August 31, 1998

JPE, Inc.
775 Technology Drive
Suite 200
Ann Arbor, Michigan 48108
Attention:  Mr. James J. Fahrner and Ms. Donna L. Bacon

RE:  FORBEARANCE  AGREEMENT  AMONG  COMERICA  BANK,  NBD BANK,  NATIONAL BANK OF
     CANADA,  HARRIS  TRUST  AND  SAVINGS  BANK,  AND  BANK  ONE,  DAYTON,  N.A.
     (COLLECTIVELY,  THE  "BANKS"),  COMERICA  BANK,  AS  AGENT  FOR  THE  BANKS
     ("AGENT"), JPE, INC. ("COMPANY") AND ALLPARTS, INCORPORATED ("API"), DAYTON
     PARTS, INC. ("DPI"), SAC CORPORATION,  STARBOARD INDUSTRIES,  INC. ("SBI"),
     INDUSTRIAL  &  AUTOMOTIVE  FASTENERS,  INC.  ("IAF"),  PLASTIC  TRIM,  INC.
     ("PTI"), BRAKE, AXLE AND TANDEM COMPANY CANADA INC. AND JPE FINISHING, INC.
     (COLLECTIVELY,   "GUARANTORS")   DATED   AUGUST  10,   1998   ("FORBEARANCE
     AGREEMENT")

Dear Mr. Fahrner and Ms. Bacon:

Company and Guarantors have requested that Banks extend the forbearance provided
for in the Forbearance Agreement.

Subject to written  acceptance by Company and Guarantors of the following  terms
and conditions,  Agent and Banks are willing to grant certain accommodations and
to forbear until September 4, 1998,  subject to earlier  termination as provided
below, from further action to collect the Indebtedness:

1.   All  capitalized   terms  not  defined  in  this  first  amendment  to  the
     Forbearance Agreement ("First Amendment") shall have the meanings described
     in the Forbearance Agreement and/or the Loan Documents.

2.   Except as  modified  by this  First  Amendment,  the  Indebtedness  and the
     financing  arrangements  among Agent,  Banks,  Company and Guarantors shall
     continue to be  governed  by the  covenants,  terms and  conditions  of the
     Forbearance  Agreement  and the Loan  Documents,  which  are  ratified  and
     confirmed.  The liens and  security  interests  granted  to Agent and Banks
     under the Loan  Documents and the  Forbearance  Agreement are also ratified
     and confirmed by Company and  Guarantors.  This Agreement  shall be binding
     upon and shall inure to the benefit of Bank,  Company and  Guarantors,  and
     their respective successors and assigns.

3.   Company  and  Guarantors  acknowledge  that  Agent  and  Banks are under no
     obligation  to advance  funds or extend  credit to Company  and  Guarantors
     under the Forbearance Agreement,  as amended, the Credit Agreement or other
     Loan Documents, or otherwise.

4.   Subject to  maintaining  the advisory  Advance  Formula equal to or greater
     than the  aggregate of (i) Advances  under the  Revolving  Credit and Swing
     Line and (ii) the Letter of Credit  Obligations,  and provided there are no
     defaults under the terms of the Forbearance  Agreement,  as amended, and no
     further  defaults  under  the Loan  Documents,  Banks  may,  in their  sole
     discretion, continue to advance to Company under the Revolving Credit Loan,
     in accordance with the Loan  Documents,  as amended,  through  September 4,
     1998. Company and Guarantors agree that:

     (a)  from August 31,  1998  forward,  the portion of the funds  borrowed by
          Company  for the  benefit  of PTI  and/or  SBI shall be limited to the
          aggregate  amount of funds collected by PTI and SBI and applied to the
          Indebtedness  from and after  August  31,  1998 (both  borrowings  and
          collections shall be computed on a cumulative basis); and

     (b)  neither  Company  nor any of the  Guarantors  shall make  intercompany
          transfers  of any kind to or for the benefit of PTI and/or SBI,  other
          than as permitted by subparagraph (a) above.

     In order to administer the foregoing covenants, Company agrees to establish
     new funding account(s) for PTI and/or SBI.

<PAGE>

5.   COMPANY,  GUARANTORS,  AGENT AND BANKS ACKNOWLEDGE AND AGREE THAT THE RIGHT
     TO TRIAL BY JURY IS A CONSTITUTIONAL  ONE, BUT THAT IT MAY BE WAIVED.  EACH
     PARTY,  AFTER  CONSULTING  (OR HAVING HAD THE  OPPORTUNITY TO CONSULT) WITH
     COUNSEL OF THEIR CHOICE,  KNOWINGLY AND  VOLUNTARILY,  AND FOR THEIR MUTUAL
     BENEFIT  WAIVES  ANY  RIGHT  TO TRIAL  BY JURY IN THE  EVENT OF  LITIGATION
     REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
     FIRST  AMENDMENT,  THE  FORBEARANCE  AGREEMENT,  THE LOAN  DOCUMENTS OR THE
     INDEBTEDNESS.

6.   COMPANY AND GUARANTORS,  IN EVERY CAPACITY,  INCLUDING, BUT NOT LIMITED TO,
     AS SHAREHOLDERS,  PARTNERS, OFFICERS, DIRECTORS, INVESTORS AND/OR CREDITORS
     OF COMPANY  AND/OR  GUARANTORS,  OR ANY ONE OR MORE OF THEM,  HEREBY WAIVE,
     DISCHARGE AND FOREVER RELEASE AGENT, BANKS, AND THEIR EMPLOYEES,  OFFICERS,
     DIRECTORS, ATTORNEYS,  STOCKHOLDERS AND SUCCESSORS AND ASSIGNS, FROM AND OF
     ANY AND ALL CLAIMS,  CAUSES OF ACTION,  DEFENSES,  COUNTERCLAIMS OR OFFSETS
     AND/OR ALLEGATIONS COMPANY AND/OR GUARANTORS MAY HAVE, OR MAY HAVE MADE, OR
     ARE BASED ON FACTS OR  CIRCUMSTANCES  ARISING,  AT ANY TIME UP THROUGH  AND
     INCLUDING  THE DATE OF THIS  FIRST  AMENDMENT,  WHETHER  KNOWN OR  UNKNOWN,
     AGAINST ANY OR ALL OF AGENT, BANKS, THEIR EMPLOYEES,  OFFICERS,  DIRECTORS,
     ATTORNEYS, STOCKHOLDERS AND SUCCESSORS AND ASSIGNS.

Agent and  Banks  reserve  the right to  terminate  their  forbearance  prior to
September  4, 1998 in the event of any new  defaults  under the Loan  Documents,
defaults under this First  Amendment,  in the event of further  deterioration in
the financial  condition of Company or Guarantors  or further  deterioration  in
Agent's or Banks' collateral  position,  and/or in the event Agent or Banks, for
any reason, believes that the prospect of payment or performance is impaired.

Very truly yours,

COMERICA BANK, Agent

By:  /s/ Cynthia B. Jones
     -------------------------
     Cynthia B. Jones

Its: Vice President
Special Assets Group
P.O. Box 75000
Detroit, Michigan 48275-3205
(313) 222-3780
(313) 222-5706 Fax


COMERICA BANK                                 NBD BANK

By:  /s/ Cynthia B. Jones                     By:  /s/ Phillip D. Martin
     -------------------------                     -------------------------
Its: Vice President                           Its: Vice President


NATIONAL BANK OF CANADA                       HARRIS TRUST and SAVINGS BANK

By:  /s/ Duane K. Bedard                      By:  /s/ Sandra J. Sanders
     -------------------------                     -------------------------
Its: Vice President                           Its: Sr. Vice President

By:  /s/ Angus White
     -------------------------
Its: Vice President


BANK ONE, DAYTON, N.A.

By:  /s/ Scott E. Roman
     -------------------------
Its: Assistant Vice President

<PAGE>


ACKNOWLEDGED AND AGREED:

JPE, INC.                                     DAYTON PARTS, INC.

By:  /s/ Donna L. Bacon                       By:  /s/ Donna L. Bacon
     -------------------------                     -------------------------
Its: President                                Its: Vice President
Date: 9/1/98                                  Date: 9/1/98


ALLPARTS, INCORPORATED                        SAC CORPORATION

By:  /s/ Donna L. Bacon                       By:  /s/ Donna L. Bacon
     -------------------------                     -------------------------
Its: Vice President                           Its: Vice President
Date: 9/1/98                                  Date: 9/1/98


STARBOARD INDUSTRIES, INC.                    BRAKE, AXLE AND TANDEM
                                              COMPANY CANADA INC.

By:  /s/ Donna L. Bacon                       By:  /s/ Donna L. Bacon
     -------------------------                     -------------------------
Its: Vice President                           Its: Vice President
Date: 9/1/98                                  Date: 9/1/98


INDUSTRIAL & AUTOMOTIVE                       JPE FINISHING, INC.
FASTENERS, INC.

By:  /s/ Donna L. Bacon                       By:  /s/ Donna L. Bacon
     -------------------------                     -------------------------
Its: Vice President                           Its: Vice President
Date: 9/1/98                                  Date: 9/1/98


PLASTIC TRIM, INC.

By:  /s/ Donna L. Bacon
     -------------------------
Its: Vice President
Date: 9/1/98