive  with
      life  insurance  during Executive's last twelve months of
      employment with the Corporation), in which Executive was
      participating 30 days prior to the time Notice of
      Termination is given or comparable plans substituted
      therefor; provided, however, that if Executive is ineligible
      (e.g., by operation of law or the terms of the applicable
      plan) to continue to participate in any such plan,  the
      Corporation will provide Executive with a comparable level
      of compensation or benefit.

     6.8 In addition to the benefits set forth in Sections
     6.6 and 6.7, in the event that Executive's employment
     shall be terminated (1)  by the Corporation for other
     than Cause,  (2)  by Executive for Good Reason other
     than Section 6.7 Good Reason, or (3) by Executive for
     Section 6.7 Good Reason then:

     a)The Company shall also pay to Executive all reasonable
      legal fees and expenses incurred by Executive as a result of
      such  termination  (including  all  such  fees  and
      expenses, if any, incurred in contesting or disputing any
      such termination (including cost associated with legal
      consultation even if no actual contest or dispute results)
      or in seeking to obtain or enforce any right or benefit
      provided by this Restated Agreement or in connection with
      any tax audit or proceeding to the extent attributable to
      the application of Section 4999 of the Internal Revenue Code
      of 1986, as amended (the "Code"), to any payment or benefit
      provided hereunder), except any such fees or expenses
      incurred by Executive in seeking to enforce a claim which is
      determined by an arbitrator, pursuant to Section 14 below,
      to have been frivolous in nature or not brought or pursued
      in good faith.
     
     b)In the event that Executive becomes entitled to payments
      under the provisions of either Section 6.6 or 6.7 (the
      "Severance Payments"), if Executive will be subject to the
      tax (the "Excise Tax") imposed by Section 4999 of the Code,
      the Corporation shall pay to Executive at the time or times
      specified in Paragraph (h) below, an additional amount (the
      "Gross-Up Payment") such that the net amount retained by
      Executive, after deduction of (i) any additional Excise Tax
      payable by Executive as a result of Executive's receipt of
      the Severance Payments and (ii) any additional federal,
      state and local income tax and Excise  tax  payable  by
      Executive  as  a  result  of Executive's receipt of the
      Gross-Up Payments shall be equal to the Severance Payments.
      For purposes of determining whether any of the Severance
      Payments will be subject to the Excise Tax and the amount of
      such Excise Tax, (i) the Severance Payments, payments
      provided for in this paragraph and any other payments  or
      benefits received or to be received by Executive in
      connection with  a  Change - in- Control  of  the
      Corporation  or Executive's termination of employment
      (whether pursuant to the terms of this Restated Agreement or
      any other plan, arrangement or agreement with the
      Corporation, any person whose actions result in a Change-in-
      Control or any person affiliated with the Corporation or
      such person) shall be treated as "parachute payments" within
      the meaning of Section 280G(b) (2) of the Code, and all
      "excess parachute payments" within the meaning of Section
      280G(b) (1) shall be treated as subject to the Excise Tax,
      unless and to the extent that in the opinion of tax counsel
      selected by the Corporation's independent auditors and
      acceptable to Executive, such other payments or benefits (in
      whole or in part) do not constitute parachute payments, or
      such excess parachute payments  (in whole or in part)  and
      represent reasonable compensation for services actually
      rendered within the meaning of Section 280G(b) (4) of the
      Code in excess of the base amount within the meaning of
      Section 280G(b) (3) of the Code, or are otherwise not
      subject to the Excise Tax,  (ii)  the amount of the
      Severance Payments which shall be treated as subject to the
      Excise Tax shall be equal to the lesser of (A) the total
      amount of the Severance Payments or (B) the amount of
      excess parachute payments within the meaning of Section
      280G(b) (1)  (after applying clause (i) above), (iii)  any
      payment pursuant to this Paragraph shall be treated as
      subject to the Excise Tax in its entirety and (iv)  the
      value of any non-cash benefits or any deferred payment  of
      benefit  shall  be  determined  by  the Corporation's
      independent auditors in accordance with the principles of
      Sections 280G(d) (3)'and (4) of the Code. For purposes of
      determining the amount of the Gross-Up Payment, Executive
      shall be deemed to pay federal income taxes at the highest
      marginal rate of federal income taxation in the calendar
      year in which the Gross-Up Payment is to be made and state
      and local income taxes at the highest marginal rate of
      taxation in the state and locality of  Executive  residence
      on  the  Date  of Termination, not of the maximum reduction
      in federal income taxes which could be obtained from
      deduction of such state and local taxes.  In the event that
      the Excise Tax is subsequently determined to be less than
      the amount taken into account hereunder at the time of
      termination of Executive's employment, Executive shall repay
      to the Corporation at the time that the amount of such
      reduction in Excise Tax is finally determined, the portion
      of the Gross-Up Payment attributable to such reduction (plus
      the portion of the Gross-Up Payment attributable to the
      Excise Tax and federal and state and local income tax
      imposed  on  the  Gross-Up  Payment  being  repaid  by
      Executive)  plus interest accrued from the date such Gross-
      Up Payment is made to Executive to the date of such
      repayment on the amount of such repayment at the rate
      provided in Section 1274(b) (2) (B) of the Code.  In the
      event that the Excise Tax is determined to exceed the amount
      taken into account hereunder at the time of the termination
      of Executive's employment  (including by reason of any
      payment the existence or amount of which cannot  be
      determined at  the time of  the Gross-Up Payment), the
      Corporation shall make an additional gross up payment in
      respect of such excess (plus any interest payable with
      respect to such excess) at the time that the amount of such
      excess is finally determined.
     
     c)The payments provided for in Paragraph (b) above shall be
      made at any time during the 90 day period preceding each due
      date for making payment of such Excise Taxes ; provided,
      however, that if the amounts of such payments cannot be
      finally determined on or before each such date, the
      Corporation shall pay to Executive on such date an estimate,
      as determined in good faith by the Corporation, of the
      minimum amount of such payments and shall pay the remainder
      of such payments then due as soon as the amount thereof can
      be determined.  In the event that the amount of the
      estimated payments exceeds the amount subsequently
      determined to have been due, such excess shall constitute a
      loan by the Corporation to Executive on the fifth day after
      demand by the Corporation (together with interest at the
      rate provided in Section 1274 (b) (2) (B) of the Code).

     6.9  Executive shall be required immediately after the
     Date of Termination to take reasonable steps to seek
     appropriate employment elsewhere; provided, however,
     that if Executive obtains employment that would result
     in a violation of the non-competition provisions of
     Section 10 of this Restated Agreement and if Executive
     is unable to accept such employment because the
     Corporation will not release Executive from Executive's
     non-competition obligation, Executive shall
     nevertheless be deemed to have satisfied the
     requirement of this Section to seek other employment.
     Upon receipt of written notice from Executive that
     Executive has been reemployed by another company or
     entity on a full-time basis (or would have been
     reemployed but for the non-competition provisions of
     Section 10 of this Restated Agreement) benefits
     otherwise receivable by Executive pursuant to
     Subsections 6.6(d) or 6.7(e) shall be reduced to the
     extent comparable benefits are made available to
     Executive at his new employment and any such benefits
     actually received by Executive shall be reported to the
     Corporation.  Nothing herein contained shall obligate
     Executive to accept employment elsewhere,  where the
     duties, status,  responsibilities, compensation and
     benefits are not at least equal to that of his current
     position.

7.   Successors; Binding Agreement

     The Corporation 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 Corporation to expressly
     assume and agree to perform this Restated Agreement in
     the same manner and to the same extent that the
     Corporation would be required to perform it if no such
     succession had taken place.  Failure of the Corporation
     to obtain such assumption and agreement  prior  to  the
     effectiveness of any such succession shall be a breach
     of this Restated Agreement and shall entitle Executive
     to terminate this Restated Agreement for Good Reason.
     As used in this Restated Agreement, "Corporation" shall
     mean the Corporation and any successor to its business
     and or assets as aforesaid which assumes and agrees to
     perform this Restated Agreement by operation of law, or
     otherwise.

8.Notice

     For the purpose of this Restated Agreement, notices
     and all other communications provided for in the
     Restated Agreement shall be in writing and shall be
     deemed to have been duly given when delivered or mailed
     by United States registered mail, return receipt
     requested, postage prepaid, addressed to the Executive
     at 6405 Mitchell Hollow Road, Charlotte, NC 28277, and
     to the Corporation at  3 Coliseum Centre, 2550 West
     Tyvola Road, Charlotte, NC 28217 to the attention of
     the Board with a copy to the Secretary of the
     Corporation or to such other address as either party
     may have furnished to the other in writing in
     accordance herewith, except that notice of change of
     address shall be effective only upon receipt.

9.   Modification - Waiver

     No provision of this Restated Agreement may be
     modified, waived or discharged unless such waiver,
     modification or discharge is agreed to in writing and
     signed by Executive and such officer of the Corporation
     as may be specifically designated by the Board.  No
     waiver by either party hereto at any time of any breach
     by the other party hereto of, or compliance with, any
     condition or provision of this Restated Agreement to be
     performed by such other party shall be deemed a waiver
     of similar or dissimilar provisions or conditions at
     the same or at any prior or subsequent time.

10.  Non-Competition

     10.1  Until the Date of Termination, Executive agrees
     not to enter into competitive endeavors and not to
     undertake any commercial activity which is contrary to
     the best interests of the Corporation or its
     affiliates, including becoming an employee, owner
     (except for passive investments of not more than three
     percent of the outstanding shares of, or any other
     equity interest in, any company or entity listed or
     traded on a national  securities  exchange  or  in  an
     over-the-counter securities market), officer, agent or
     director of (a) any firm or person engaged in the
     operation of a business engaged in the acquisition of
     industrial businesses or (b) any firm or person which
     either directly competes with a line or lines of
     business of the Corporation accounting for ten percent
     (10%) or more of the Corporation's gross revenues or
     earnings before taxes or derives ten percent (10%) or
     more of such firm's or person's gross revenues or
     earnings before taxes from a line or  lines  of
     business  which  directly  compete  with  the
     Corporation.  Notwithstanding any provision of this
     Restated Agreement to the contrary, Executive agrees
     that his breach of the provisions of this Section 10.1
     shall permit the Corporation to terminate Executive's
     employment for Cause in accordance with Section 5.l(b)
     hereof.

     10.2 After the Date of Termination and for a period of
     time equal in years to the multiple  of  annual  salary
     received  by Executive pursuant to Sections 6.6(b) and
     6.7(b)  (the "Non-Competition Period"),  Executive
     agrees not to become an employee, owner (except for
     passive investments of not more than three percent of
     the outstanding shares of, or any other equity interest
     in, any company or entity listed or traded on a
     national securities exchange or in an over-the-counter
     securities market), officer, agent or director of any
     firm or person which directly and substantially
     competes with a business of the Corporation accounting
     for ten percent (10%) or more of the Corporation's
     gross revenues or earnings before taxes. During the Non-
     Competition Period, Executive will be available to
     answer questions and provide advice to the Corporation;
     provided, however, that such requirement shall not
     unreasonably interfere with any other of Executive's
     activities which Executive is then pursuing and which
     are not otherwise prohibited by this Section 10.  Also,
     during the Non-Competition Period, Executive will
     retain in confidence any and all confidential
     information known to him concerning the Corporation and
     its business and shall not use or disclose such
     information without the approval of the Corporation
     except to the extent such information becomes public or
     as may be required by law.

     10.3 Executive acknowledges and agrees that damages for
     breach of the covenant not to compete in this Section
     10 will be difficult to determine and will not afford a
     full and adequate remedy, and therefore Executive
     agrees that the Corporation, in  addition  to  seeking
     actual  damages  pursuant  to  the procedures set forth
     in Section 13 below, may seek specific enforcement of
     the covenant not to compete in any court of competent
     jurisdiction, including, without limitation, by the
     issuance of a temporary or permanent injunction,
     without the necessity of a bond.  Executive and the
     Corporation agree that the provisions of this covenant
     not to compete are reasonable. However, should any
     court or arbitrator determine that any provision of
     this covenant not to compete is unreasonable, either in
     period of time, geographical area, or otherwise, the
     parties agree that this covenant not to compete should
     be interpreted and enforced to the maximum extent which
     such court or arbitrator deems reasonable.

11.  Validity

     The invalidity or unenforceability of any provision of
     this Restated Agreement shall not affect the validity
     or enforceability of any other provision of this
     Restated Agreement, which shall remain in full force
     and effect.

12.    Counterparts

     This Restated Agreement may be executed in several
     counterparts, each of which shall be deemed to be an
     original but all of which together will constitute one
     and the same instrument.

13.  Arbitration

     Except as contemplated by Section 10.3 of this Restated
     Agreement, any dispute or controversy arising under or
     in connection with this Restated Agreement shall be
     settled exclusively by arbitration in New York, New
     York, or other location mutually agreed upon by the
     parties to the arbitration, in accordance with rules of
     the American Arbitration Association, and judgment upon
     such award rendered by the arbitrator may be entered in
     any court having jurisdiction over such proceeding.

14.  Governing Law

     This Restated Agreement shall be governed by and
     construed and enforced in accordance with the laws of
     the State of New York.

15.    Entire Agreement; Survival of Certain Provisions

     This  Restated Agreement constitutes the whole
     agreement of  the Corporation  and  the  Executive.
     No  agreements or representations, oral or otherwise,
     express or implied, with respect to the subject matter
     of this Restated Agreement have been made by either
     party which are not expressly set forth in this
     Restated Agreement. The Employment Agreement dated June
     1,  1995 between the Corporation and the Executive is
     hereby superseded by this Restated Agreement.

     The obligations of the Corporation under Section 9
     above and the Executive's obligations under Section 10
     above shall survive the expiration of the term of this
     Restated Agreement.

16.  Withholding

     Any payments made to Executive under this Restated
     Agreement shall be paid net of any applicable
     withholding required under Federal, state or local law.

     IN WITNESS WHEREOF, the parties hereto have executed
this Restated Agreement as of January 10, 1997 to be
effective as of the Effective Date.

                           COLTEC INDUSTRIES INC

                         By:      John W. Guffey, Jr
                                Chairman, President and
                                Chief Executive Officer

                                Robert J. Tubbs
                                    Executive