================================================================================
                
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------

                                    FORM 10-Q

              [X] Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                  For the  quarterly  period ended March 31, 1998

             [ ]  Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                  For the transition period from ______ to ______

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


                         Commission file number 0-22580
                         ------------------------------


                                    JPE, Inc.
             (Exact name of registrant as specified in its charter)


                                    Michigan
                         (State or other jurisdiction of
                         incorporation or organization)


                                   38-2958730
                      (I.R.S. Employer Identification No.)


           775 Technology Drive, Suite 200, Ann Arbor, Michigan, 48108
               (Address of principal executive offices)        (Zip Code)


                                 (734) 662-2323
              (Registrant's telephone number, including area code)


                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed, since last report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                         Yes  /X/                  No  / /

As of March 31, 1998,  there were 4,602,180  shares of the  registrant's  common
stock outstanding.

This Quarterly Report on Form 10-Q contains 12 pages, of which this is page 1.

<PAGE>

                                    JPE, INC.

                                      INDEX


                                                                          Page
                                                                          ----

Part I.  Financial Information

     Item 1. Financial Statements
             Consolidated Balance Sheets ...............................     3
             -  At March 31, 1998 and 1997 (Unaudited)
             -  At December 31, 1997  (Audited)

             Consolidated Statements of Income (Unaudited) .............     4
             -  For the Three Months Ended
                March 31, 1998 and 1997

             Consolidated Statements of Cash Flows (Unaudited) .........     5
             -  For the Three Months Ended
                March 31, 1998 and 1997

             Notes to Unaudited Consolidated Financial Statements ......     6

     Item 2. Management's Discussion and Analysis of Financial
             Condition and Results of Operations .......................  7-10

Part II. Other Information

     Item 6. Exhibits and Reports on Form 8-K ..........................    11

     Signature .........................................................    12


<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements

                                    JPE, INC.
<TABLE>
                           CONSOLIDATED BALANCE SHEETS
                    (Amounts in Thousands, Except Share Data)
<CAPTION>
                                               At March 31,         December 31,
                                            1998         1997           1997
                                            ----         ----           ----
                                               (Unaudited)            (Audited)
<S>                                       <C>          <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents ............  $    357     $  1,204        $     29
  Accounts receivable, net .............    42,594       36,679          37,997
  Inventory ............................    38,188       40,647          39,412
  Other current assets .................     8,824        8,576           8,375
                                          --------     --------        --------

    Total current assets ...............    89,963       87,106          85,813

Property, plant and equipment, net .....    72,655       71,155          72,981
Goodwill, net ..........................    31,752       26,767          31,962
Other assets ...........................     2,313        4,096           2,459
                                          --------     --------        --------

    Total assets .......................  $196,683     $189,124        $193,215
                                          ========     ========        ========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt ....  $108,338     $    672        $105,402
  Short-term debt ......................     9,482        6,878           7,723
  Accounts payable .....................    27,801       25,303          25,219
  Accrued liabilities ..................     5,835        5,361           6,336
  Income taxes payable .................        37            5             314
                                          --------     --------        --------

    Total current liabilities ..........   151,493       38,219         144,994

Deferred income taxes ..................     4,072        3,579           3,804
Other liabilities ......................     1,815        1,570           1,651
Long-term debt, non-current ............     9,096      110,070           9,272
                                          --------     --------        --------

   Total liabilities ...................   166,476      153,438         159,721
                                          --------     --------        --------

Shareholders' equity:
  Preferred stock, 3,000,000
   authorized, no shares issued
   and outstanding .....................      --           --              --
  Common stock, 15,000,000 authorized,
   4,602,180 issued and outstanding at
   March 31, 1998 and at March 31,
   1997, no par value ..................    28,051       28,026          28,051
  Retained earnings ....................     2,446        7,743           5,714
  Foreign currency translation
   adjustment ..........................      (290)         (83)           (271)
                                          --------     --------        --------

   Total shareholders' equity ..........    30,207       35,686          33,494
                                          --------     --------        --------

   Total liabilities and 
    shareholders' equity ...............  $196,683     $189,124        $193,215
                                          ========     ========        ========

</TABLE>

                   The accompanying notes are an integral part
                    of the consolidated financial statements.


<PAGE>

                                    JPE, INC.
<TABLE>
                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME
                  (Amounts in Thousands, Except Per Share Data)
<CAPTION>
                                                       Three Months
                                                          Ended
                                                         March 31,
                                                   -------------------
                                               1998                   1997
                                               ----                   ----
                                                       (Unaudited)
<S>                                           <C>                    <C>

Net sales ..................................  $69,423                $67,995

Cost of goods sold .........................   63,231                 59,033
                                              -------                -------

    Gross profit ...........................    6,192                  8,962

Selling, general and
 administrative expenses ...................    7,697                  6,779
                                              -------                -------

    Operating profit (loss) ................   (1,505)                 2,183

Other expense (income) .....................     (134)                    72

Interest expense, net ......................    3,464                  2,210
                                              -------                -------

    Loss before income taxes ...............   (4,835)                   (99)

Income tax expense (benefit) ...............   (1,567)                    15
                                              --------               -------

    Net loss ...............................  $(3,268)               $  (114)

Other comprehensive expense
    Foreign currency translation
     adjustment ............................      (19)                   (83)
                                              -------                -------

Comprehensive loss .........................  $(3,287)               $  (197)
                                              =======                =======

Basic loss per common share ................  $ (0.71)               $ (0.02)
                                              =======                =======

Weighted average shares outstanding ........    4,602                  4,602
                                                =====                  =====

Loss per common share
 assuming dilution .........................  $ (0.71)               $ (0.02)
                                              =======                =======

Weighted average shares outstanding
 and common stock equivalents ..............    4,602                  4,602
                                                =====                  =====

</TABLE>


                   The accompanying notes are an integral part
                    of the consolidated financial statements.

<PAGE>

                                    JPE, INC.
<TABLE>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in Thousands)
<CAPTION>
                                                              Three Months
                                                                 Ended
                                                               March 31,
                                                          1998           1997
                                                          ----           ----
                                                              (Unaudited)
<S>                                                      <C>            <C>
Cash flows from operating activities:
  Net loss ...........................................   $(3,268)       $  (114)
  Adjustments to reconcile net income to
  net cash provided by operating activities:
    Depreciation and amortization ....................     2,751          2,303
    Changes in operating assets 
     and liabilities:
      Accounts receivable ............................    (4,597)        (9,850)
      Inventory ......................................     1,224         (2,684)
      Prepaids and other .............................       539           (404)
      Accounts payable ...............................     2,582          7,660
      Accrued liabilities ............................      (338)          (806)
      Income taxes ...................................      (980)            18
                                                         -------        -------

        Net cash provided (used)
         by operating activities .....................    (2,087)        (3,877)

Cash flows from investing activities:
  Purchase of property and equipment .................    (1,836)        (4,081)
                                                         -------        -------

        Net cash used for
         investing activities ........................    (1,836)        (4,081)

Cash flows from financing activities:
  Sale of common stock ...............................      --               77
  Repayments of other debt ...........................       (88)        (1,199)
  Net borrowings under revolving loan ................     2,991          8,275
  Net borrowings under Canadian credit facility ......     1,395            (19)
  Tax benefit from options ...........................      --               28
  Borrowing (repayments) under capital lease .........       (66)           811
                                                         -------        -------

        Net cash provided by
         financing activities ........................     4,232          7,973

Currency translation .................................        19           (127)

Cash and cash equivalents:
  Net increase (decrease) in cash ....................       328           (112)

  Cash and cash equivalents,
  beginning of period ................................        29          1,316 
                                                         -------        -------

  Cash and cash equivalents,
  end of period ......................................   $   357        $ 1,204
                                                         =======        =======

</TABLE>

                   The accompanying notes are an integral part
                    of the consolidated financial statements


<PAGE>

                                    JPE, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                             (Amounts in Thousands)


A.   BASIS OF PRESENTATION:

     The accompanying unaudited consolidated condensed financial statements have
     been prepared in accordance with generally accepted  accounting  principles
     for interim financial information. Accordingly, the financial statements do
     not include all of the  information  and  footnotes  required by  generally
     accepted accounting  principles for complete financial  statements.  In the
     opinion of  management,  all  adjustments  considered  necessary for a fair
     presentation  have  been  included,  and such  adjustments  are of a normal
     recurring nature. The consolidated  financial  statements should be read in
     conjunction  with the financial  statements and notes thereto  contained in
     the JPE, Inc. Form 10-K for the year ended December 31, 1997.


B.   SALE OF COMPANY:

     On March 23, 1998, the Company announced that it intends to pursue the sale
     of the entire  Company.  The proceeds  from the sale of the Company will be
     used to retire the debt of the Company,  although there can be no assurance
     that the  proceeds  will be  adequate  for this  purpose.  These  financial
     statements have been prepared as a going concern with no provision for loss
     on sale of the  Company.  The  Company and JPE Canada are in  violation  of
     their financial  covenants under their  respective debt agreements at March
     31,  1998,  and are  working  with their  respective  lenders to obtain the
     necessary waivers.


C.   INVENTORY:

     Inventories by component are as follows:

<TABLE>
<CAPTION>
                           March 31, 1998     March 31, 1997     Dec. 31, 1997
                           --------------     --------------     -------------
     <S>                      <C>                <C>                <C>    
     Finished goods           $18,938            $16,317            $19,309
     Work in process            2,243              5,596              2,435
     Raw material              14,535             15,949             15,211
     Tooling                    2,472              2,785              2,457
                              -------            -------            -------

                              $38,188            $40,647            $39,412
                              =======            =======            =======

</TABLE>


<PAGE>

                                    JPE, INC.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

The following  discussion  should be read in conjunction  with the  consolidated
financial statements and notes thereto filed with the Company's Annual Report on
Form 10-K to assist in understanding  the Company's  results of operations,  its
financial position,  cash flows,  capital structure and other relevant financial
information.


RECENT INFORMATION

On March 23, 1998,  the Company  announced that it intends to pursue the sale of
the entire  Company.  The  Company  has  concluded  that the  turnaround  of its
Canadian  operation  would  take  longer  than  anticipated  and  would  require
additional investment.  Therefore, management believes that the proper course of
action for the Company is to sell JPE and all of its businesses.


FORWARD LOOKING INFORMATION

This Quarterly  Report on Form 10-Q contains,  and from time to time the Company
expects to make,  certain  forward-looking  statements  regarding  its business,
financial  condition and results of  operations.  In  connection  with the "Safe
Harbor"  provisions  of the Private  Securities  Reform Act of 1995 (the "Reform
Act"),  the Company intends to caution readers that there are several  important
factors that could cause the Company's actual results to differ  materially from
those projected in its forward-looking statements, whether written or oral, made
herein or that may be made  from  time to time by or on  behalf of the  Company.
Readers are cautioned that such forward-looking  statements are only predictions
and that actual events or results may differ materially.  The Company undertakes
no  obligation  to  publicly  release  the  results  of  any  revisions  to  the
forward-looking  statements to reflect events or circumstances or to reflect the
occurrence of unanticipated events.

The Company wishes to ensure that any forward-looking statements are accompanied
by  meaningful  cautionary  statements  in order to comply with the terms of the
safe harbor provided by the Reform Act. Accordingly, the Company has set forth a
list of  important  factors  that could cause the  Company's  actual  results to
differ  materially  from  those  expressed  in  forward-looking   statements  or
predictions made herein and from time to time by the Company.  Specifically, the
Company's  business,  financial  condition  and results of  operations  could be
materially different from such  forward-looking  statements and predictions as a
result of (i) customer pressures that could impact sales levels and product mix,
including customer sourcing decisions,  customer evaluation of market pricing on
products   produced  by  the  Company,   customer   cost-cutting   programs  and
reimbursement  of  costs  by  the  customer;   (ii)   operational   difficulties
encountered  during the launch of major new OEM  programs;  (iii) the ability of
the Company to integrate  acquisitions into its existing  operations and achieve
expected cost savings;  (iv) the ability of the Aftermarket Group to balance the
cyclical  nature  of the OEM  industry;  (v) the  availability  of  funds to the
Company for continued  operations during the sale process;  (vi) the granting of
compliance waivers by the Company's lenders;  and (vii) the timing and amount of
proceeds from the sales of the Company's businesses.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

Net sales for the quarter  ended March 31, 1998 were $69.4  million  compared to
$68.0  million for the same period in 1997,  an increase of 2%. This increase is
attributable  to a 31% increase in Aftermarket  sales due to the  acquisition of
Brake, Axle and Tandem Company ("BATCO") in April 1997. OEM sales declined 8% to
$45.9  million for the first  quarter of 1998 as compared to $50.1 for the first
quarter of 1997. This decline is attributable to lower sales for JPE Canada Inc.
resulting from the end of certain car programs and lower service orders,  and to
the  discontinuance  of stamping sales for the Company's  Starboard  Industries,
Inc. subsidiary. For the quarter ended March 31, 1998, net sales for the Company
were 66% to OEM customers and 34% to Aftermarket customers.

Gross profit was $6.2  million for the three  months  ended March 31,  1998,  as
compared  with $9.0  million for the  comparable  period in the prior year.  The
gross margin  percentages  were 8.9% and 13.2% for 1998 and 1997,  respectively.
The  significant  decline in gross margin is  attributable to the performance of
the  Company's JPE Canada and Plastic Trim  subsidiaries.  JPE Canada had a $1.5
million  loss at the gross  profit  line for the first  quarter  ended March 31,
1998.  This compares to a break-even  performance  in the first quarter of 1997.
The loss is primarily attributable to production  difficulties  experienced with
the launch of a truck trim program for a major customer.  The difficulties  were
caused by numerous engineering changes and acceleration of the build rate at the
customer's request. These requirements resulted in a significant cost penalty to
JPE Canada.  In the first quarter of 1998, JPE Canada  incurred  premium freight
charges of $467,000,  overtime  premiums of $296,000,  and excess scrap and poor
paint yields  estimated to cost  approximately  $770,000 for the quarter.  These
charges were offset by a cost  reimbursement  from the customer in the amount of
$350,000.  In addition,  the customer has granted an aggregate price increase of
$1.4  million  annually  on two of JPE  Canada's  programs.  JPE Canada has also
implemented  a  headcount  reduction  program  to  eliminate  approximately  100
employees by the end of June and other cost reduction  initiatives to return the
operation to profitability by the end of the second quarter.

Plastic Trim's gross margin declined from 16.5% for the first quarter of 1997 to
2.8% for the first  quarter  of 1998,  a $2.1  million  decline.  In the  fourth
quarter of 1997, this operation experienced excess launch costs and higher scrap
rates. The Company has implemented a program to reduce the scrap rate, which has
improved from 15% to 9.5% of sales  through April 30, 1998. In addition,  a cost
reduction  program was instituted in March which includes  headcount  reductions
and price reductions from vendors supplying raw materials.

Selling, general and administrative expenses increased 13.2% to $7.7 million for
the three months  ended March 31,  1998,  from $6.8 million for the three months
ended March 31, 1997. This increase is attributable to the inclusion of BATCO in
the first quarter of 1998. The percentage of selling, general and administrative
expenses to net sales was 11.1% for the quarter ended March 31, 1998 as compared
to 10.0% for the  comparable  period  of the prior  year.  The  increase  in the
percentage reflects the greater percentage of sales to the Aftermarket which has
higher selling costs.

Net interest expense  increased to $3.5 million for the three months ended March
31, 1998 as compared to $2.2  million for the three months ended March 31, 1997.
The higher  interest cost is attributable to higher interest rates and amendment
fees stipulated in Amendment No. 3 to the U.S. Credit  Agreement at December 31,
1997. Effectively,  the Company's borrowing rate under its U.S. Credit Agreement
is  approximately  11%  compared  to 8% for  the  first  quarter  of  1997  (see
discussion under Liquidity and Capital Resources).

The  Company has  recorded a tax  benefit  for the losses  incurred in the first
quarter of 1998. The Company  believes that through the sale of the Company,  it
will be able to utilize this tax benefit.

Net loss for the three  months ended March 31, 1998 was $3.3 million or $.71 per
share as  compared  to a net loss of  $114,000  or $.02 a share for the  quarter
ended March 31, 1997. The net loss for this quarter  includes a net loss of $1.6
million or $.35 per share relating to the operations of JPE Canada.


LIQUIDITY AND CAPITAL RESOURCES

The  Company's  principal  source of liquidity  is its U.S. and Canadian  credit
agreements.  At March 31,  1998,  the Company and JPE Canada are in violation of
certain financial covenants under their respective debt agreements. On March 23,
1998,  the  Company  announced  that  it  intends  to  sell  all of JPE  and its
businesses, although there can be no assurance that the proceeds of such sale(s)
will be adequate to retire the credit agreements.

The Company's  principal source of liquidity for its U.S.  companies is the $120
million Third Amended and Restated Credit Agreement dated December 31, 1996 (the
"Credit  Agreement"),  as amended by Amendment No. 1 dated as of April 16, 1997,
Amendment  No. 2 dated as of  August  14,  1997  (effective  June 30,  1997) and
Amendment No. 3 dated as of February 13, 1998. The Credit  Agreement  expires on
October 27, 1998. The Credit Agreement is collateralized by all of the Company's
assets, with the exception of JPE Canada's assets. At March 31, 1998, borrowings
outstanding under this Credit Agreement totaled $106.9 million.

Amendment  No. 3 to the  Credit  Agreement  requires  the  Company to reduce its
borrowings  under the Credit  Agreement to no more than $70 million on or before
June 30, 1998.  In  addition,  the  Amendment  increased  the  interest  rate on
borrowings to prime plus 1.25%. There is also an amendment fee equal to $120,000
per month until the debt reduction occurs. The Company intends to accomplish the
debt reduction through the sale of its wholly-owned subsidiaries,  Dayton Parts,
Inc. and Allparts, Inc., although there can be no assurance that the proceeds of
these sales will be  sufficient  to satisfy this  requirement  or that the sales
will occur on or before June 30, 1998. In addition, the Credit Agreement expires
on October 27, 1998.

The principal  source of liquidity for JPE Canada is a Cdn.  $28.7 million (U.S.
$20.4  million)  credit  agreement  with a Canadian  bank.  The Canadian  Credit
Facility  permits  JPE  Canada  to  borrow  funds  in the form of  advances  for
operating  requirements  and capital  expenditures.  Advances under the Canadian
Credit Facility are  collateralized  by  substantially  all of the assets of JPE
Canada. Interest rates on the advances are computed at either the Canadian Prime
Rate or the  Base  Rate,  as  defined  in the  agreement.  At  March  31,  1998,
borrowings  under the Canadian Credit Facility  totaled Cdn. $26.2 million (U.S.
$18.6 million).

At March 31, 1998, Current Liabilities exceeded Current Assets by $61.5 million,
reflecting the  classification of the U.S. Credit Agreement of $106.9 million as
current liability.  Excluding the Credit Agreement, working capital at March 31,
1998 would have been $45.4  million as compared to $44.7 million at December 31,
1997.

<PAGE>


                           PART II. OTHER INFORMATION

                                    JPE, INC.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          a.  Exhibits:

              10.1  Executive   Severance  Agreement  dated  February  20,  1998
                    between  Registrant  and  Donna L.  Bacon,  filed  with this
                    report.

              10.2  Executive   Severance  Agreement  dated  February  20,  1998
                    between  Registrant  and James J.  Fahrner,  filed with this
                    report.

          b.  Report on Form 8-K:

              None.


<PAGE>


                                    JPE, INC.

                                    SIGNATURE


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.


                                    JPE, Inc.


                                     By:  /s/ James J. Fahrner
                                        -----------------------------
                                          James J. Fahrner
                                          Executive Vice President
                                          (Principal Financial Officer and
                                          Principal Accounting Officer)


Date:  May 15, 1998


<PAGE>


                                  EXHIBIT INDEX
                                  -------------

EXHIBIT
  NO.               DESCRIPTION
-------             -----------

 10.1               Executive   Severance  Agreement  dated  February  20,  1998
                    between  Registrant  and  Donna L.  Bacon,  filed  with this
                    report.

 10.2               Executive   Severance  Agreement  dated  February  20,  1998
                    between  Registrant  and James J.  Fahrner,  filed with this
                    report.

 27                 Financial Data Schedule,  which is submitted  electronically
                    to the  Securities and Exchange  Commission for  information
                    only and not filed.