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                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 June 30, 1997

         [ ]      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.)


             900 Victors Way, Suite 140, Ann Arbor, Michigan, 48108
               (Address of principal executive offices) (Zip Code)


                                 (313) 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 June 30, 1997,  there were  4,602,180  shares of the  registrant's  common
stock  outstanding. 

This Quarterly Report on Form 10-Q contains 16 pages, of which this is page 1.

================================================================================

<PAGE>

                                    JPE, INC.

                                      INDEX


                                                                        Page
                                                                        ----

Part I.  Financial Information

     Item 1.  Financial Statements
              Consolidated Condensed Balance Sheets ..................    3
              -  At June 30, 1997 and 1996 (unaudited)
                 and December 31, 1996

              Consolidated Statements of Income ......................    4
              -  For the Three and Six Months Ended 
                 June 30, 1997 and 1996 (unaudited)

              Consolidated Statements of Cash Flows ..................    5
              -  For the Six Months Ended June 30, 1997
                 and 1996 (unaudited)

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

     Item 2.  Management's Discussion and Analysis of
                Financial Condition and Results of Operations ........    9

Part II. Other Information

     Item 4.  Submission of Matters to a Vote of
                Security Holders .....................................   15

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

     Signature .......................................................   16


<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
                                    JPE, INC.
<TABLE>
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                    (Amounts in Thousands, Except Share Data)
<CAPTION>
                                                At June 30,         At Dec. 31,
                                            1997          1996          1996
                                            ----          ----          ----
                                                (Unaudited)
<S>                                       <C>           <C>           <C>
ASSETS
Current assets:
  Cash and cash equivalents ............  $    200      $    385      $  1,316
  Accounts receivable, net .............    40,630        30,439        26,829
  Inventory ............................    41,165        32,655        37,963
  Other current assets .................    11,152         2,100         8,688
                                          --------      --------      --------

    Total current assets ...............    93,147        65,579        74,796

Property, plant and equipment, net .....    72,980        52,368        69,281
Goodwill, net ..........................    31,985        31,997        27,068
Other assets ...........................     2,774         1,846         3,580
                                          --------      --------      --------

    Total assets .......................  $200,886      $151,790      $174,725
                                          ========      ========      ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt ....  $  1,212      $    107      $    323
  Short-term debt ......................     8,678          --           8,120
  Accounts payable .....................    25,795        16,105        17,643
  Accrued liabilities ..................     9,288         5,222         6,190
  Income taxes payable .................      --             716           382
                                          --------      --------      --------

    Total current liabilities ..........    44,973        22,150        32,658

Accrued liabilities ....................     1,643         1,223         1,547
Deferred income taxes ..................     3,453         3,238         3,184
Long-term debt, non-current ............   116,052        85,018       101,558
                                          --------      --------      --------

    Total liabilities ..................   166,121       111,629       138,947
                                          --------      --------      --------

Shareholders' equity:
  Preferred stock, 3,000,000
   authorized, no shares issued
   and outstanding .....................      --            --            --
  Common stock, 15,000,000
   authorized, 4,602,180 and
   4,582,480 shares issued and
   outstanding at June 30, 1997
   and December 31, 1996, 
   respectively; 4,582,480 shares
   issued and outstanding at
   June 30, 1996, no par value .........    28,026        27,921        27,921
  Retained earnings ....................     6,752        12,240         7,857
  Foreign currency translation 
   adjustment ..........................       (13)         --            --
                                          --------      --------      --------

    Total shareholders' equity              34,765        40,161        35,778
                                          --------      --------      --------

    Total liabilities and
      shareholders' equity                $200,886      $151,790      $174,725
                                          ========      ========      ========
</TABLE>
                   The accompanying notes are an integral part
                    of the consolidated financial statements.
<PAGE>

                                    JPE, INC.
<TABLE>
                        CONSOLIDATED STATEMENTS OF INCOME

            For the Three and Six Months Ended June 30, 1997 and 1996
                  (Amounts in Thousands, Except Per Share Data)
                                   (Unaudited)

<CAPTION>
                                     Three Months              Six Months
                                         Ended                   Ended
                                        June 30,                June 30,
                                   1997         1996       1997         1996
                                   ----         ----       ----         ----
<S>                            <C>          <C>         <C>          <C>

Net sales ..................   $  77,006    $  55,979   $ 145,031    $ 103,590

Cost of goods sold .........      65,553       44,691     124,617       83,426
                               ---------    ---------   ---------    ---------

  Gross profit .............      11,453       11,288      20,414       20,164


Selling, general and
 administrative expenses ...       7,794        6,312      14,643       11,981

Discontinuance of stamping
 operations ................       2,250         --         2,250         --
                               ---------    ---------   ---------    ---------

  Operating profit .........       1,409        4,976       3,521        8,183

Other expense ..............         104         --           176         --

Interest expense, net ......       2,471        1,879       4,614        3,534
                               ---------    ---------   ---------    ---------

  Income (loss) before
   income taxes ............      (1,166)       3,097      (1,269)       4,649

Income tax expense
 (benefit) .................        (176)       1,235        (164)       1,855
                               ---------    ---------   ---------    ---------

  Net income (loss) ........   $    (990)   $   1,862   $  (1,105)   $   2,794
                               =========    =========   =========    =========


Earnings (loss) per
 common share ..............   $   (0.22)   $    0.41   $   (0.24)   $    0.61
                               =========    =========   =========    =========


Weighted average shares
 outstanding ...............       4,602        4,591       4,606        4,585
                               =========    =========   =========    =========

</TABLE>

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



<PAGE>

                                    JPE, INC.
<TABLE>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Six Months Ended June 30, 1997 and 1996
                             (Amounts in Thousands)
                                   (Unaudited)
<CAPTION>
                                                                Six Months
                                                                  Ended
                                                                 June 30,
                                                            1997          1996
                                                            ----          ----
<S>                                                      <C>            <C>
Cash flows from operating activities:
   Net income (loss) .................................   $ (1,105)      $ 2,794
   Loss on disposal of fixed assets ..................         24          --
   Discontinuance of stamping operations .............      2,250          --
   Adjustments  to reconcile  net income
    (loss) to net cash provided by (used
    for) operating activities:
      Depreciation and amortization ..................      4,678         3,604
      Changes in operating assets and
       liabilities:
        Accounts receivable ..........................    (11,890)       (7,029)
        Inventory ....................................     (1,531)        2,418
        Other current assets .........................       (937)          539
        Accounts payable .............................      5,277           949
        Accrued liabilities ..........................       (222)         (405)
        Income taxes .................................       (382)          542
        Deferred income taxes ........................        269           311
                                                         --------       -------

          Net cash provided by (used for)
           operating activities ......................    (3,569)         3,723

Cash flows from investing activities:
  Purchase of property and equipment .................    (7,425)        (5,996)
  Acquisition of BATCO ...............................    (5,518)          --
                                                         --------       -------

          Net cash used for
           investing activities ......................   (12,943)        (5,996)

Cash flows from financing activities:
  Net borrowings under revolving loan ................    14,275         11,850
  Repayments of notes payable ........................    (1,297)       (10,100)
  Net borrowings under Canadian credit
    facility .........................................     1,537           --
  Net borrowings under a capital lease ...............       900           --
  Sale of common stock ...............................        77            410
  Tax benefit from stock options .....................        28            210
                                                         -------        -------

          Net cash provided by
           financing activities ......................    15,520          2,370

  Currency translation ...............................      (124)          --

Cash and cash equivalents:
  Net increase (decrease) in cash ....................    (1,116)            97

  Cash and cash equivalents,
   beginning of period ...............................     1,316            288
                                                         -------        -------
  Cash and cash equivalents,
   end of period .....................................   $   200        $   385
                                                         =======        =======

</TABLE>

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


<PAGE>

                                    JPE, INC.
                    NOTES TO UNAUDITED CONDENSED 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.  The  consolidated  financial  statements
     should  be read in  conjunction  with the  financial  statements  and notes
     thereto contained in the JPE, Inc. Annual Report and Form 10-K for the year
     ended  December 31, 1996 and the Form 10-Q for the quarter  ended March 31,
     1997.


B.   INVENTORY:

     Inventories by component are as follows:
<TABLE>
<CAPTION>
                          June 30, 1997       June 30, 1996      Dec. 31, 1996
                          -------------       -------------      -------------
     <S>                     <C>                 <C>                 <C>

     Finished goods .....    $16,673             $13,897             $15,457
     Work in process ....      5,712               4,102               4,811
     Raw material .......     16,150              11,065              15,116
     Tooling ............      2,630               3,591               2,579
                             -------             -------             -------
                             $41,165             $32,655             $37,963
                             =======             =======             =======
</TABLE>


C.   NEW FINANCIAL ACCOUNTING STANDARDS:

     In February 1997, the Financial Accounting Standards Board issued Statement
     of  Financial  Accounting  Standards  No. 128,  "Earnings  per Share." This
     standard requires a change in method for computing and presenting  earnings
     per share  effective  for the period  ending after  December 15, 1997.  The
     Company has reviewed this  statement and believes there will be no material
     change in its reported earnings per share amounts.

<PAGE>

D.   BATCO ACQUISITION:

     On April 16, 1997,  Dayton Parts,  Inc., a wholly-owned  subsidiary of JPE,
     Inc.,  acquired all of the capital stock of Brake,  Axle and Tandem Company
     ("BATCO")  for $5.5  million in cash.  In  addition  to the cash paid,  the
     purchase  agreement  also  includes  an  "earn-out"  provision  which  will
     increase the purchase  price by up to $3.9 million if certain  sales levels
     are achieved over the next three years. The value of assets and liabilities
     assumed for the purchase was the following:

     Accounts receivable and other current assets ................  $ 1,975
     Inventory ...................................................    2,078
     Property, plant and equipment ...............................      379
     Goodwill ....................................................    5,551
     Deferred tax asset ..........................................      657
                                                                    -------

       Total assets ..............................................   10,640

     Accounts payable ............................................    2,875
     Accrued expenses ............................................    1,573
     Debt ........................................................      674
                                                                    -------

       Total liabilities .........................................    5,122

       Total, net ................................................  $ 5,518
                                                                    =======

     The following unaudited pro forma summary for the six months ended June 30,
     1997 and 1996  assumes  that the  acquisitions  of JPE Canada and BATCO had
     occurred  on January 1, 1996.  The  significant  adjustments  relate to the
     inclusion  of  amortization  of goodwill,  an increase in interest  expense
     based on an increase in long-term  obligations,  a decrease in  commissions
     expense  at  JPE  Canada,   additional  or  reduced   depreciation  on  the
     revaluation  of property,  plant and equipment  and the related  income tax
     effects (amounts in thousands, except per share amounts):

                                                  Six months ending June 30,
                                                   1997                1996
                                                   ----                ----

     Revenues ................................  $150,541             $153,379
     Operating Profit ........................     3,250               11,819
     Income (loss) before income taxes .......    (1,701)               7,323
     Net income (loss) .......................    (1,355)               4,495

     Earnings (loss) per common share ........      (.29)                 .98


<PAGE>

E.   DISCONTINUANCE OF STAMPING OPERATIONS:

     On May 15, 1997, the Company  announced a plan to discontinue  its stamping
     operations at its East Tawas,  Michigan  facility of Starboard  Industries,
     Inc.,  a  wholly-owned   subsidiary  of  the  Company.  The  plan  includes
     resourcing  stamped  parts to third party  suppliers,  the sale of stamping
     assets and a  reduction  in the  Starboard  workforce.  As a result of this
     plan,  the  Company  recorded a charge of $2.25  million  comprised  of the
     following:

     Loss on sale of fixed assets ................................   $1,348
     Severance expenses ..........................................      365
     Adjustment to scrap value of inventory ......................      407
     Other .......................................................      130
                                                                     ------

       Total .....................................................   $2,250
                                                                     ======

<PAGE>


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.

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 and customer  cost-cutting  programs;  (ii) the
impact on the  Company's  operations  and cash flows caused by labor  strikes or
work stoppages at the Company's OEM customers;  (iii)  operational  difficulties
encountered during the launch of major new OEM programs; (iv) the ability of the
Company to  integrate  acquisitions  into its  existing  operations  and achieve
expected cost savings;  (v) the ability of the Aftermarket  Group to balance the
cyclical nature of the OEM industry;  and (vi) the  availability of funds to the
Company for strategic  acquisitions and capital  investments to enhance existing
production and distribution capabilities.


<PAGE>

RESULTS OF OPERATIONS

SECOND QUARTER ENDED JUNE 30, 1997 COMPARED
  TO SECOND QUARTER ENDED JUNE 30, 1996

Net sales for the  quarter  ended June 30, 1997 were $77.0  million  compared to
$56.0 million for the three months ended June 30, 1996.  The net sales  increase
of 38% is  attributable to the acquisition of JPE Canada Inc. ("JPE Canada") and
Brake,  Axle and Tandem  Company  ("BATCO")  in  December  1996 and April  1997,
respectively.  JPE Canada is a Canadian  supplier  of  injection-molded  plastic
exterior  trim to  Original  Equipment  Manufacturers  ("OEM's")  and BATCO is a
supplier of brake hardware,  wheel attaching and suspension  parts for the heavy
duty truck and trailer  aftermarket.  For the quarter  ended June 30, 1997,  net
sales  for  the  Company  were  approximately  66% to OEM  customers  and 34% to
Aftermarket customers.

Gross profit increased 1.5% to $11.5 million for the three months ended June 30,
1997 as compared with $11.3 million for the comparable period of the prior year.
The  gross  profit   percentages  were  14.9%  and  20.2%  for  1997  and  1996,
respectively.  The second  quarter of 1996  includes a recovery  of  $890,000 in
costs  from an OEM  customer  related  to the  cancellation  of a trim  program.
Adjusting for this recovery,  gross profit  percentages were 14.9% and 18.6% for
the quarter ending June 30, 1997 and 1996,  respectively.  This decline in gross
profit  percentage is due primarily to the  acquisition  of JPE Canada which was
purchased  out of  bankruptcy  in  December  1996.  The  Company has an on-going
turn-around plan to improve JPE Canada's  profitability  through reducing scrap,
premium freight, and overtime while improving productivity.  The results of this
plan have been reflected in  improvements  in JPE Canada's  gross profit,  which
increased  from 0.1% in the first quarter of 1997 to 4.8% in the second  quarter
of 1997.  Management  believes that JPE Canada will show further  improvement in
its gross profit  percentage  with the continued  execution of this  turn-around
plan. In addition to JPE Canada,  the decline in gross profit  percentage can be
attributed to lower  performance  at the Company's  Starboard  Industries,  Inc.
subsidiary.  The decline in  Starboard's  performance  is a result of production
difficulties, higher scrap and pricing issues in its stamping operations.

Selling, general and administrative expenses increased 23.5% to $7.8 million for
the three  months  ended June 30, 1997 from $6.3  million  for the three  months
ended June 30, 1996. The increase is a result of the  acquisitions of JPE Canada
and  BATCO,  as  discussed  above.  The  percentage  of  selling,   general  and
administrative  expenses to net sales was 10.1% for the  quarter  ended June 30,
1997 as  compared  to 11.3% for the  comparable  period of the prior  year.  The
decline in this  percentage is  attributable  to the  acquisition  of JPE Canada
which  has  a  lower  administrative  overhead  structure  than  the  other  JPE
businesses.


<PAGE>

During the second quarter of 1997, management  implemented a plan to improve the
operating  results of its Starboard  business,  primarily by  discontinuing  its
stamping  operations by September 30, 1997.  The plan  includes  resourcing  the
stamped parts to other third-party  suppliers,  the sale of its stamping assets,
reducing the workforce and a major re-layout of Starboard's East Tawas, Michigan
production facility to improve productivity of its roll-forming and co-extrusion
operations.  Management  made this  decision  based on the  negative  impact the
stamping  business had on the  operating  results of Starboard  and the OEM Trim
Group as a whole. As a result of this discontinuance of stamping operations, the
Company  recorded a charge of $2.25 million  relating to the loss on disposal of
assets,  employee  severances and other costs  directly  related to the stamping
business.

The  operating  profits for JPE's U.S.  operations  continue to improve over the
1996  second  half  performance  as  shown  in the  table  below,  adjusted  for
non-recurring charges:

<TABLE>
<CAPTION>
Quarter Ended                    Operating Profit         Percent of Sales
-------------                    ----------------         ----------------
<S>                                <C>                         <C>
September 30, 1996                 $  993,000                  2.0%
December 31, 1996                  $1,307,000                  2.9%
March 31, 1997                     $2,685,000                  5.2%
June 30, 1997                      $3,444,000                  5.8%
</TABLE>

These  improvements are attributable to stronger  operating  performances in our
OEM and  Aftermarket  businesses  as a result of action plans  instituted in the
second half of 1996.  These  action  plans are  continuing  to be  examined  and
refined  for  further  operating  enhancements  in  order  to reach a goal of an
operating profit margin in excess of 7% for the Company's  operations by the end
of the calendar year,  although there can be no assurances  that this level will
be reached.

In addition to  improvements  in the Company's U.S.  operations,  JPE Canada has
also shown  improvement as a result of its ongoing  turnaround  plan as shown in
the table below:
<TABLE>
<CAPTION>
                                 Operating Profit
Quarter Ended                         (Loss)              Percent of Sales
-------------                    ----------------         ----------------
<S>                                 <C>                        <C>
March 31, 1997                      $(568,000)                 (3.6)%
June 30, 1997                         214,000                   1.2%
</TABLE>

These improvements are the result of management's turnaround plan for JPE Canada
mentioned above.


<PAGE>


Net interest  expense  increased to $2.5 million for the three months ended June
30, 1997 as compared to $1.9  million for the three  months ended June 30, 1996.
The higher  interest cost is  attributable  to the funds borrowed to finance the
JPE Canada and BATCO  acquisitions;  a higher  average debt level as a result of
capital  investments made in the Company's OEM and Aftermarket  businesses;  and
increased  customer  tooling  balances  related  to  several  new  1997 and 1998
launches in the OEM trim group.

Income tax benefit for the quarter  ended June 30, 1997 was $176,000 as compared
to income tax expense of $1.2  million for the same period in 1996.  The benefit
is  primarily  the  result of the  charge  recorded  for the  discontinuance  of
stamping operations and the pretax loss at the Company's Canadian operation.

Net loss for the three  months  ended June 30, 1997 was  $990,000 as compared to
net income of $1.9  million in the second  quarter of 1996.  The  decrease  is a
result of the factors summarized above. Loss per share for the second quarter of
1997 was $0.22 as compared to earnings per share of $0.41 during the same period
in 1996.  The net loss for the quarter  includes a loss of $1.5 million or $0.32
per  share  due  to  the  after-tax  effect  of  the  charge  recorded  for  the
discontinuance of Starboard's stamping operations.


SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

Net sales for the six months ended June 30, 1997 were $145.0 million compared to
$103.6 million for the six months ended June 30, 1996. The net sales increase of
40% is  attributable to the acquisition of JPE Canada and BATCO in December 1996
and April 1997, respectively.  For the six months ended June 30, 1997, net sales
for the Company were  approximately  70% to OEM customers and 30% to Aftermarket
customers.

Gross profit increased 1.2% to $20.4 million for the three months ended June 30,
1997 as compared with $20.2 million for the comparable period of the prior year.
The  gross  profit   percentages  were  14.1%  and  19.5%  for  1997  and  1996,
respectively. The second quarter of 1996 includes a recovery of $890,000 from an
OEM customer related to the  cancellation of a trim program.  Adjusting for this
cost recovery,  the gross profit percentages were 14.1% and 18.6%. The remaining
decline in gross profit  percentage is due primarily to the  acquisition  of JPE
Canada  which  was  purchased  out of  bankruptcy  in  December  1996 and  lower
operating  performance at the Company's Starboard  Industries,  Inc. subsidiary.
See  discussion  for the second  quarter  for  management's  plan to improve JPE
Canada's and Starboard's performance.

Selling,  general and  administrative  expenses increased 22.2% to $14.6 million
for the six months  ended June 30,  1997 from $12.0  million  for the six months
ended June 30, 1996. The increase is a result of the  acquisitions of JPE Canada
and  BATCO  as  discussed  above.   The  percentage  of  selling,   general  and
administrative  expenses  to net sales was 10.1% for the six months  ending June
30, 1997 as compared to 11.6% for the  comparable  period of the prior year. The
decline in this  percentage is  attributable  to the  acquisition  of JPE Canada
which has a lower overhead structure than the other JPE businesses.


<PAGE>

See  second  quarter  section  for  discussion  on the charge  recorded  for the
discontinuance   of  stamping   operations   and  quarterly   operating   profit
improvements.

Net interest expense increased to $4.6 million for the six months ended June 30,
1997 as compared to $3.5  million for the six months  ended June 30,  1996.  The
higher interest cost is  attributable to the factors  mentioned in the quarterly
discussion above.

Income tax  benefit  for the six months  ending  June 30,  1997 was  $164,000 as
compared to income tax expense of $1.9 million for the same period in 1996.  The
benefit is a result of the charge  recorded for the  discontinuance  of stamping
operations and the pretax loss at the Company's Canadian operation.

Net loss for the six months  ended June 30, 1997 was $1.1 million as compared to
net income of $2.8  million  over the same  period in 1996.  The  decrease  is a
result of the factors  summarized above. Loss per share for the first six months
of 1997 was $0.24 as  compared to  earnings  per share of $0.61  during the same
period in 1996.  The net loss includes a loss of $1.5 million or $0.32 per share
due to the after-tax  effect of the charge  recorded for the  discontinuance  of
Starboard's  stamping  operations  and a loss of  $690,000  or $0.15  per  share
relating to the operations of JPE Canada.


LIQUIDITY AND CAPITAL RESOURCES

The Company's principal capital requirements are to fund business  acquisitions,
working  capital  needs and capital  additions  to enhance  existing  production
technologies  and  capabilities.  Historically,  the Company has used cash flows
generated  by  operations,  borrowings  under its credit  agreements  and equity
financing to meet these needs.

The Company's  principal source of liquidity for the U.S. operations is the $110
million Third Amended and Restated  Credit  Agreement  dated  December 31, 1996.
This  agreement was amended on April 16, 1997 to increase the  commitment by $10
million for the purchase of BATCO and to provide  further  liquidity for working
capital needs. At June 30, 1997, the amount outstanding under this agreement was
$106.5 million. This Credit Agreement matures on October 31, 1998. Management is
currently  evaluating  various options to refinance,  restructure or extend this
facility and believes it will be successful in completing these activities prior
to the  maturity  date.  The Company has received a waiver from its Banks on the
covenant  default  which  resulted  from the charge for  discontinuing  stamping
operations at its Starboard Industries, Inc. subsidiary.


<PAGE>

The Company's JPE Canada  subsidiary has a credit agreement with a Canadian bank
to fund its operating  requirements and capital expenditures.  At June 30, 1997,
the borrowings under this facility total  approximately  $18 million.  Repayment
terms of borrowings under this facility vary based on the nature of the advance.
Currently,  $8.7 million is classified as short-term debt because the portion of
the  credit  agreement  for  operating  requirements  is payable on demand or on
December 31, 1997.  The total  commitment for operating  needs is  approximately
$10.1 million through  December 31, 1997,  reducing to $8.5 million in 1998 (Cdn
$14 million and $12 million,  respectively).  The term portion of this agreement
aggregates  approximately $9.2 million with monthly principal payments beginning
in October 1997 of approximately $72,000 (Cdn $100,000).  It is anticipated that
the cash flow from the Canadian operations will fund these future payments.

Working capital at June 30, 1997 increased to $48.2 million as compared to $42.1
million at December 31, 1996.  The increase in working  capital is due primarily
to  increased  customer  tooling  balances as a result of several  new  programs
related to 1997 and 1998 launches for the  Company's OEM trim group.  Management
is  anticipating  collection  of these  tooling  costs in the third  and  fourth
quarter of 1997.  Customer  tooling  costs are  normally  incurred  prior to the
production of parts and, upon approval by the customer,  these tooling costs are
reimbursed  by the  customer.  The delay  between the  expenditure  of funds for
tooling and reimbursement by the customer can be several months depending on the
program and the customer.  In addition,  at December 31, 1996,  receivables  and
inventories  were low due to the holiday  shut down by our OEM  customers.  Cash
used by operations  was $3.6 million for the reasons  mentioned  above.  Capital
spending for the six months  ending June 30, 1997 totaled  $7.4  million.  These
funds were provided through the various credit  agreements.  The Company expects
that it will satisfy its debt service,  working capital and capital  expenditure
requirements  through  cash flows  generated  by  operations  and, to the extent
necessary, through borrowings under the credit agreements.


<PAGE>

                           PART II. OTHER INFORMATION

                                    JPE, INC.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual  Meeting of  Shareholders  of JPE, Inc. was held on May 15, 1997, for
the purpose of electing two  directors of JPE, Inc. for a term to expire in 2000
and one  director  of JPE,  Inc.  for a term to expire in 1998.  Proxies for the
meeting were solicited pursuant to Section 14(a) of the Securities  Exchange Act
of  1934  and  there  was  no   solicitation   in  opposition  to   management's
solicitations.

Management's  nominees  for  directors  as listed in the  proxy  statement  were
elected with the following votes:

                                      Shares                    Shares
                                    Voted "For"               "Withheld"

     John Psarouthakis               2,687,508                   5,300
     Otto Gago                       2,687,258                   5,550
     C. William Mercurio             2,687,508                   5,300



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         a.  Exhibits:

               None


         b.  Reports on Form 8-K:

               On  April  30,  1997,  Registrant  filed a  report  on  Form  8-K
               reporting the  acquisition  of all of the capital stock of Brake,
               Axle and Tandem Company.
                  


               On May 14,  1997,  Registrant  filed  Amendment  1 to Form  8-K/A
               containing financial  statements for Registrant's  acquisition of
               all of the capital stock of Brake, Axle and Tandem Company.


<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 F. Fahrner
                                       -----------------------
                                        James J. Fahrner
                                        Senior Vice President and
                                        Chief Financial Officer
                                        (Principal Financial Officer and
                                        Principal Accounting Officer)


Date:  August 14, 1997


<PAGE>

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

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

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