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                                                                EXHIBIT 10.40

                       SECOND AMENDMENT TO LOAN AGREEMENT

                                    BETWEEN

                             STANDARD FEDERAL BANK

                                      AND

                            GALION HOLDING COMPANY,
                       GALION SOLID WASTE EQUIPMENT, INC.
                          AND GALION DUMP BODIES, INC.

     THIS AMENDMENT AGREEMENT made and delivered this 5th day of May, 1995, by 
and between Galion Holding Company, a Michigan corporation, Galion
Solid Waste Equipment, Inc., a Michigan corporation, and Galion Dump Bodies,
Inc., a Michigan corporation (collectively, "Borrower"), whose
address/principal office is 6200 Elmridge, Sterling Heights, Michigan 48310,
and Standard Federal Bank, a federal savings bank ("Standard Federal"), whose
address is 2600 West Big Beaver Road, Troy, Michigan 48084.

RECITALS:

         A.      On September 15, 1994, the Borrower and Standard Federal
entered into a Loan Agreement, as amended February 16, 1995 (the "Loan
Agreement"), pursuant to which the Borrower opened a revolving line of credit
facility with Standard Federal, Loan No. 0250012691, with a credit limit of up
to $7,500,000.00 (the "Line of Credit"), as evidenced by an Amended and
Restated Promissory Note (Line of Credit), dated February 16, 1995, in the
principal amount of $7,500,000.00 (the "Note"), secured by a Security
Agreement, dated September 15, 1994 (the "Security Agreement"), and two
Open-End Commercial Mortgages and Assignments of Lease and Rentals, dated June
29, 1993, as amended September 15, 1994, February 6, 1995 and February 16, 1995
(the "Mortgages").

         B.      The Borrower has requested an increase in the credit limit of
the Line of Credit, as herein provided, and Standard Federal is willing to
supply such financing subject to the terms and conditions set forth in this
Amendment Agreement.

     NOW, THEREFORE, in reliance upon the representations herein provided and
in consideration of the premises and the mutual promises herein contained, the
Borrower and Standard Federal hereby agree as follows:

         1.      The Borrower is a Michigan corporation in good standing.  All
corporate resolutions heretofore delivered to Standard Federal relative to
borrowing money and granting security interests remain in full force and
effect.  Borrower has duly authorized and validly executed and delivered this
Amendment Agreement and such Amendment Agreement and the Loan Agreement (as
hereby amended) are valid and
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enforceable according to their terms and do not conflict with or violate
Borrower's corporate charter or by-laws or any agreement or covenants to which
Borrower is a party.

         2.      The Security Agreement is valid and enforceable in accordance
with its terms.  Standard Federal's security interest in the collateral
described in the Security Agreement is valid and perfected and Borrower is
aware of no claims or interests in such collateral prior or paramount to
Standard Federal's.

         3.      The Mortgages are valid and enforceable in accordance with
their terms.  Standard Federal holds valid first mortgage interests in the real
property described in the Mortgages which are valid and perfected and Borrower
is aware of no claims or interests in such property prior or paramount to
Standard Federal's.

         4.      Section 1.1 of the Loan Agreement is hereby deleted in its
entirety and  replaced by the following new Section 1.1:

         1.1              Standard Federal hereby extends to the Borrower a
         revolving line of credit (the "Line of Credit") which shall not exceed
         at any one time outstanding the Credit Limit as hereafter defined.
         The term "Credit Limit" shall mean the lesser of: (a) Nine Million and
         00/100 Dollars ($9,000,000.00), or (b) an amount equal to the sum of:
         (i) an amount equal to 80% of Eligible Accounts Receivable, plus (ii)
         an amount equal to the lesser of: (1) Five Million and 00/100 Dollars
         ($5,000,000.00), or (2) an amount equal to 40% of Qualified Inventory.
         As used herein, the term "Eligible Accounts Receivable" shall mean
         accounts receivable of the Borrower less than 90 days old, not
         doubtful as to collectibility or disputed as to existence or amount or
         subject to offset, contra- indebtedness or return and not
         intra-company or owing from any affiliated or related company or other
         entity, exclusive of any account receivable arising under a government
         contract, the assignment of which is subject to the Assignment of
         Claims Act of 1940, as amended, or any other similar federal or state
         statute or regulation governing the assignment of contracts with a
         governmental agency.  The term "Qualified Inventory" shall mean the
         inventory of Borrower in which Standard Federal holds a perfected
         first security interest exclusive of any returned or damaged items and
         work-in-process.

         5.      Simultaneously with the execution of this Amendment Agreement,
the Borrower shall execute and deliver to Standard Federal an Amended and
Restated Promissory Note (Line of Credit) in the stated principal amount of
$9,000,000.00 (the "Amended Note") to evidence the Line of Credit as hereby
amended and to replace the Note.  The "Line of Credit Note" referred to in the
Loan Agreement shall hereafter be deemed to refer to the Amended Note.





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         6.      Simultaneously with the execution of this Amendment Agreement,
the Borrower shall also execute and deliver amendment agreements whereby the
Mortgages are amended to secure the Line of Credit as hereby amended, and shall
cause McClain Industries, Inc., a Michigan corporation, to executed an
unlimited guaranty of payment of the obligations of the Borrower to Standard
Federal.

         7.      Except as herein amended, the Loan Agreement, Security
Agreement and Mortgages shall remain in full force and effect.

     IN WITNESS WHEREOF, the Borrower and Standard Federal have caused this
Amendment Agreement to be executed as of the day and year first written above.

Witnesses:                            BORROWER:

                                      GALION HOLDING COMPANY, a Michigan
                                           corporation



                                      By:                                
---------------------------              --------------------------------
                                           E. James Zabinski
                                           Vice President/Treasurer

                                      Taxpayer Identification Number:
                                      38-3060196

                                      GALION SOLID WASTE EQUIPMENT, INC.,   
                                           a Michigan corporation



                                  By:                               
---------------------------          -------------------------------
                                           E. James Zabinski
                                           Treasurer

                                  Taxpayer Identification Number:

                                                                   
                                  ----------------------------------

                                  GALION DUMP BODIES, INC., a Michigan 
                                           corporation


                                  By:                               
---------------------------          -------------------------------
                                           Carl Jaworski   
                                           Treasurer

                                  Taxpayer Identification Number:

                                                                             
                                  ----------------------------------





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                                  STANDARD FEDERAL BANK, a
                                     federal savings bank



                                  By:____________________________


                                     Its:________________________





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