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                                                                   EXHIBIT 10.23

                                     December 12, 1996


PERSONAL AND CONFIDENTIAL


Mr. Richard P. Schneider
210 Margate Court
Lake Bluff, IL 60044

Dear Mike:

          On behalf of Tenneco Inc. (the "Company" or "Tenneco"), I am pleased
to set forth the terms and conditions of your employment:

1.   You are employed as Vice President, Human Resources, Tenneco Automotive and
     shall in the future hold such positions as the Company may determine from
     time to time. While employed, you will abide by all policies of the
     Company.

2.   You will be paid a base salary of $200,000 a year, which shall be subject
     to such adjustments as may from time to time be approved by the
     Compensation and Benefits Committee of the Board of Directors of Tenneco,
     payable according to the regular pay schedule for salaried employees.

3.   You will be a participant in the Tenneco Executive Incentive Compensation
     Plan ("EICP"). The amount distributed to you under the EICP for 1996 will
     be $130,000, which includes a special award amount of $40,000 reflecting
     your special contribution to Tenneco during this transition year. In the
     future, you will be eligible for EICP distributions based on your
     performance at the discretion of the Compensation and Benefits Committee of
     the Board of Directors.

4.   You will be awarded 40,000 non-qualified stock options under the Tenneco
     stock ownership plan. The number of shares you will receive represents a
     front-loaded grant of three years' worth of stock options. Two-thirds of
     this award will be granted to you on December 12, 1996 with the option
     price based on the fair market value of Tenneco stock on that date. The
     remaining one-third will be granted and priced in 1997 at a date to be
     determined by the Compensation and Benefits Committee. In January, 1997 you
     will be awarded 4,000 performance shares under Tenneco Stock Ownership
     Plan. In the future, you will be eligible to receive awards under that plan
     at the discretion of the Compensation and Benefits Committee of the Board
     of Directors. You will also receive a one-time grant of 3,000 shares of
     restricted stock, which will vest only upon retirement or other mutually
     satisfactory separation from service.


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5.   You will receive annual perquisite compensation of $20,000, according to
     the new plan we are putting in place.

6.   You will receive non-cash compensation and personal benefits comparable to
     those currently provided to Tenneco executives under Tenneco's policy in
     effect at the time hereof, including Health Care, Thrift Plan, Long-Term
     Disability, and Life Insurance (the plan provides for coverage for one and
     one-half times your salary paid for by the Company, with the option to
     purchase at your expense up to five times your salary.)

7.   The aggregate monthly pension benefits to which you and your surviving
     spouse shall be entitled hereunder, shall be equal to the additional
     benefits you and your surviving spouse would be entitled to under the
     Tenneco qualified and non-qualified defined benefit pension plans EXCEPT
     that the compensation used to compute your monthly pension shall include
     your EICP bonus for the year earned (regardless of when paid) and EXCEPT
     that final average compensation for the purpose of this supplement will be
     determined over a three year rather than a five year period. You will
     qualify for the additional benefits provided under this Section only if you
     render five years of service with the Company in the period commencing
     January 1, 1997.

8.   If your employment is terminated other than for death, disability or
     non-performance of your duties, subject to your execution of a general
     release and such other documents as the Company may specify: (a) you will
     be paid a severance benefit in an amount equal to one and one-half times
     the total of your then-current base salary plus your bonus for the
     immediately preceding year; (b) subject to Board approval, all outstanding
     awards under the Tenneco Stock Ownership Plan may vest and/or become
     exercisable on the date of your termination; and (e) vested stock options
     you hold will remain exercisable for a period of not less than 90 days from
     your termination.

9.   If you resign voluntarily at any time you will not be entitled to any
     benefits described in section 8 hereof.


                                        Sincerely,

                                        /s/ Barry R. Schuman

                                        Barry R. Schuman
                                        Senior Vice President, Human Resources


ACKNOWLEDGED AND ACCEPTED:


/s/ Richard P. Schneider
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On this 16th day of December, 1996.