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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 September 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.)


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


                                 (313) 662-2323
              (Registrant's telephone number, including area code)

             900 Victors Way, Suite 140, Ann Arbor, Michigan 48108
              (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 September 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 Balance Sheets ..............................   3
              - At September 30, 1997 and 1996 (unaudited)
                and December 31, 1996

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

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

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

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

Part II.  Other Information

     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 BALANCE SHEETS
                    (Amounts in Thousands, Except Share Data)
<CAPTION>
                                              At September 30,       At Dec. 31,
                                             1997          1996          1996
                                             ----          ----          ----
                                                 (Unaudited)
<S>                                        <C>           <C>           <C>

ASSETS
Current assets:
  Cash and cash equivalents .............  $    508      $    681      $  1,316
  Accounts receivable, net ..............    43,350        28,792        26,829
  Inventory .............................    44,394        33,003        37,963
  Other current assets ..................    11,916         5,447         8,688
                                           --------      --------      --------

    Total current assets ................   100,168        67,923        74,796

Property, plant and equipment, net ......    71,665        51,220        69,281
Goodwill, net ...........................    31,632        27,351        27,068
Other assets, net .......................     2,600         1,814         3,580
                                           --------      --------      --------
    Total assets ........................  $206,065      $148,308      $174,725
                                           ========      ========      ========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt .....  $  1,603      $    107      $    323
  Short-term debt .......................    10,545          --           8,120
  Accounts payable ......................    29,114        19,158        17,643
  Accrued liabilities ...................     6,299         4,947         6,190
  Income taxes payable ..................       189          --             382
                                           --------      --------      --------

    Total current liabilities ...........    47,750        24,212        32,658

Accrued liabilities .....................     1,914         1,147         1,547
Deferred income taxes ...................     3,725         2,251         3,184
Long-term debt, non-current .............   117,729        84,443       101,558
                                           --------      --------      --------

    Total liabilities ...................   171,118       112,053       138,947
                                           --------      --------      --------

Shareholders' equity:
  Preferred stock, 3,000,000
   authorized, no shares issued
   and outstanding ......................      --            --            --
  Common stock, no par value,
   15,000,000 authorized,
   4,602,180 and 4,582,480
   issued and outstanding at
   September 30, 1997 and
   December 31, 1996,  
   respectively, and 4,582,480
   shares issued and outstanding
   at September 30, 1996 ................    28,026        27,921        27,921
  Retained earnings .....................     6,932         8,334         7,857
  Foreign currency translation
   adjustment ...........................       (11)         --            --
                                           --------      --------      --------

    Total shareholders' equity ..........    34,947        36,255        35,778
                                           --------      --------      --------

    Total liabilities and
     shareholders' equity ...............  $206,065      $148,308      $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 Nine Months Ended September 30, 1997 and 1996
                  (Amounts in Thousands, Except Per Share Data)
                                   (Unaudited)

<CAPTION>
                                   Three Months                Nine Months
                                       Ended                     Ended
                                   September 30,              September 30,
                                1997        1996            1997         1996
                                ----        ----            ----         ----
<S>                            <C>         <C>            <C>          <C>
Net sales ...................  $70,298     $50,142        $215,330     $153,732

Cost of goods sold ..........   59,801      43,163         184,418      126,589
                               -------     -------        --------     --------

  Gross profit ..............   10,497       6,979          30,912       27,143

Charge for impairment
 of goodwill (Note D) .......     --         4,300            --          4,300

Discontinuance of stamping
 operations (Note E) ........     --          --             2,250         --

Selling, general and
 administrative expenses ....    7,293       6,686          21,936       18,667
                               -------     -------        --------     --------

  Operating profit (loss) ...    3,204      (4,007)          6,726        4,176

Other expense ...............        8        --               194         --

Interest expense, net .......    2,730       1,718           7,346        5,252
                               -------     -------        --------     --------

    Income (loss) before
     taxes ..................      466      (5,725)           (814)      (1,076)

Provision for (benefit
 from) income taxes .........      275      (1,819)            111           36
                               -------     -------        --------     --------

  Net income (loss) .........  $   191     $(3,906)       $  (925)     $ (1,112)
                               =======     =======        =======      ========


Earnings (loss) per share ...  $  0.04     $ (0.85)       $ (0.20)     $  (0.24)
                               =======     =======        =======      ========


Weighted average shares
 outstanding ................    4,604       4,590          4,602         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 Nine Months Ended September 30, 1997 and 1996
                             (Amounts in Thousands)
                                   (Unaudited)
<CAPTION>
                                                              Nine Months
                                                                 Ended
                                                             September 30,
                                                          1997           1996
                                                          ----           ----
<S>                                                     <C>            <C>
Cash flows from operating activities:
  Net loss ...........................................  $  (925)       $ (1,112)
  Adjustments to reconcile net loss to
   net cash provided by (used for)
   operating activities:
     Depreciation and amortization ...................    7,426           5,531
     Loss on impairment of goodwill ..................     --             4,300
     Discontinuance of stamping operations ...........    2,250            --
     Disposal of property and equipment ..............       33             405
     Changes in operating assets and
      liabilities:
       Accounts receivable ...........................  (14,610)         (5,382)
       Inventory .....................................   (4,760)          1,392
       Other current assets ..........................   (1,690)            359
       Accounts payable ..............................    8,596           4,002
       Accrued liabilities ...........................   (1,767)           (756)
       Income taxes ..................................     (193)           (174)
       Deferred income taxes .........................      541          (1,078)
                                                        -------        --------

         Net cash provided by (used for)
          operating activities .......................   (5,099)          7,487
                                                        -------        --------

Cash flows from investing activities:
  Purchase of property and equipment .................  (10,687)         (8,889)
  Cash proceeds from sale of property
   and equipment .....................................    1,200            --
  Acquisition of BATCO ...............................   (5,518)           --
                                                        -------        --------

         Net cash used for investing
          activities .................................  (15,005)         (8,889)
                                                        -------        --------

Cash flows from financing activities:
  Net borrowings under revolving loan ................   15,621          11,275
  Repayments of note payable .........................   (1,540)        (10,100)
  Net borrowings under Canadian credit
   facility ..........................................    3,501            --
  Net borrowings under capital lease
   arrangements ......................................    1,571            --
  Sale of common stock ...............................       77             410
  Tax benefit from exercised stock
   options ...........................................       28             210
                                                        -------        --------

         Net cash provided by financing
          activities .................................   19,258           1,795
                                                        -------        --------

  Currency translation effect on cash ................       38            --
                                                        -------        --------

Cash and cash equivalents:
  Net increase (decrease) in cash ....................     (808)            393

  Cash and cash equivalents,
   beginning of period ...............................    1,316             288
                                                        -------        --------

  Cash and cash equivalents,
   end of period .....................................  $   508        $    681
                                                        =======        ========

</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, Except Per Share Data)


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 or are described in the footnotes herein. The consolidated
     financial  statements  should  be read in  conjunction  with the  financial
     statements  and notes thereto  contained in the JPE, Inc.  Annual Report on
     Form 10-K for the year ended  December  31,  1996 and the Form 10-Q for the
     quarters ended March 31, 1997 and June 30, 1997.

     December 31, 1996 disclosures within the financial statements and footnotes
     have been derived  from the audited  financial  statements  included in the
     aforementioned  Form 10-K;  information  at September 30, 1997 and 1996 and
     for the periods then ended is unaudited.


B.   INVENTORY:

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

     Finished goods ........  $19,030            $15,953            $15,457
     Work in process .......    4,337              4,219              4,811
     Raw material ..........   18,394             10,142             15,116
     Tooling ...............    2,633              2,689              2,579
                              -------            -------            -------

                              $44,394            $33,003            $37,963
                              =======            =======            =======
</TABLE>

<PAGE>

                                    JPE, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except Per Share Data)


C.   NEW FINANCIAL ACCOUNTING STANDARDS:

     In February 1997, the Financial Accounting Standards Board issued Statement
     of Financial  Accounting  Standards ("SFAS") 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 that there will be no
     material change in its reported earnings per share amounts.


     Beginning  in  1998,  the  Company  is  required  to adopt  SFAS  No.  130,
     "Reporting  Comprehensive  Income"  and SFAS No.  131,  "Disclosures  about
     Segments  of an  Enterprise  and  Related  Information."  SFAS No. 130 will
     require  the  Company  to  report  comprehensive  income  as  part  of  the
     consolidated  financial  statements.   The  Company  expects  that  foreign
     currency  translation  adjustments  will be the principal  additional  item
     required to be presented as comprehensive income. SFAS No. 131 will require
     the Company to report certain  information about operating  segments in the
     consolidated financial statements.  The Company is currently evaluating the
     provisions of this  statement to determine its impact upon current  segment
     disclosures.


D.   GOODWILL IMPAIRMENT:

     During the third quarter of 1996,  management identified that a significant
     change  had  occurred  in  the  product  mix  of  Industrial  &  Automotive
     Fasteners,  Inc. ("IAF") since it was acquired in March 1995. In accordance
     with SFAS 121,  "Accounting for the Impairment of Long-Lived Assets and for
     Long-Lived  Assets  to  be  Disposed  of,"  management  recorded  a  $4,300
     impairment  writedown of the goodwill  associated  with the  acquisition of
     IAF.  The goodwill  was  originally  valued at $6,820 when IAF was acquired
     and, subsequent to the adjustment,  had a net unamortized carrying value of
     approximately  $2,140 as of September 30, 1996, based on the then estimated
     current fair market value of the IAF business which was acquired.

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. ("Starboard" or "SBI"), a wholly-owned  subsidiary of the Company. The
     plan included resourcing stamped parts to other OEM 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:

<PAGE>

                                    JPE, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except Per Share Data)


E.   DISCONTINUANCE OF STAMPING OPERATIONS (CONTINUED):

     Loss on sale of fixed assets ...............................  $1,348
     Severance expenses .........................................     365
     Adjustment to net realizable value of inventory ............     407
     Other ......................................................     130
                                                                   ------
     Total ......................................................  $2,250
                                                                   ======


F.   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 $5,518 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 $4,000 if certain  sales levels are achieved  over
     the next five years.  The value of assets acquired 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
                                                                   =======

<PAGE>

                                    JPE, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                  (Amounts in Thousands, Except Per Share Data)


F.   BATCO ACQUISITION (CONTINUED):

     The following  unaudited pro forma summary  information for the nine months
     ended  September  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 commission expense at JPE Canada, reduced depreciation on the
     revaluation  of property,  plant and equipment  and the related  income tax
     effects:

                                              Nine Months Ended September 30,
                                                  1997              1996
                                                  ----              ----

     Revenues ...............................   $220,840          $223,516
     Operating profit .......................      6,455             5,900
     Loss before income taxes ...............     (1,246)           (1,245)
     Net loss ...............................     (1,175)           (1,224)
     Loss per common share ..................   $  (0.26)         $  (0.27)


<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  included in the Company's Annual Report
on Form 10-K to assist in understanding the Company's results of operations, and
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

THIRD QUARTER ENDED SEPTEMBER 30, 1997 COMPARED
TO THIRD QUARTER ENDED SEPTEMBER 30, 1996

Net sales for the third  quarter of 1997 were $70.3  million  compared  to $50.1
million  for the same  quarter  last  year.  The net  sales  increase  of 40% is
primarily attributable to the acquisitions 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  ("OEMs")  and  BATCO is a
supplier of brake hardware,  wheel attaching and suspension  parts for the heavy
duty truck and  trailer  aftermarket.  In addition  to these  acquisitions,  the
Company  experienced  slightly higher sales in all three of its operating groups
due to new  product  line  offerings  in the  aftermarket  and  launches  of new
programs for OEM  customers  during 1997.  For the quarter  ended  September 30,
1997, net sales for the Company were  approximately 65% to OEM customers and 35%
to aftermarket customers

Gross  profit  increased  50% to $10.5  million  in the  third  quarter  of 1997
compared with $7.0 million for the third quarter ended  September 30, 1996.  The
gross margin percentages were 14.9% and 13.9% for the third quarters of 1997 and
1996, respectively.  During the third quarter of 1996, the Company recorded $1.4
million of inventory adjustments relating to slow-moving/obsolete  inventory and
physical  inventory  adjustments.  Adjusting  for this one  time  write-down  of
inventory,  gross profit percentage for the third quarter of 1996 was 16.7%. The
decrease from adjusted gross profit  percentage is a result of operating results
at the Company's JPE Canada and Starboard  subsidiaries which are lower than the
other JPE companies. The lower gross profit percentage at JPE Canada is a result
of JPE Canada being  purchased out of bankruptcy in December  1996.  Starboard's
lower  gross  profit  percentage  is a  result  of the  stamping  production,  a
manufacturing process which is being discontinued.

The  Company  has  on-going  turn-around  plans to  improve  both JPE Canada and
Starboard.  The plan related to JPE Canada is focused on improving  JPE Canada's
profitability  through  reducing  scrap,  premium  freight,  and overtime  while
improving  productivity.  Management  believes  that JPE Canada will continue to
show improvement in its gross profit percentage with the continued  execution of
this turn-around plan. The Starboard  turn-around plan details actions necessary
to exit the stamping  operation at Starboard's  East Tawas,  Michigan  facility.
This plan  involved  resourcing  stamped  parts to other third party  suppliers,
reducing its  workforce  and selling the stamping  assets.  All of these actions
were  completed by the end of the third quarter 1997.  Management  believes that
these actions,  along with a relayout of the manufacturing  facility will return
Starboard's operations to profitability.

The decrease in gross profit  percentage  discussed above is partially offset by
significant   improvements  in  gross  margin  at  the  Company's  Industrial  &
Automotive  Fasteners,  Inc.  ("IAF")  subsidiary.  The  improvement at IAF is a
result of the continued  execution of a turn-around  plan which includes a major
plant  relayout,   upgrading  of  existing  equipment  and  stronger  production
controls.


<PAGE>

During  the third  quarter of 1996,  management  identified  that a  significant
change had  occurred in the  product  mix of IAF since it was  acquired in March
1995. In accordance with SFAS 121,  "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of," management  recorded a $4.3
million impairment  writedown of the goodwill associated with the acquisition of
IAF. The goodwill  was  originally  valued at $6.8 million when IAF was acquired
and,  subsequent to the  adjustment,  had a net  unamortized  carrying  value of
approximately  $2.1 million as of September 30, 1996,  based on the current fair
market value of the IAF business  which was acquired.  This  adjustment  reduced
goodwill amortization by $172,000 on an annual basis.

Selling,  general and administrative  expenses increased 9.1% to $7.3 million in
the third  quarter  of 1997 over $6.7  million  for the third  quarter  of 1996.
Selling,  general and administrative  expense for the third quarters of 1997 and
1996 was  10.4% and  13.3% of net  sales,  respectively.  Selling,  general  and
administrative expense for the three months ending September 30, 1996 includes a
$850,000 charge related to the write-down of an equity investment related to the
SBI business and  severance  costs for changes in senior  management  at IAF and
SBI. Adjusting for this one time event, the selling,  general and administrative
expense  percentage  for the third  quarter of 1996 was 11.6%.  The  decrease in
adjusted selling,  general and administrative  expense percentage is a result of
the  acquisition  of  JPE  Canada  which  has a  lower  administrative  overhead
structure  than the other JPE businesses  and the  acquisition  of BATCO,  which
increased  Dayton Parts,  Inc.'s ("Dayton  Parts") sales without a proportionate
increase in its selling, general and administrative expense.

Net  interest  expense  increased  to $2.7  million for the three  months  ended
September  30,  1997 as  compared to $1.7  million  for the three  months  ended
September  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  businesses;  and
increased customer tooling balances related to several new 1997 and 1998 program
launches in the OEM trim group.

Income tax expense for the quarter  ending  September  30, 1997 was  $275,000 as
compared to income tax benefit of $1.8 million  recorded  during the same period
in 1996. The change is a result of pre-tax earnings in the third quarter of 1997
versus a pre-tax loss in the same period in 1996. As a result of the loss in the
third quarter 1996, the Company recorded a federal income tax benefit, partially
offset by state and foreign  income taxes.  The effective tax rate for the third
quarter  1997 is 59%,  which is a  result  of  higher  pre-tax  income  from JPE
companies which reside in states with income based taxes.

Net income  for the three  months  ended  September  30,  1997 was  $191,000  as
compared to net loss of $3.9 million for the quarter  ended  September 30, 1996.
The change is attributable to the matters  summarized above.  Earnings per share
during the third  quarter  were $0.04 as  compared  to a loss per share of $0.85
during  the  third  quarter  of  1996.  The  improvement  is due to the  factors
mentioned above.  The weighted average shares  outstanding for the third quarter
of 1997 were 4,604,000 as compared to 4,590,000 for the third quarter of 1996.


<PAGE>

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED
TO NINE MONTHS ENDED SEPTEMBER 30, 1996

Net sales for the nine  months  ended  September  30, 1997  increased  to $215.3
million from $153.7  million for the nine months ended  September  30, 1996,  an
increase of 40%. The increase in net sales is attributable  to the  acquisitions
of JPE Canada and BATCO as  mentioned  in the  quarterly  discussion  above.  In
addition to these acquisitions, the Company experienced slightly higher sales in
all three of its  operating  groups due to new  product  line  offerings  in the
aftermarket and launches of new programs for OEM customers  during 1997. For the
nine  months  ended   September  30,  1997,  net  sales  for  the  Company  were
approximately 68% to OEM customers and 32% to Aftermarket customers.

Gross profit  increased 14% to $30.9 million for the nine months ended September
30, 1997 as compared with $27.1 million for the  comparable  period of the prior
year. The increase is related to the  acquisitions  of JPE Canada and BATCO,  as
well as higher sales volumes.  Gross profit percentages were 14.4% and 17.7% for
1997 and 1996,  respectively.  This  decline in gross margin  percentage  is due
primarily to the acquisition of JPE Canada which was purchased out of bankruptcy
in 1996 and lower operating  performance at the Company's Starboard  subsidiary,
partially  offset by factors  mentioned in the quarterly  discussion  above. The
decline  in  Starboard's  performance  is a result of  production  difficulties,
higher scrap and pricing issues in its stamping operations.

During the second quarter of 1997, management  implemented a plan to improve the
operating  results of its  Starboard  business.  The plan  resulted in Starboard
discontinuing  its stamping  operations on September 30, 1997.  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 severance and
other costs directly  related to the stamping  business.  Through the end of the
third  quarter  1997,  Starboard  had  resourced  its stamped parts to other OEM
suppliers, sold its stamping assets and reduced its workforce in accordance with
the plan.  The final stage of the plan involves a major  relayout of Starboard's
East Tawas,  Michigan  production facility which will be completed by the second
quarter of 1998.

See the quarterly  discussion  for an explanation of the $4.3 million charge for
impairment of goodwill.

Selling,  general and  administrative  expenses increased 17.5% to $21.9 million
for the nine months  ended  September  30, 1997 over $18.7  million for the nine
months ended September 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  10.2%  for the nine  months  ending
September 30, 1997 as compared to 12.1% for the same period in 1996. The decline
in this  percentage is attributable to the acquisition of JPE Canada which has a
lower overhead structure than the other JPE businesses,  partially offset by the
one-time charge recorded in the third quarter of 1996 mentioned in the quarterly
discussion above.


<PAGE>

See  quarterly  discussion  for  explanation  of  increase in  operating  profit
percentage.

Net  interest  expense  increased  to $7.3  million  for the nine  months  ended
September  30,  1997 as  compared  to $5.3  million  for the nine  months  ended
September  30, 1996.  The higher  interest cost is  attributable  to the factors
mentioned in the quarterly discussion above.

As a result of the year to date  pre-tax  loss,  the  Company  has  reduced  its
federal  income tax expense for the nine months  ending  September  30, 1997 and
1996.  The provision for income taxes for the first nine months of both 1997 and
1996 represents  state income taxes,  partially offset by the federal income tax
benefit.

Net loss for the nine months ended  September  30, 1997 was $925,000 as compared
to $1.1 million for the nine months ended  September  30, 1996.  The decrease in
net loss is a result of  factors  mentioned  above.  Loss per share for the nine
months ending September 30, 1997 was $0.20 as compared to $0.24 during the first
nine months of 1996.  The  decrease in net loss is due to the factors  mentioned
above and an increase in the weighted average shares  outstanding.  The weighted
average shares  outstanding  for the first nine months of 1997 were 4,602,000 as
compared to 4,585,000 for the same period in 1996.


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 Third
Amended and Restated  Credit  Agreement dated December 31, 1996 providing for an
aggregate of $120 million in credit  lines.  At September  30, 1997,  the amount
outstanding  under this  agreement  was $107.8  million.  This Credit  Agreement
matures on October 27, 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's JPE Canada  subsidiary has a credit agreement with a Canadian bank
to fund its operating  requirements and capital  expenditures.  At September 30,
1997, the  borrowings  under this facility  total  approximately  $19.8 million.
Repayment  terms of  borrowings  under this facility vary based on the nature of
the advance.  Currently,  $10.5 million is classified as short-term debt because
the portion of the credit agreement for operating requirements is payable on


<PAGE>

demand or on December 31, 1997.  The total  commitment  for  operating  needs is
approximately  $10.6 million through December 31, 1997, reducing to $8.5 million
in 1998  (Cdn  $14  million  and $12  million,  respectively).  The  Company  is
currently  reviewing  its capital  needs with the  Canadian  bank to continue to
provide adequate financing for JPE Canada's operations. The term portion of this
agreement aggregates  approximately $8.4 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 September 30, 1997 increased to $52.4 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;
additional inventories related to new product line offerings in the aftermarket;
and  the  impact  on  inventory  from  the  BATCO  acquisition.   Management  is
anticipating  collection  of  approximately  $3 million of tooling  costs in the
fourth  quarter  of 1997 and the  remainder  of the  balance  in 1998.  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 to over a year  depending on the program and the
customer.  The BATCO acquisition  resulted in increased  inventories in order to
achieve acceptable  customer order fill rates. In addition to these factors,  at
December 31, 1996,  receivables and inventories were low due to the holiday shut
down by our OEM  customers.  Cash used by  operations  was $5.1  million for the
reasons mentioned above.  Capital investment spending for the nine months ending
September 30, 1997 totaled $10.7 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.



                           PART II. OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


         a.  Exhibits:

             10.1  Amendment No. 2 dated as of June 30, 1997 to Third
                   Amended and Restated Credit Agreement

         b.  Reports 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
                                         Senior Vice President and
                                         Chief Financial Officer
                                         (Principal Financial Officer and
                                         Principal Accounting Officer)


Date:  November 12, 1997


<PAGE>

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

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

 10.1                         Amendment No. 2 dated as of June 30, 1997
                              to Third Amended and Restated Credit Agreement

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