10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR QUARTERLY PERIOD ENDED SEPTEMBER 28, 2003
COMMISSION FILE NUMBER 1-12068

METALDYNE CORPORATION
(Exact name of registrant as specified in its charter)

Delaware				38-2513957
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)
47659 Halyard Drive, Plymouth, Michigan				48170-2429
(Address of principal executive offices)				(Zip Code)

(734) 207-6200

(Registrant's telephone number)

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             

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes                 No      X   

There is currently no public market for the registrant's common stock.

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date.

Class				Shares outstanding at October 31, 2003
Common stock, par value $1 per share					43,871,745

METALDYNE CORPORATION

INDEX

								Page No.
Part I.				Financial Information
Item 1.				Financial Statements
				Consolidated Balance Sheets – September 28, 2003 and December 29, 2002					2
				Consolidated Statements of Operations for the Three and Nine Months Ended September 28, 2003 and September 29, 2002					3
				Consolidated Statements of Cash Flows for the Nine Months Ended September 28, 2003 and September 29, 2002					4
				Notes to Consolidated Financial Statements					5-23
Item 2.				Management's Discussion and Analysis of Financial Condition and Results of Operations					24-40
Item 3.				Quantitative and Qualitative Disclosure About Market Risk					40
Item 4.				Controls and Procedures					41
Part II.				Other Information and Signature					42-43

1

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements

METALDYNE CORPORATION
CONSOLIDATED BALANCE SHEET
September 28, 2003 and December 29, 2002
(Dollars in thousands except per share amounts)

				September 28, 2003				December 29, 2002
				(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents				$	—			$	19,130
Receivables, net:
Trade, net of allowance for doubtful accounts					159,940				147,670
Affiliates					19,190				27,820
Other					9,980				11,380
Total receivables, net					189,110				186,870
Inventories					80,670				76,820
Deferred and refundable income taxes					1,590				23,550
Prepaid expenses and other assets					38,750				29,140
Total current assets					310,120				335,510
Equity investments in affiliates					144,580				147,710
Property and equipment, net					717,260				697,510
Excess of cost over net assets of acquired companies					552,530				552,100
Intangible and other assets					268,370				286,220
Total assets				$	1,992,860			$	2,019,050
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable				$	167,870			$	186,440
Accrued liabilities					131,310				108,330
Current maturities, long-term debt					7,140				99,900
Total current liabilities					306,320				394,670
Long-term debt					765,440				668,960
Deferred income taxes					117,970				146,510
Other long-term liabilities					132,580				143,300
Total liabilities					1,322,310				1,353,440
Redeemable preferred stock, 545,154 shares outstanding					71,510				64,510
Redeemable restricted common stock, 0.8 million and 1.7 million shares outstanding, respectively					17,360				23,790
Less: Restricted unamortized stock awards					(530	)			(3,120	)
Total redeemable stock					88,340				85,180
Preferred stock (non-redeemable), $1 par, Authorized: 25 million; Outstanding: None					—				—
Common stock, $1 par, Authorized: 250 million; Outstanding: 42.7 million and 42.6 million shares, respectively					42,730				42,650
Paid-in capital					686,130				684,870
Accumulated deficit					(172,400	)			(147,100	)
Accumulated other comprehensive income					25,750				10
Total shareholders' equity					582,210				580,430
Total liabilities, redeemable stock and shareholders' equity				$	1,992,860			$	2,019,050

See accompanying notes to the consolidated financial statements.

2

METALDYNE CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands except per share data)

				Three Months Ended								Nine Months Ended
				(Unaudited)								(Unaudited)
				September 28, 2003				September 29, 2002				September 28, 2003				September 29, 2002
Net sales				$	346,280			$	352,150			$	1,117,890			$	1,442,480
Cost of sales					(311,160	)			(303,910	)			(990,740	)			(1,193,480	)
Gross profit					35,120				48,240				127,150				249,000
Selling, general and administrative expenses					(26,070	)			(32,590	)			(81,860	)			(145,840	)
Restructuring charges					(3,220	)			(1,120	)			(7,080	)			(1,120	)
Legacy restricted stock award expense					(950	)			(1,050	)			(2,430	)			(4,210	)
Operating profit					4,880				13,480				35,780				97,830
Other expense, net:
Interest expense					(18,690	)			(17,780	)			(53,810	)			(74,400	)
Loss on repurchase of debentures and early retirement of term loans					—				(6,860	)			—				(68,860	)
Loss on interest rate arrangements upon early retirement of term loans					—				—				—				(7,550	)
Equity earnings (loss) from affiliates, net					1,130				(2,240	)			(1,580	)			90
Other, net					(1,250	)			(1,010	)			(6,470	)			(8,690	)
Other expense, net					(18,810	)			(27,890	)			(61,860	)			(159,410	)
Loss before income taxes and cumulative effect of change in accounting principle					(13,930	)			(14,410	)			(26,080	)			(61,580	)
Income tax benefit					(4,360	)			(3,020	)			(7,620	)			(41,260	)
Loss before cumulative effect of change in accounting principle					(9,570	)			(11,390	)			(18,460	)			(20,320	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				—				(36,630	)
Net loss					(9,570	)			(11,390	)			(18,460	)			(56,950	)
Preferred stock dividends					2,340				3,570				6,840				6,980
Loss attributable to common stock				$	(11,910	)		$	(14,960	)		$	(25,300	)		$	(63,930	)
Basic earnings (loss) per share:
Before cumulative effect of change in accounting principle less preferred stock dividends				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(0.64	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				—				(0.86	)
Net loss attributable to common stock				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(1.50	)
Diluted earnings (loss) per share:
Before cumulative effect of change in accounting principle less preferred stock dividends				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(0.64	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				—				(0.86	)
Net loss attributable to common stock				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(1.50	)

See accompanying notes to the consolidated financial statements.

3

METALDYNE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)

				Nine Months Ended
				(Unaudited)
				September 28, 2003				September 29, 2002
Operating activities:
Net loss				$	(18,460	)		$	(56,950	)
Adjustments to reconcile net cash provided by (used for) operating activities:
Depreciation and amortization					78,790				88,380
Legacy stock award expense					2,430				4,210
Debt fee amortization					1,540				4,040
Deferred income taxes					(27,220	)			2,060
Non-cash interest expense (interest accretion)					5,340				11,320
Loss on interest rate arrangements					—				7,550
Equity (earnings) losses from affiliates, net of dividends					1,580				(90	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				36,630
Loss on repurchase of debentures and early retirement of term loans					—				68,860
Other, net					(6,080	)			2,130
Changes in assets and liabilities, net of acquisition/disposition of business:
Accounts receivable					4,210				(60,260	)
Net repayments of accounts receivable sale					—				(138,360	)
Inventory					(3,940	)			4,370
Deferred and refundable income taxes					32,430				(20,000	)
Prepaid expenses and other assets					(10,350	)			(5,510	)
Accounts payable and accrued liabilities					(16,270	)			(42,300	)
Net cash provided by (used for) operating activities					44,000				(93,920	)
Investing activities:
Capital expenditures					(82,630	)			(78,970	)
Proceeds from sale/leaseback of fixed assets					8,460				33,370
Disposition of businesses to a related party					22,570				840,000
Proceeds from sale of TriMas shares					20,000				—
Acquisition of business, net					(7,650	)			—
Investment in joint venture					(20,000	)			—
Other, net					—				(3,810	)
Net cash provided by (used for) investing activities					(59,250	)			790,590
Financing activities:
Proceeds of term loan facilities					—				400,000
Principal payments of term loan facilities					(1,000	)			(1,112,450	)
Proceeds of revolving credit facility					180,000				319,800
Principal payments of revolving credit facility					(180,000	)			(319,800	)
Proceeds of senior subordinated notes due 2012					—				250,000
Principal payments of convertible subordinated debentures, due 2003 (net of $1.2 million non-cash portion of repurchase)					—				(205,290	)
Proceeds of other debt					6,690				1,120
Principal payments of other debt					(7,320	)			(4,540	)
Capitalization of debt refinancing fees					(2,250	)			(11,590	)
Penalties on early extinguishment of debt					—				(6,480	)
Net cash used for financing activities					(3,880	)			(689,230	)
Net increase (decrease) in cash					(19,130	)			7,440
Cash and cash equivalents, beginning of period					19,130				—
Cash and cash equivalents, end of period				$	—			$	7,440
Supplementary cash flow information:
Cash paid (refunded) for income taxes, net				$	(27,700	)		$	(5,160	)
Cash paid for interest				$	39,590			$	78,190

See accompanying notes to the consolidated financial statements.

4

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Business and Other Information

We ("Metaldyne" or the "Company") are a leading global manufacturer of highly engineered metal components for the global light vehicle market. Our products include metal-formed and precision-engineered components and modular systems used in vehicle transmission, engine and chassis applications.

In the opinion of Company management, the unaudited financial statements contain all adjustments, including adjustments of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. These statements should be read in conjunction with the Company's financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 29, 2002 (the "2002 Form 10-K"), as amended by Item 7 of the Company's Current Report on Form 8-K filed August 25, 2003. The results of operations for the period ended September 28, 2003 are not necessarily indicative of the results for the full year.

The Company's fiscal year ends on the Sunday nearest December 31. The Company's fiscal quarters end on the Sundays nearest March 31, June 30, and September 30. All year and quarter references relate to the Company's fiscal year and fiscal quarters unless otherwise stated.

2.    Stock Options and Awards

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of FASB Statement No. 123" effective for the fiscal year ended December 29, 2002. The following disclosure for the financial statements for the period ended September 28, 2003 assumes that the Company continues to account for stock-based employee compensation using the intrinsic value method under Accounting Principles Board ("APB") No. 25 and related interpretations.

The Company has one stock-based employee compensation plan. No stock-based employee compensation cost is reflected in net income, as all options granted under this plan had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," to stock-based employee compensation.

				(In thousands, except per share amounts)
				Three Months Ended								Nine Months Ended
				September 28, 2003				September 29, 2002				September 28, 2003				September 29, 2002
Net loss attributable to common stock, as reported				$	(11,910	)		$	(14,960	)		$	(25,300	)		$	(63,930	)
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects					(400	)			(470	)			(1,340	)			(1,410	)
Pro forma net loss attributable to common stock				$	(12,310	)		$	(15,430	)		$	(26,640	)		$	(65,340	)
Loss per share:
Basic — as reported				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(1.50	)
Basic — pro forma for stock-based compensation				$	(0.29	)		$	(0.36	)		$	(0.62	)		$	(1.53	)
Diluted — as reported				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(1.50	)
Diluted — pro forma for stock-based compensation				$	(0.29	)		$	(0.36	)		$	(0.62	)		$	(1.53	)

5

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

3.    Earnings per Share

The following reconciles the numerators and denominators used in the computations of basic and diluted earnings per common share:

				(In thousands except per share amounts)
				Three Months Ended								Nine Months Ended
				September 28, 2003				September 29, 2002				September 28, 2003				September 29, 2002
Weighted average number of shares outstanding					42,730				42,650				42,730				42,650
Loss before cumulative effect of change in accounting principle				$	(9,570	)		$	(11,390	)		$	(18,460	)		$	(20,320	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				—				(36,630	)
Net loss					(9,570	)			(11,390	)			(18,460	)			(56,950	)
Less: Preferred stock dividends					2,340				3,570				6,840				6,980
Loss used for basic and diluted earnings per share computation				$	(11,910	)		$	(14,960	)		$	(25,300	)		$	(63,930	)
Basic earnings (loss) per share:
Before cumulative effect of change in accounting principle less preferred stock				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(0.64	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				—				(0.86	)
Net loss attributable to common stock				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(1.50	)
Total shares used for basic earnings per share computation					42,730				42,650				42,730				42,650
Contingently issuable shares					—				—				—				—
Total shares used for diluted earnings per share computation					42,730				42,650				42,730				42,650
Diluted earnings (loss) per share:
Before cumulative effect of change in accounting principle less preferred stock				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(0.64	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				—				(0.86	)
Net loss attributable to common stock				$	(0.28	)		$	(0.35	)		$	(0.59	)		$	(1.50	)

Diluted earnings per share reflect the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. Excluded from the calculation of diluted earnings per share are stock options representing 2,470,000 and 2,490,000 of common shares as they are anti-dilutive at September 28, 2003 and September 29, 2002, respectively.

Contingently issuable shares, representing approximately 890,000 and 1,730,000 restricted common shares, have an anti-dilutive effect on earnings per share for the three and nine months ended September 28, 2003 and September 29, 2002, respectively.

6

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

4.    Joint Venture

On December 8, 2002, the Company announced a Joint Venture Formation Agreement ("Agreement") with DaimlerChrysler Corporation ("DaimlerChrysler") to operate DaimlerChrysler's New Castle (Indiana) machining and forge facility. On January 2, 2003, the Company closed on this joint venture, known as NC-M Chassis Systems, LLC. In connection with the closing, DaimlerChrysler contributed substantially all of the assets of the business conducted at this facility in exchange for 100% of the common and preferred interests in the joint venture. In addition, the joint venture assumed certain liabilities of the business from DaimlerChrysler. Immediately following the contribution, the Company purchased 40% of the common interests in the joint venture from DaimlerChrysler for $20 million in cash. This investment is accounted for under the equity method of accounting, due to the Company's investment representing greater than 20% but less than 50% of the interest in the joint venture. However, with respect to the Agreement, the Company does not recognize losses in the joint venture to the extent that DaimlerChrysler provides funding for the joint venture's operations and capital expenditures.

Under the terms of the Agreement, the Company has an option to purchase DaimlerChrysler's common and preferred interests in the joint venture for $118.8 million in cash, approximately $31.7 million in principal amount of a new issue of 10-year 10% senior subordinated notes of Metaldyne and approximately $64.5 million in liquidation preference of a new series of preferred stock of Metaldyne. The Company's call option is available to be exercised once a satisfactory collective bargaining agreement regarding the new Metaldyne employees is ratified and a satisfactory collective bargaining agreement is reached with the DaimlerChrysler employees that will be leased to Metaldyne after the final stock purchase date. If Metaldyne does not exercise its call option within 20 business days of DaimlerChrysler's ratification of a satisfactory collective bargaining agreement or the Company fails to close within 120 days of the exercise because it cannot finance the acquisition, DaimlerChrysler has a call option to purchase the Company's initial investment for $1.00. If a new satisfactory collective bargaining agreement is not ratified by January 31, 2004, the Company has a put option on its equity in the joint venture at $20 million and DaimlerChrysler has a call option on the Company's equity in the joint venture at $20 million. In addition, the Company's current credit agreement requires that the Company exercise its purchase option by January 14, 2004, and that certain credit statistics are met. The Company is currently planning to exercise its purchase option prior to that date.

5.    Acquisition

On May 30, 2003, the Company acquired a facility in Greensboro, North Carolina, from Dana Corporation ("Dana") for approximately $7.7 million at closing and agreed to pay an additional $1.4 million in cash over a period of time ending on December 31, 2004. The Company may also be obligated to pay up to an additional $1.4 million in cash on December 31, 2004 depending upon the extent of new business awards at the facility. The Greensboro facility became part of the Driveline Group's Transmission and Program Management division. The Greensboro operation, which employs approximately 150 people, machines cast iron and aluminum castings, including various steering knuckles and aluminum carriers for light truck applications.

As part of the agreement with Dana, the Company agreed to obtain a third party buyer of the Greensboro facility, and agreed to sign a lease agreement with this party. If the Company failed to obtain a third party buyer for this property within 60 days of the acquisition, it agreed to pay Dana $10 million to purchase the facility. To secure this arrangement, the Company gave Dana a letter of credit for $10 million. On July 14, 2003, the Company subsequently entered into a long-term lease agreement with a third party, thereby releasing the Company from the $10 million letter of credit.

In addition, the Company signed a seven-year supply agreement with Dana covering all existing business at Greensboro, including right of last refusal on successor programs, as well as a commitment to award $20 million of new forging business to the Company. Dana has also issued purchase orders, to be satisfied at other of our facilities, for incremental other tube, gear and carrier business for a number of platforms.

7

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

6.    Goodwill and Other Intangible Assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" and ceased amortizing goodwill. At September 28, 2003, the goodwill balance was approximately $553 million. For purposes of testing this goodwill for potential impairment, fair values were determined based upon the discounted cash flows of the reporting units using a 9.5% discount rate. The initial assessment for the Automotive Group indicated that the fair value of the reporting units within the Automotive Group exceeded their corresponding carrying value. This analysis was completed again for the year ended December 29, 2002, which indicated that the fair value of these units continued to exceed their carrying values.

The initial assessment for the Company's former TriMas Group indicated the carrying value of these units exceeded their fair value. A non-cash, after tax charge of $36.6 million was taken as of January 1, 2002, related to the industrial fasteners business of TriMas. Sales, operating profits and cash flows for this TriMas owned business were lower than expected beginning in the first quarter of 2001, due to the overall economic downturn and cyclical declines in certain markets for industrial fastener products. Based on that trend, the earnings and cash flow forecasts for the next five years indicated the goodwill impairment loss. Consistent with the requirements of SFAS No. 142, the Company recognized this impairment charge as the cumulative effect of change in accounting principle as of January 1, 2002.

Acquired Intangible Assets

The change in the gross carrying amount of acquired intangible assets is primarily attributable to the exchange impact from foreign currency.

				(In thousands, except weighted average life)
				As of September 28, 2003												As of December 29, 2002
				Gross Carrying Amount				Accumulated Amortization				Weighted Average Life				Gross Carrying Amount				Accumulated Amortization				Weighted Average Life
Amortized Intangible Assets:
Customer Contracts				$	93,200			$	(27,670	)		8.2 years				$	91,000			$	(20,920	)		8.2 years
Technology and Other					163,160				(31,470	)		14.9 years					160,820				(23,790	)		14.9 years
Total				$	256,360			$	(59,140	)		13.6 years				$	251,820			$	(44,710	)		13.6 years
Aggregate Amortization Expense (Included in Cost of Sales):
For the nine months ended September 28, 2003								$	16,200
Estimated Amortization Expense:
For the year ending December 28, 2003									21,460
For the year ending December 31, 2004									21,460
For the year ending December 31, 2005									21,060
For the year ending December 31, 2006									21,060

8

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

Goodwill

The changes in the carrying amount of goodwill for the nine months ended September 28, 2003 are as follows:

				Chassis				Driveline				Engine				Total
Balance as of December 29, 2002				$	66,590			$	361,470			$	124,040			$	552,100
Disposition of Fittings					(5,210	)			—				—				(5,210	)
Impact from foreign currency					—				3,610				2,030				5,640
Balance as of September 28, 2003				$	61,380			$	365,080			$	126,070			$	552,530

7.    Disposition of Business

On June 6, 2002, the Company sold TriMas Corporation ("TriMas") common stock to Heartland Industrial Partners, L.P. ("Heartland") and other investors amounting to approximately 66% of the fully diluted common equity of TriMas. The Company retained approximately 34% of the fully diluted common equity of TriMas in the form of common stock and a presently exercisable warrant to purchase shares of TriMas common stock at a nominal exercise price. Pursuant to the terms of a stock purchase agreement, Heartland and the other investors invested approximately $265 million in cash in TriMas to acquire the 66% interest. In connection with the investment, TriMas entered into a senior credit facility and a receivables facility and issued senior subordinated notes due 2012. TriMas used borrowings under the senior credit facility and proceeds from the issuance of the notes to repay borrowings made by its subsidiaries under the Company's credit agreement, to repay certain debt that was owed to the Company and to repurchase TriMas originated receivables balances under the Company's receivables facility. In addition, prior to the closing, TriMas declared and paid a cash dividend to the Company equal to the difference between $840 million and the aggregate amount of such debt repayment and receivables repurchase. Consequently, as a result of the investment and the other transactions, the Company (1) received $840 million in the form of cash, debt reduction and reduced receivables facility balances and (2) received or retained common stock and a warrant in TriMas representing the Company's 34% retained interest.

As Heartland is the Company's controlling shareholder, this transaction was accounted for as a reorganization of entities under common control and accordingly no gain or loss has been recognized. Since the date of disposition, the Company has accounted for its retained interest in TriMas under the equity method of accounting.

On April 2, 2003, TriMas exercised its right to repurchase 1 million shares of its common stock from the Company at $20 per share, the same price as it was valued on June 6, 2002. As a result of this sale, and as a result of acquisitions performed by TriMas in 2003, Metaldyne's ownership percentage in TriMas decreased to approximately 28% as of September 28, 2003.

On May 9, 2003, the Company sold its Chassis Group's Fittings division to TriMas for $22.6 million plus the assumption of an operating lease. This transaction was accounted for as a sale of entities under common control. Therefore, the proceeds in excess of the book value of $6.3 million were recorded as additional paid-in capital in the Company's consolidated balance sheet. The Fittings division, which is a leading manufacturer of specialized fittings and cold-headed parts used in automotive and industrial applications, became part of the TriMas Fastening Systems Group.

8.    Restructuring Actions

In 2001, the Company began to implement plans to integrate the three legacy companies into the Company's new vision and align the business units under the Company's new operating structure and leadership team in an effort to reformulate a cost structure more competitive in the marketplace. To facilitate these initiatives, the Company terminated 292 employees and closed unprofitable businesses and

9

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

plants. The majority of these actions were completed in 2001 and 2002, but some are ongoing as of September 28, 2003. All employees have been terminated under this integration action. The amounts reflected below represent total estimated cash payments, of which $3.2 million and $1.9 million are recorded in "other long-term liabilities" in the Company's consolidated balance sheet at September 28, 2003 and December 29, 2002, respectively. The remaining $4.3 million and $9.8 million are recorded in "accrued liabilities" in the Company's consolidated balance sheet at September 28, 2003 and December 29, 2002, respectively.

In June 2002, the Company announced the reorganization of its Engine Group's European operations, to streamline the engineering, manufacturing and reporting structure of its European operations. This restructuring included the closure of a manufacturing facility in Halifax, England and termination of approximately 25 employees. In addition, the Company closed a small manufacturing location in Memphis, Tennessee and restructured management within its North American engine operations, resulting in the termination of 12 employees. In the first nine months of 2003, the Company recorded additional restructuring charges relating to the termination of an additional 75 employees at certain facilities and the completion of the European operations' reorganization.

The following table provides a rollforward of the restructuring accrual related to the above restructuring actions as of September 28, 2003.

				Acquisition Related								(In thousands) 2002 Additional Severance and Other Exit Costs				2003 Additional Severance and Other Exit Costs				Total
				Severance Costs				Exit and Integration Costs
Balance at December 29, 2002				$	9,880			$	540			$	2,380			$	—			$	12,800
Cash payments					(6,690	)			(330	)			(1,860	)			(3,490	)			(12,370	)
Charges to expense					—				—				—				7,080				7,080
Balance at September 28, 2003				$	3,190			$	210			$	520			$	3,590			$	7,510

9.    Accounts Receivable Securitization

The Company has entered into an arrangement to sell, on an ongoing basis, the trade accounts receivable of substantially all domestic business operations to MTSPC, Inc. ("MTSPC"), a wholly owned subsidiary of the Company. MTSPC from time to time may sell an undivided fractional ownership interest in the pool of receivables up to approximately $225 million to a third party multi-seller receivables funding company. The net proceeds of sale are less than the face amount of accounts receivable sold by an amount that approximates the purchaser's financing costs, which amounted to a total of $2.4 million and $3.4 million for the nine months ended September 28, 2003 and September 29, 2002, respectively, and is included in "other expense, net" in the Company's consolidated statement of operations. At September 28, 2003, the Company's funding under the facility was zero with $76 million available but not utilized. The discount rate at September 28, 2003 was 2.23% compared to 2.48% at December 29, 2002. The usage fee under the facility is 1.5%. In addition, the Company is required to pay a fee of 0.5% on the unused portion of the facility. This facility expires in November 2005.

10

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

10.    Inventories

Inventories by component are as follows:

				(In thousands)
				September 28, 2003				December 29, 2002
Finished goods				$	24,180			$	25,720
Work in process					30,370				26,230
Raw materials					26,120				24,870
				$	80,670			$	76,820

11.    Derivative Financial Instruments

The Company manages its exposure to changes in interest rates through the use of interest rate protection agreements. These interest rate derivatives are designated as cash flow hedges. The effective portion of each derivative's gain or loss is initially reported as a component of other comprehensive income (loss) and subsequently reclassified into earnings when the forecasted transaction affects earnings. The Company does not use derivatives for speculative purposes.

In February 2001, the Company entered into interest rate protection agreements with various financial institutions to hedge a portion of its interest rate risk related to the term loan borrowings under its credit facility. These agreements include two interest rate collars with a term of three years, a total notional amount of $200 million, and a three-month LIBOR interest rate cap and floor of 7% and approximately 4.5%, respectively. The agreements also include four interest rate caps at a three-month LIBOR interest rate of 7% with a total notional amount of $314 million. The two interest rate collars and two of the interest rate caps totaling $200 million were redesignated to the Company's new term note in June 2002. The remaining two interest rate caps totaling $114 million no longer qualify for hedge accounting. Therefore, any unrealized gain or loss is recorded as other income or expense in the consolidated statement of operations beginning June 20, 2002.

Under these agreements, the Company recognized additional interest expense of $4.9 million during the nine months ended September 28, 2003. The Company expects to recognize a portion of the $0.6 million currently included in other comprehensive income into earnings as quarterly interest payments are made.

11

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

12.    Comprehensive Income (Loss)

The Company's total comprehensive income (loss) for the period was as follows:

				(In thousands)
				Three Months Ended								Nine Months Ended
				September 28, 2003				September 29, 2002				September 28, 2003				September 29, 2002
Loss before cumulative effect of change in accounting principle				$	(9,570	)		$	(11,390	)		$	(18,460	)		$	(20,320	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				—				(36,630	)
Net loss					(9,570	)			(11,390	)			(18,460	)			(56,950	)
Other comprehensive income (loss):
Impact of TriMas disposition on foreign currency translation					—				—				—				(1,910	)
Foreign currency translation adjustment					520				(3,040	)			24,370				36,620
Interest rate agreements fair value adjustments					980				(1,090	)			1,370				5,760
Total other comprehensive income (loss)					1,500				(4,130	)			25,740				40,470
Total comprehensive income (loss)				$	(8,070	)		$	(15,520	)		$	7,280			$	(16,480	)

13.    Commitments and Contingencies

The Company is subject to claims and litigation in the ordinary course of our business, but does not believe that any such claim or litigation will have a material adverse effect on its financial position or results of operations.

14.    Segment Information

The Company has defined a segment as a component with business activity resulting in revenue and expense that has separate financial information evaluated regularly by the Company's chief operating decision maker and its board of directors in determining resource allocation and assessing performance.

The Company has established Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") as an indicator of our operating performance and as a measure of our cash generating capabilities. The Company defines Adjusted EBITDA as operating profit plus depreciation and amortization plus legacy stock award expense (contractual obligation from November 2000 acquisition, which will runoff completely by 2003).

In the second quarter of 2002, the Company modified its organizational structure. As a result, the Company is now comprised of three reportable segments: Chassis, Driveline and Engine. Accordingly, the Company has restated sales for all prior periods to reflect this change. Adjusted EBITDA is presented using the Company's modified segment structure beginning in 2002. In addition, in 2003 the Company moved one of its European operations that had historically been part of the Chassis segment to the Engine segment, and moved one of its domestic operations that had historically been part of the Driveline segment to the Engine segment. Both periods have been adjusted to reflect these changes.

CHASSIS — Manufactures components, modules and systems used in a variety of engineered chassis applications, including wheel-ends, axle shaft, knuckles and mini-corner assemblies. This segment utilizes a variety of processes including hot, warm and cold forging, powder metal forging and machinery and assembly.

12

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

DRIVELINE — Manufactures components, modules and systems, including precision shafts, hydraulic controls, hot and cold forgings and integrated program management used in a broad range of transmission applications. These applications include transmission and transfer case shafts, transmission valve bodies, cold extrusion and Hatebur hot forgings.

ENGINE — Manufactures a broad range of engine components, modules and systems, including sintered metal, powder metal, forged and tubular fabricated products used for a variety of applications. These applications include balance shaft modules and front cover assemblies.

As discussed in Note 7, the Company completed a divestiture of a portion of its TriMas Group on June 6, 2002. The TriMas Group is presented at the group level, rather than by segment, for all periods presented.

Segment activity for the three and nine months ended September 28, 2003 and September 29, 2002 is as follows:

				(In thousands)
				Three Months Ended								Nine Months Ended
				September 28, 2003				September 29, 2002				September 28, 2003				September 29, 2002
Sales
Automotive Group
Chassis				$	24,850			$	32,600			$	87,900			$	111,490
Driveline					186,710				197,260				590,470				618,520
Engine					134,720				122,290				439,520				383,890
Automotive Group					346,280				352,150				1,117,890				1,113,900
TriMas Group					—				—				—				328,580
Total sales				$	346,280			$	352,150			$	1,117,890			$	1,442,480
Adjusted EBITDA
Automotive Group
Chassis				$	1,710			$	3,090			$	5,830			$	10,970
Driveline					18,020				26,630				59,860				78,290
Engine					17,920				15,790				65,960				53,890
Automotive Operating					37,650				45,510				131,650				143,150
Automotive/centralized resources ("Corporate")					(5,740	)			(6,140	)			(14,650	)			(15,140	)
Automotive Group					31,910				39,370				117,000				128,010
TriMas Group					—				—				—				62,410
Total Adjusted EBITDA					31,910				39,370				117,000				190,420
Depreciation & amortization					(26,080	)			(24,840	)			(78,790	)			(88,380	)
Legacy stock award expense					(950	)			(1,050	)			(2,430	)			(4,210	)
Operating profit				$	4,880			$	13,480			$	35,780			$	97,830

15.    New Accounting Pronouncements

On December 30, 2002, the Company adopted SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." With the rescission of SFAS No. 4 and 64, only gains and losses from extinguishments of debt that meet the criteria of APB Opinion No. 30 are classified as extraordinary items. This statement also rescinds SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers." This statement amends SFAS No. 13, "Accounting

13

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

for Leases," to eliminate the inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings or describe their applicability under changed conditions. As a result of the Company's adoption of SFAS No. 145, $68.9 million ($43.4 million, net of taxes of $25.5 million) extraordinary loss on early extinguishment of debt recorded for the nine months ended September 29, 2002 has been reclassified as "loss on repurchase of debentures and early retirement of term loans" in other expense, net.

On December 30, 2002, the Company adopted SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of the commitment to an exit or disposal plan. Accordingly, all costs associated with exit or disposal activities will be recognized when they are incurred effective with the Company's 2003 fiscal year. This Statement did not have a material effect on the Company's financial condition or results of operations.

On December 30, 2002, the Company also adopted Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 45, "Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." FIN No. 45 clarifies disclosures that are required to be made for certain guarantees and establishes a requirement to record a liability at fair value for certain guarantees at the time of the guarantee's issuance. FIN No. 45 did not have any impact on the Company's financial condition, results of operations or required disclosures.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest Entities, an Interpretation of ARB 51." FIN No. 46 requires that the primary beneficiary in a variable interest entity consolidate the entity even if the primary beneficiary does not have a majority voting interest. The consolidation requirements of this Interpretation are required to be implemented for any variable interest entity created on or after January 31, 2003. In addition, FIN No. 46 requires disclosure of information regarding guarantees or exposures to loss relating to any variable interest entity existing prior to January 31, 2003 in financial statements issued after January 31, 2003. The Company completed its review of certain potential variable interest entities, which are lessors under some of its operating lease agreements, as well as the accounts receivable securitization facility, to determine the impact of FIN No. 46. The Company has determined that there will be no impact on the financial position or results of operations due to the adoption of this Interpretation.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." This Statement amends Statement 133 for certain decisions made as part of the Derivatives Implementation Group process that effectively required amendments to Statement 133, in connection with other FASB projects dealing with financial instruments and in connection with implementation issues raised in relation to the application of the definition of a derivative. This Statement is effective for contracts entered into or modified after June 30, 2003 (with exceptions) and for hedging relationships designated after June 30, 2003. SFAS No. 149 did not have any impact on the Company's financial condition, results of operations or required disclosures.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities, for which it is effective for the first fiscal period beginning after December 15, 2003. The Company is currently reviewing the provisions of this Statement. Due to the Company being a nonpublic entity as defined in SFAS No. 150, it will adopt this Statement effective with the quarter ending March 28, 2004.

14

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

16.    Subsequent Events

On October 20, 2003, the Company issued $150 million of 10% senior notes due 2013 in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended. The Company will use the net proceeds from this offering to redeem the balance of the $98.5 million aggregate principal amount of its outstanding 4.5% subordinated debentures due in December 2003, and has repaid approximately $46.6 million of term loan debt under its credit facility.

On October 1, 2003, the Company entered into a sale-leaseback transaction for machinery and equipment with a third-party lessor. The Company received $8.5 million cash as part of this transaction.

17.    Condensed Consolidating Financial Statements of Guarantors of Senior Subordinated Notes

The following condensed consolidating financial information presents:

(1) Condensed consolidating financial statements as of September 28, 2003 and December 29, 2002, and for the three and nine months ended September 28, 2003 and September 29, 2002 of (a) Metaldyne Corporation, the parent and issuer, (b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries and (d) the Company on a consolidated basis, and

(2) Elimination entries necessary to consolidate Metaldyne Corporation, the parent, with guarantor and non-guarantor subsidiaries.

The condensed consolidating financial statements are presented on the equity method. Under this method, the investments in subsidiaries are recorded at cost and adjusted for the Company's share of the subsidiaries' cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

All investments in non-domestic subsidiaries are held directly at Metaldyne Company LLC, a wholly-owned subsidiary of Metaldyne Corporation and the guarantor subsidiaries. Equity in non-domestic subsidiary investees is included in the guarantor column of the accompanying consolidating financial information.

15

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Guarantor/Non-Guarantor
Condensed Consolidating Balance Sheets September 28, 2003

(In thousands)

				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Assets
Current assets:
Cash and cash equivalents				$	—			$	—			$	—			$	—			$	—
Total receivables, net					—				25,580				163,530				—				189,110
Inventories					—				52,910				27,760				—				80,670
Deferred and refundable income taxes					—				620				970				—				1,590
Prepaid expenses and other assets					—				31,310				7,440				—				38,750
Total current assets					—				110,420				199,700				—				310,120
Equity investments in affiliates					144,580				—				—				—				144,580
Property and equipment, net					—				497,430				219,830				—				717,260
Excess of cost over net assets of acquired companies					—				423,630				128,900				—				552,530
Investment in subsidiaries					525,970				232,410				—				(758,380	)			—
Intangible and other assets					—				248,160				20,210				—				268,370
Total assets				$	670,550			$	1,512,050			$	568,640			$	(758,380	)		$	1,992,860
Liabilities And Shareholders' Equity
Current liabilities:
Accounts payable				$	—			$	128,130			$	39,740			$	—			$	167,870
Accrued liabilities					—				112,530				18,780				—				131,310
Current maturities, long-term debt					—				4,680				2,460				—				7,140
Total current liabilities					—				245,340				60,980				—				306,320
Long-term debt					250,000				504,600				10,840				—				765,440
Deferred income taxes					—				95,320				22,650				—				117,970
Long-term liabilities					—				131,450				1,130				—				132,580
Intercompany accounts, net					(250,000	)			9,370				240,630				—				—
Total liabilities					—				986,080				336,230				—				1,322,310
Total redeemable stock					88,340				—				—				—				88,340
Shareholders' equity:
Preferred stock					—				—				—				—				—
Common stock					42,730				—				—				—				42,730
Paid-in capital					686,130				—				—				—				686,130
Accumulated deficit					(172,400	)			—				—				—				(172,400	)
Accumulated other comprehensive income					25,750				—				—				—				25,750
Investment by Parent/Guarantor					—				525,970				232,410				(758,380	)			—
Total shareholders' equity					582,210				525,970				232,410				(758,380	)			582,210
Total liabilities, redeemable stock and shareholders' equity				$	670,550			$	1,512,050			$	568,640			$	(758,380	)		$	1,992,860

16

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Guarantor/Non-Guarantor
Condensed Consolidating Balance Sheets December 29, 2002

(In thousands)

				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Assets
Current assets:
Cash and cash equivalents				$	—			$	14,610			$	4,520			$	—			$	19,130
Total receivables, net					—				33,610				153,260				—				186,870
Inventories					—				55,700				21,120				—				76,820
Deferred and refundable income taxes					—				22,620				930				—				23,550
Prepaid expenses and other assets					—				23,620				5,520				—				29,140
Total current assets					—				150,160				185,350				—				335,510
Equity investments in affiliates					147,710				—				—				—				147,710
Property and equipment, net					—				496,670				200,840				—				697,510
Excess of cost over net assets of acquired companies					—				355,560				196,540				—				552,100
Investment in subsidiaries					517,900				234,980				—				(752,880	)			—
Intangible and other assets					—				284,320				1,900				—				286,220
Total assets				$	665,610			$	1,521,690			$	584,630			$	(752,880	)		$	2,019,050
Liabilities And Shareholders' Equity
Current liabilities:
Accounts payable				$	—			$	133,920			$	52,520			$	—			$	186,440
Accrued liabilities					—				78,980				29,350				—				108,330
Current maturities, long-term debt					—				95,030				4,870				—				99,900
Total current liabilities					—				307,930				86,740				—				394,670
Long-term debt					250,000				409,190				9,770				—				668,960
Deferred income taxes					—				126,520				19,990				—				146,510
Long-term liabilities					—				137,810				5,490				—				143,300
Intercompany accounts, net					(250,000	)			22,340				227,660				—				—
Total liabilities					—				1,003,790				349,650				—				1,353,440
Total redeemable stock					85,180				—				—				—				85,180
Shareholders' equity:
Preferred stock					—				—				—				—				—
Common stock					42,650				—				—				—				42,650
Paid-in capital					684,870				—				—				—				684,870
Accumulated deficit					(147,100	)			—				—				—				(147,100	)
Accumulated other comprehensive income					10				—				—				—				10
Investment by Parent/Guarantor					—				517,900				234,980				(752,880	)			—
Total shareholders' equity					580,430				517,900				234,980				(752,880	)			580,430
Total liabilities, redeemable stock and shareholders' equity				$	665,610			$	1,521,690			$	584,630			$	(752,880	)		$	2,019,050

17

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Guarantor/Non-Guarantor
Condensed Consolidating Statement Of Operations
Three Months Ended September 28, 2003

(In thousands)

				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Net sales				$	—			$	264,520			$	81,760			$	—			$	346,280
Cost of sales					—				(244,110	)			(67,050	)			—				(311,160	)
Gross profit					—				20,410				14,710				—				35,120
Selling, general and administrative expenses					—				(19,230	)			(6,840	)			—				(26,070	)
Restructuring charges					—				(2,990	)			(230	)			—				(3,220	)
Legacy restricted stock award expense					—				(840	)			(110	)			—				(950	)
Operating profit					—				(2,650	)			7,530				—				4,880
Other income (expense), net:
Interest expense					—				(16,130	)			(2,560	)			—				(18,690	)
Equity earnings (loss) from affiliates, net					1,130				—				—				—				1,130
Other, net					—				(2,600	)			1,350				—				(1,250	)
Other expense, net					1,130				(18,730	)			(1,210	)			—				(18,810	)
Income (loss) before income taxes					1,130				(21,380	)			6,320				—				(13,930	)
Income tax expense (benefit)					—				(460	)			(3,900	)			—				(4,360	)
Equity in net income of subsidiaries					(10,700	)			10,220				—				480				—
Net income (loss)				$	(9,570	)		$	(10,700	)		$	10,220			$	480			$	(9,570	)
Preferred stock dividends					2,340				—				—				—				2,340
Earnings (loss) attributable to common stock				$	(11,910	)		$	(10,700	)		$	10,220			$	480			$	(11,910	)

18

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Guarantor/Non-Guarantor
Condensed Consolidating Statement Of Operations
Three Months Ended September 29, 2002

(In thousands)

				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Net sales				$	—			$	276,260			$	75,940			$	(50	)		$	352,150
Cost of sales					—				(241,810	)			(62,150	)			50				(303,910	)
Gross profit					—				34,450				13,790				—				48,240
Selling, general and administrative expenses					—				(27,230	)			(5,360	)			—				(32,590	)
Restructuring charges					—				(1,120	)			—				—				(1,120	)
Legacy restricted stock award expense					—				(1,050	)			—				—				(1,050	)
Operating profit					—				5,050				8,430				—				13,480
Other income (expense), net:
Interest expense					—				(17,610	)			(170	)			—				(17,780	)
Loss on repurchase of debentures and early retirement of term loans					—				(6,860	)			—				—				(6,860	)
Equity earnings (loss) from affiliates, net					(2,240	)			—				—				—				(2,240	)
Other, net					—				(120	)			(890	)			—				(1,010	)
Other income (expense), net					(2,240	)			(24,590	)			(1,060	)			—				(27,890	)
Income (loss) before income taxes					(2,240	)			(19,540	)			7,370				—				(14,410	)
Income tax expense (benefit)					—				(5,630	)			2,610				—				(3,020	)
Equity in net income of subsidiaries					(9,150	)			4,760				—				4,390				—
Net income (loss)				$	(11,390	)		$	(9,150	)		$	4,760			$	4,390			$	(11,390	)
Preferred stock dividends					3,570				—				—				—				3,570
Earnings (loss) attributable to common stock				$	(14,960	)		$	(9,150	)		$	4,760			$	4,390			$	(14,960	)

19

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Guarantor/Non-Guarantor
Condensed Consolidating Statement Of Operations
Nine Months Ended September 28, 2003

(In thousands)

				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Net sales				$	—			$	860,480			$	257,410			$	—			$	1,117,890
Cost of sales					—				(784,200	)			(206,540	)			—				(990,740	)
Gross profit					—				76,280				50,870				—				127,150
Selling, general and administrative expenses					—				(69,800	)			(12,060	)			—				(81,860	)
Restructuring charges					—				(5,780	)			(1,300	)			—				(7,080	)
Legacy restricted stock award expense					—				(2,020	)			(410	)			—				(2,430	)
Operating profit					—				(1,320	)			37,100				—				35,780
Other income (expense), net:
Interest expense					—				(50,470	)			(3,340	)			—				(53,810	)
Equity earnings (loss) from affiliates, net					(1,580	)			—				—				—				(1,580	)
Other, net					—				(5,310	)			(1,160	)			—				(6,470	)
Other expense, net					(1,580	)			(55,780	)			(4,500	)			—				(61,860	)
Income (loss) before income taxes					(1,580	)			(57,100	)			32,600				—				(26,080	)
Income tax expense (benefit)					—				(12,980	)			5,360				—				(7,620	)
Equity in net income of subsidiaries					(16,880	)			27,240				—				(10,360	)			—
Net income (loss)				$	(18,460	)		$	(16,880	)		$	27,240			$	(10,360	)		$	(18,460	)
Preferred stock dividends					6,840				—				—				—				6,840
Earnings (loss) attributable to common stock				$	(25,300	)		$	(16,880	)		$	27,240			$	(10,360	)		$	(25,300	)

20

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Guarantor/Non-Guarantor
Condensed Consolidating Statement Of Operations
Nine Months Ended September 29, 2002

(In thousands)

				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Net sales				$	—			$	897,020			$	545,890			$	(430	)		$	1,442,480
Cost of sales					—				(789,010	)			(404,900	)			430				(1,193,480	)
Gross profit					—				108,010				140,990				—				249,000
Selling, general and administrative expenses					—				(76,240	)			(69,600	)			—				(145,840	)
Restructuring charges					—				(1,120	)			—				—				(1,120	)
Legacy restricted stock award expense					—				(4,210	)			—				—				(4,210	)
Operating profit					—				26,440				71,390				—				97,830
Other income (expense), net:
Interest expense					—				(73,570	)			(830	)			—				(74,400	)
Loss on repurchase of debentures and early retirement of term loans					—				(68,860	)			—				—				(68,860	)
Loss on interest rate arrangements upon early retirement of term loans					—				(7,550	)			—				—				(7,550	)
Equity earnings (loss) from affiliates, net					90				—				—				—				90
Other, net					—				(6,540	)			(2,150	)			—				(8,690	)
Other income (expense), net					90				(156,520	)			(2,980	)			—				(159,410	)
Income (loss) before income taxes and cumulative effect of a change in accounting principle					90				(130,080	)			68,410				—				(61,580	)
Income tax expense (benefit)					—				(68,370	)			27,110				—				(41,260	)
Income (loss) before cumulative effect of a change in accounting principle					90				(61,710	)			41,300				—				(20,320	)
Cumulative effect of a change in recognition and measurement of goodwill impairment					—				(36,630	)			—				—				(36,630	)
Equity in net income of subsidiaries					(57,040	)			41,300				—				15,740				—
Net income (loss)				$	(56,950	)		$	(57,040	)		$	41,300			$	15,740			$	(56,950	)
Preferred stock dividends					6,980				—				—				—				6,980
Earnings (loss) attributable to common stock				$	(63,930	)		$	(57,040	)		$	41,300			$	15,740			$	(63,930	)

21

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Guarantor/Non-Guarantor
Condensed Consolidating Statement Of Cash Flows
Nine Months Ended September 28, 2003

(In thousands)

				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Cash flows from operating activities:
Net cash provided by (used for) operating activities				$	—			$	54,390			$	(10,390	)		$	—			$	44,000
Cash flows from investing activities:
Capital expenditures					—				(64,450	)			(18,180	)			—				(82,630	)
Proceeds from sale/leaseback of fixed assets					—				8,460				—				—				8,460
Disposition of business					—				—				22,570				—				22,570
Proceeds from sale of TriMas shares					20,000				—				—				—				20,000
Acquisition of business, net					—				(7,650	)			—				—				(7,650	)
Investment in joint venture					—				(20,000	)			—				—				(20,000	)
Net cash provided by (used for) investing activities					20,000				(83,640	)			4,390				—				(59,250	)
Cash flows from financing activities:
Principal payments of term loan facilities					—				(1,000	)			—				—				(1,000	)
Proceeds of revolving credit facility					—				180,000				—				—				180,000
Principal payments of revolving credit facility					—				(180,000	)			—				—				(180,000	)
Proceeds of other debt					—				3,730				2,960				—				6,690
Principal payments of other debt					—				(3,000	)			(4,320	)			—				(7,320	)
Capitalization of debt refinancing fees					—				(2,250	)			—				—				(2,250	)
Change in intercompany accounts					(20,000	)			17,160				2,840				—				—
Net cash provided by (used for) financing activities					(20,000	)			14,640				1,480				—				(3,880	)
Net increase (decrease) in cash					—				(14,610	)			(4,520	)			—				(19,130	)
Cash and cash equivalents, beginning of period					—				14,610				4,520				—				19,130
Cash and cash equivalents, end of period				$	—			$	—			$	—			$	—			$	—

22

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)

Guarantor/Non-Guarantor
Condensed Consolidating Statement Of Cash Flows
Nine Months Ended September 29, 2002

(In thousands)

				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Cash flows from operating activities:
Net cash used for operating activities				$	—			$	106,740			$	(200,660	)		$	—			$	(93,920	)
Cash flows from investing activities:
Capital expenditures					—				(53,240	)			(25,730	)			—				(78,970	)
Proceeds from sale/leaseback of fixed assets					—				33,370				—				—				33,370
Disposition of business					—				—				840,000				—				840,000
Other, net					—				(3,810	)			—				—				(3,810	)
Net cash provided by (used for) investing activities					—				(23,680	)			814,270				—				790,590
Cash flows from financing activities:
Proceeds of term loan facilities					—				400,000				—				—				400,000
Principal payments of term loan facilities					—				(671,850	)			(440,600	)			—				(1,112,450	)
Proceeds of revolving credit facility					—				319,800				—				—				319,800
Principal payments of revolving credit facility					—				(319,800	)			—				—				(319,800	)
Proceeds of senior subordinated notes due 2012					250,000				—				—				—				250,000
Principal payments of convertible subordinated debentures, due 2003 (net of $1.2 million non-cash portion of repurchase)					—				(205,290	)			—				—				(205,290	)
Proceeds of other debt					—				830				290				—				1,120
Principal payments of other debt					—				(3,050	)			(1,490	)			—				(4,540	)
Capitalization of debt refinancing fees					—				(11,590	)			—				—				(11,590	)
Penalties on early extinguishment of debt					—				(6,480	)			—				—				(6,480	)
Change in intercompany accounts					(250,000	)			425,300				(175,300	)			—				—
Net cash provided by (used for) financing activities					—				(72,130	)			(617,100	)			—				(689,230	)
Net increase (decrease) in cash					—				10,930				(3,490	)			—				7,440
Cash and cash equivalents, beginning of period					—				(12,930	)			12,930				—				—
Cash and cash equivalents, end of period				$	—			$	(2,000	)		$	9,440			$	—			$	7,440

23

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

In addition to net income and other financial measures, the Company uses Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") as an indicator of our operating performance and as a measure of our cash generating capabilities. Adjusted EBITDA is the financial performance measure used by the Chief Executive Officer, Chief Financial Officer and management to evaluate the Company's operating performance. The Company defines Adjusted EBITDA as operating profit plus depreciation and amortization plus legacy stock award expense (representing contractual obligations from the November 2000 acquisition, which will runoff completely in 2003).

Adjusted EBITDA does not represent and should not be considered as an alternative to net income, operating income, net cash provided by operating activities or any other measure for determining operating performance or liquidity that is calculated in accordance with generally accepted accounting principles. Further, Adjusted EBITDA, as we calculate it, may not be comparable to calculations of similarly titled measures by other companies.

24

Results of Operations

Quarter Ended September 28, 2003 Versus September 29, 2002

				(In thousands) Three Months Ended
				September 28, 2003				September 29, 2002
Sales
Chassis				$	24,850			$	32,600
Driveline					186,710				197,260
Engine					134,720				122,290
Total Company				$	346,280			$	352,150
Adjusted EBITDA and Operating Profit (1)
Chassis				$	1,710			$	3,090
Driveline					18,020				26,630
Engine					17,920				15,790
Automotive Operating Adjusted EBITDA					37,650				45,510
Automotive/centralized resources ("Corporate")					(5,740	)			(6,140	)
Total Company Adjusted EBITDA					31,910				39,370
Depreciation and amortization					(26,080	)			(24,840	)
Legacy stock award expense					(950	)			(1,050	)
Total Company operating profit				$	4,880			$	13,480
Other Income and Expense and Net Loss
Other expense, net:
Interest expense				$	(18,690	)		$	(17,780	)
Loss on repurchase of debentures and early retirement of term loans					—				(6,860	)
Equity gain (loss) from affiliates, net					1,130				(2,240	)
Other, net					(1,250	)			(1,010	)
Other expense, net					(18,810	)			(27,890	)
Loss before income taxes					(13,930	)			(14,410	)
Income tax benefit					(4,360	)			(3,020	)
Net loss				$	(9,570	)		$	(11,390	)

(1) Adjusted EBITDA is defined as operating profit before depreciation, amortization and legacy restricted stock award expense. Adjusted EBITDA-related information is presented in the manner as defined herein because we believe it is a widely accepted financial indicator of a company's ability to service and/or incur indebtedness. Adjusted EBITDA is the financial performance measure used by the Chief Executive Officer, Chief Financial Officer and management to evaluate the Company's operating performance. Operating profit is the most closely applicable financial measure calculated based on generally accepted accounting principles. However, Adjusted EBITDA-related information should not be considered as an alternative to net income as a measure of operating results or to cash flows as a measure of liquidity in accordance with generally accepted accounting principles. Because Adjusted EBITDA-related information is not calculated identically by all companies, the presentation in this report is not likely to be comparable to those disclosed by other companies.

25

Reconciliation of Operating Profit to Adjusted EBITDA

				Three Months Ended
				September 28, 2003				September 29, 2002
Automotive Group
Chassis
Operating profit				$	500			$	1,660
Depreciation and amortization					1,210				1,430
Adjusted EBITDA					1,710				3,090
Driveline
Operating profit					4,980				14,350
Depreciation and amortization					13,040				12,280
Adjusted EBITDA					18,020				26,630
Engine
Operating profit					8,410				7,270
Depreciation and amortization					9,510				8,520
Engine Adjusted EBITDA					17,920				15,790
Automotive/centralized resources ("Corporate")
Operating loss					(9,010	)			(9,800	)
Depreciation and amortization					2,320				2,610
Legacy stock award expense					950				1,050
Adjusted EBITDA					(5,740	)			(6,140	)
Total Company
Operating profit					4,880				13,480
Depreciation and amortization					26,080				24,840
Legacy stock award expense					950				1,050
Adjusted EBITDA				$	31,910			$	39,370

Our sales for the third quarter of 2003 were $346.3 million, a decrease of approximately $5.9 million or 1.7% versus the comparable period of 2002. The primary drivers of this decrease were an approximate 9% decline in North American production for General Motors, Ford and Chrysler (the "Big 3"), combined with a 3% decline in European vehicle production. Additionally, 2003 sales were negatively impacted by customer pricing concessions and the sale of our Fitting's business in May 2003, which generated $3.8 million of sales in the third quarter of 2002. Offsetting this decrease were new business launches in the Engine segment of approximately $11.1 million, $12.4 million incremental sales associated with the acquisition of the Greensboro facility and a $7.9 million increase related to foreign currency exchange.

Gross profit was $35.1 million, or 10.1% of net sales, for the third quarter of 2003 versus $48.2 million, or 13.7% of net sales, for the comparable period in 2002. The $13.1 million decrease is the net result of the reduced volumes in both North America and Europe, pricing concessions discussed above, approximately $2.0 million of launch costs, $1.3 million in costs associated with the August power outage in the Midwest and Northeast, $1.5 million in incremental lease costs, $2.0 million in steel increases and $1.3 million of incremental depreciation expense.

Selling, general and administrative expenses were $26.1 million, or 7.5% of net sales, for the third quarter of 2003 versus $32.6 million, or 9.3% of net sales, for the comparable period in 2002. The net decrease in selling, general and administrative expenses is primarily related to net cost saving initiatives such as restructuring activities and the movement towards shared/centralized services.

26

Operating profit for the Automotive Group decreased to $4.9 million, or 1.4% of net sales, in the third quarter of 2003 versus $13.5 million, or 3.8% of net sales, in the third quarter of 2002. In addition to the factors discussed above, the primary driver of the net decrease was $2.1 million of incremental restructuring charges related to headcount reduction actions.

Adjusted EBITDA was $31.9 million for the third quarter of 2003 versus $39.4 million for the third quarter of 2002. The decrease results from the reduced volumes, pricing concessions discussed above, approximately $2.0 million of launch costs, $1.3 million in costs associated with the August power outage in the Midwest and Northeast, $1.5 million in incremental lease costs and $2.0 million in steel increases. These factors were partially offset by operational efficiencies and reductions in our selling, general and administrative expenses.

Interest expense was approximately $18.7 million for the third quarter of 2003 versus $17.8 million for the comparable period in 2002. The $0.9 million increase is primarily due to a 1.5% higher interest rate on our bank debt resulting from the amendment completed on our credit facility in July 2003. See "Liquidity and Capital Resources" section below for additional discussion of debt in 2003 compared with 2002.

Equity earnings from affiliates was approximately $1.1 million for the third quarter of 2003 versus a loss of $2.2 million for the comparable period in 2002. Other, net was approximately $1.3 million in the third quarter of 2003 versus $1.0 million in the comparable period of 2002.

The provision for income taxes for the third quarter of 2003 was a benefit of $4.4 million as compared with a benefit of $3.0 million for the same period of 2002. The benefit for both years reflects the impact of foreign income taxed at rates greater than U.S. statutory rates, as well as state income taxes payable, even though the Company incurred a loss for U.S. tax purposes.

Net loss was approximately $9.6 million for the third quarter of 2003 compared with a net loss of approximately $11.4 million for the same period of 2002, or a $1.8 million decrease. This decrease is due to the factors discussed above.

Segment Information

Sales for our Chassis segment decreased 23.8% in the third quarter of 2003 versus the comparable period of 2002, primarily driven by the sale in May 2003 of its Fittings business, which resulted in a $3.8 million decrease in sales period over period. Excluding the effect of the sale of the Fittings business, the Chassis segment's revenue decreased quarter over quarter. The remaining decrease is due to lower volumes in both our heavy truck and brake bracket business driven by lower production from our customers year over year. Operating profit for the Chassis segment declined from $1.7 million in the third quarter of 2002 to $0.5 million for the same period in 2003, while Adjusted EBITDA declined from $3.1 million to $1.7 million for the same period. This decrease is primarily related to the decrease in sales, a $0.2 million of incremental leasing expense and the 2003 sale of the Fittings business.

Our Engine segment revenue increased approximately 10.2% over the prior year due principally to new product launches. Adjusting for the impact of currency fluctuations, the Engine segment's revenues increased by approximately 7.7% over the same period in 2002. Operating profit for the segment increased from $7.3 million in the third quarter of 2002 to $8.4 million for the same period in 2003, while Adjusted EBITDA increased from $15.8 million to $17.9 million for the same period. The increase is primarily attributable to the increase in sales and cost reduction efforts but is offset by customer pricing concessions, increased launch and development costs and approximately $0.6 million of incremental leasing expense.

Our Driveline segment revenue decreased 5.3% versus the comparable period of 2002, or approximately 7.8% after adjusting for currency fluctuations. In addition to the decrease in North American vehicle build for our three largest customers, the loss of certain customer contracts and continued pricing pressure from our core North American customer base contributed to the decline. Offsetting this decrease was the incremental sales associated with the acquisition of the Greensboro facility in May 2003.

The Driveline segment is rapidly working to replace the lost sales and has received contracts beginning in 2003 that are expected to mitigate the effect of the lost business. Operating profit for the segment decreased from $14.4 million in the third quarter of 2002 to $5.0 million in the third quarter of

27

2003, while Adjusted EBITDA decreased from $26.6 million to $18.0 million in the third quarter of 2002 and 2003, respectively. In addition to volume declines, the primary drivers of this decrease relate to material price increases combined with price concessions to customers outweighing the manufacturing cost reductions and efficiencies we were able to achieve during the quarter. Historically, price concessions to customers have been offset by advancements in engineering or manufacturing processes that allow us to reduce costs and selling prices. However, in 2003 the impact of the Section 201 steel tariffs negatively impacted this historical relationship and negatively impacted our 2003 performance. Steel price increases have contributed approximately $2 million of additional costs per quarter versus 2002 costs.

Automotive/centralized resources ("Corporate") operating loss was $9.0 million in the third quarter of 2003 versus $9.8 million for the comparable period in 2002, while Adjusted EBITDA was $(5.7) million and $(6.1) million for the third quarter of 2003 and 2002, respectively. We are continuing to realize the benefits of our shared services initiatives to centralize standard processes and reduce redundant costs throughout our Company (e.g. capability in sales, procurement, IT infrastructure, finance expertise, etc.). The majority of shared services initiatives were completed in the fourth quarter of 2002, and as a result, we have started to see a decrease in selling, general and administrative costs in the Company in 2003.

28

Nine Months Ended September 28, 2003 Versus September 29, 2002

				(In thousands) Nine Months Ended
				September 28, 2003				September 29, 2002
Sales
Automotive Group
Chassis				$	87,900			$	111,490
Driveline					590,470				618,520
Engine					439,520				383,890
Automotive Group					1,117,890				1,113,900
TriMas Group (1)					—				328,580
Total Company				$	1,117,890			$	1,442,480
Adjusted EBITDA and Operating Profit (2)
Automotive Group
Chassis				$	5,830			$	10,970
Driveline					59,860				78,290
Engine					65,960				53,890
Automotive Operating Adjusted EBITDA					131,650				143,150
Automotive/centralized resources ("Corporate")					(14,650	)			(15,140	)
Automotive Group Adjusted EBITDA					117,000				128,010
Depreciation and amortization					(78,790	)			(72,370	)
Legacy stock award expense					(2,430	)			(3,950	)
Automotive Group operating profit					35,780				51,690
TriMas Group Adjusted EBITDA (1)					—				62,410
Depreciation and amortization (1)					—				(16,010	)
Legacy stock award expense (1)					—				(260	)
Total Company operating profit				$	35,780			$	97,830
Total Company Adjusted EBITDA				$	117,000			$	190,420
Other Income and Expense and Net Loss
Other expense, net:
Interest expense				$	(53,810	)		$	(74,400	)
Loss on repurchase of debentures and early retirement of term loans					—				(68,860	)
Loss on interest rate arrangements upon early retirement of term loans					—				(7,550	)
Equity gain (loss) from affiliates, net					(1,580	)			90
Other, net					(6,470	)			(8,690	)
Other expense, net					(61,860	)			(159,410	)
Loss before income taxes					(26,080	)			(61,580	)
Income tax benefit					(7,620	)			(41,260	)
Loss before cumulative effect of change in accounting principle					(18,460	)			(20,320	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				(36,630	)
Net loss				$	(18,460	)		$	(56,950	)

(1) TriMas Group is included in our financial results through June 6, 2002, the date of our divestiture.

(2) Adjusted EBITDA is defined as operating profit before depreciation, amortization and legacy restricted stock award expense. Adjusted EBITDA-related information is presented in the manner as defined herein because we believe it is a widely accepted financial indicator of a company's ability to service and/or incur indebtedness. Adjusted EBITDA is the financial performance measure used by the Chief Executive Officer, Chief Financial Officer and management to evaluate the Company's operating performance. Operating profit is the most closely applicable financial measure calculated based on generally accepted accounting principles. However, Adjusted EBITDA-related information should not be considered as an alternative to net income as a measure of operating results or to cash flows as a measure of liquidity in accordance with generally accepted accounting principles. Because Adjusted EBITDA-related information is not calculated identically by all companies, the presentation in this report is not likely to be comparable to those disclosed by other companies.

29

Reconciliation of Operating Profit to Adjusted EBITDA

				Nine Months Ended
				September 28, 2003				September 29, 2002
Automotive Group
Chassis
Operating profit				$	1,850			$	6,470
Depreciation and amortization					3,980				4,500
Adjusted EBITDA					5,830				10,970
Driveline
Operating profit					21,450				43,170
Depreciation and amortization					38,410				35,120
Adjusted EBITDA					59,860				78,290
Engine
Operating profit					35,700				29,420
Depreciation and amortization					30,260				24,470
Engine Adjusted EBITDA					65,960				53,890
Automotive
Operating profit					59,000				79,060
Depreciation and amortization					72,650				64,090
Adjusted EBITDA					131,650				143,150
Automotive/centralized resources ("Corporate")
Operating loss					(23,220	)			(27,370	)
Depreciation and amortization					6,140				8,280
Legacy stock award expense					2,430				3,950
Adjusted EBITDA					(14,650	)			(15,140	)
Total Automotive Group
Operating profit					35,780				51,690
Depreciation and amortization					78,790				72,370
Legacy stock award expense					2,430				3,950
Adjusted EBITDA					117,000				128,010
TriMas Group
Operating profit					—				46,140
Depreciation and amortization					—				16,010
Legacy stock award expense					—				260
Adjusted EBITDA					—				62,410
Total Company
Operating profit					35,780				97,830
Depreciation and amortization					78,790				88,380
Legacy stock award expense					2,430				4,210
Adjusted EBITDA				$	117,000			$	190,420

Due to the divestiture of our TriMas subsidiary in June 2002, the consolidated results for the first nine months of 2003 and 2002 are not comparable. For purposes of the following discussion, TriMas results are

30

excluded, where applicable and quantifiable, and the performance of our Automotive Group operations is discussed on a comparable basis between periods.

Our Automotive Group sales for the first nine months of 2003 were $1,117.9 million, an increase of approximately $4 million or 0.4% versus the comparable period of 2002. The primary drivers of this increase were new business launches in the Engine segment, incremental sales associated with the acquisition of the Greensboro facility in May 2003 and a $32.3 million benefit related to currency exchange. Offsetting this increase was an approximate 6.3% reduction in North American production for the "Big 3". Additionally, 2003 sales were negatively impacted by customer pricing concessions and the loss of certain customer contracts in our Driveline segment.

Gross profit was $127.2 million in the first nine months of 2003 versus $249 million in the comparable period in 2002. Excluding our former TriMas subsidiary, gross profit was $127.2 million or 11.4% of net sales in the first nine months of 2003 versus an approximate $148.2 million or 13.3% of net sales for the first nine months of 2002. The $21.0 million decrease is the net combination of several offsetting factors, but primarily represents approximately $6 million in increased steel costs, an incremental $4.9 million in depreciation expense and $3.4 million of incremental lease expense for the period.

Selling, general and administrative expenses were $81.9 million for the first nine months of 2003 versus $145.8 million in the comparable period in 2002. Excluding TriMas, selling, general and administrative charges approximated $91.5 million in the first nine months of 2002, or 8.2% of Automotive Group sales, versus an approximate $81.9 million in the first nine months of 2003, or 7.3% of Automotive Group sales. The net decrease in selling, general and administrative expenses is primarily related to net cost saving initiatives such as the Engine segment restructuring and the movement towards shared/centralized services.

Operating profit for the Automotive Group decreased to $35.8 million, or 3.2% of sales, in the first nine months of 2003 versus $51.7 million, or 3.6% of sales, in the first nine months of 2002. In addition to the factors discussed above, operating profit was negatively impacted by $6 million of incremental restructuring efforts.

Adjusted EBITDA for the Automotive Group was $117.0 million in the first nine months of 2003 versus $128.0 million in the comparable period of 2002. The incremental restructuring efforts of $6.0 million, incremental lease expense of $3.4 million and the $6 million in increased steel costs were the primary contributors to the decline. Other factors such as price concessions to customers were more than offset by operational efficiencies and reductions in our selling, general and administrative expenses.

Interest expense was approximately $53.8 million for the first nine months of 2003 versus $74.4 million for the comparable period in 2002. This decrease is primarily due to a reduction in interest resulting from a lower average debt balance and an approximate 0.6% reduction in average LIBOR for the year-to-date period in 2003 as compared to 2002. See "Liquidity and Capital Resources" section below for additional discussion of the reduction in debt levels from fiscal 2002.

Equity from affiliates was approximately a $1.6 million loss for the first nine months of 2003 versus a gain of $0.1 million for the comparable period in 2002. Other, net expense was approximately $6.5 million in the first nine months of 2003 versus $8.7 million in the comparable period of 2002. This is the result of a decrease in debt fee amortization due to our debt refinancing in 2002 and a decrease in accounts receivable securitization financing fees due to decreased usage of our securitization facility in the first nine months of 2003 compared with the same period of 2002.

The provision for income taxes for the first nine months of 2003 was a benefit of $7.6 million as compared with a benefit of $41.3 million for the same period of 2002. The 2002 tax amount includes a tax benefit of $25.5 million for the loss on repurchase of debentures and early retirement of term loans as a result of our debt restructuring efforts in the second quarter of 2002. The provision for both years reflects the impact of foreign income taxed at rates greater than U.S. statutory rates, as well as state income taxes payable, even though the Company incurred a loss for U.S. tax purposes. The 2003 tax benefit is primarily attributable to the U.S. net operating loss ("NOL"). This loss must be carried forward and utilized over the next 20 years. It is anticipated that this NOL will be fully utilized before expiration. All but $4.2

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million of the entire 2002 NOL was carried back to prior years, resulting in a refund of approximately $37.5 million. $20 million of the tax benefit recorded in 2002 related to a change in tax law and should be refunded by the IRS in 2004.

Net loss before cumulative effect of change in accounting principle was approximately $18.5 million for the first nine months of 2003, versus $20.3 million for the same period of 2002. These results are due to the factors discussed above.

A non-cash, after-tax charge of $36.6 million was taken as of January 1, 2002 resulting from our transitional impairment test required to measure the amount of any goodwill impairment of our former TriMas subsidiary, as required by SFAS No. 142, "Goodwill and Other Intangible Assets." Consistent with the requirements of SFAS No. 142, we recognized this impairment charge as the cumulative effect of change in accounting principle as of January 1, 2002.

Segment Information

Sales for our Chassis segment decreased 21.2% in the first nine months of 2003 versus the comparable period of 2002, primarily driven by the closure in June 2002 of one of its manufacturing facilities and sale of the Fittings business in May 2003 which resulted in a $8.7 million and $6.8 million decrease in sales period over period, respectively. Excluding the effect of this closed facility and sale of business, the Chassis segment's revenue decreased $8.1 million period over period primarily due to the production decline of our domestic "Big 3" customers. Operating profit for the Chassis segment declined from $6.5 million in the first nine months of 2002 to $1.9 million for the same period in 2003, while Adjusted EBITDA declined from $11 million to $5.8 million for the same period. This decrease is related to the reduction in volumes, the closure of the Troy, Ohio manufacturing facility and sale of business.

Our Engine segment revenue increased approximately 14.5% over the prior year due principally to new product launches. Adjusting for the impact of currency fluctuations, the Engine segment's revenues increased by approximately 11.2% over the same period in 2002. Operating profit for the segment increased from $29.4 million in the first nine months of 2002 to $35.7 million for the same period in 2003, while Adjusted EBITDA increased from $53.9 million to $66.0 million for the same period. The increase is primarily attributable to the increase in sales and cost reduction efforts in the first nine months of 2003 but is offset by customer pricing concessions, increased launch and development costs, charges related to the completion of its restructuring actions initiated in mid-2002 and approximately $1.6 million of incremental leasing expense.

Our Driveline segment revenue decreased 4.5% versus the comparable period of 2002, or approximately 7.7% after adjusting for currency fluctuations. In addition to the decrease in North American vehicle build for our "Big 3" customers, the loss of certain customer contracts and continued pricing pressure from our core North American customer base contributed to the decline. Offsetting this decrease was the incremental sales of $18.7 million associated with the acquisition of the Greensboro facility in May 2003.

The Driveline segment is rapidly working to replace the lost sales and has received contracts beginning in 2003 that are expected to mitigate the effect of the lost business. Operating profit for the segment decreased from $43.2 million in the first nine months of 2002 to $21.5 million in the first nine months of 2003, while Adjusted EBITDA decreased from $78.3 million to $59.9 million in the first nine months of 2002 and 2003, respectively. In addition to volume declines, the primary drivers of this decrease relate to material price increases combined with price concessions to customers outweighing the manufacturing cost reductions and efficiencies we were able to achieve during the first nine months of 2003. Historically, price concessions to customers have been offset by advancements in engineering or manufacturing processes that allow us to reduce costs and selling prices. However, in 2003 the impact of the Section 201 steel tariffs (approximately $6 million cost increase through September in 2003 versus 2002) and increases in our cost to procure aluminum negatively impacted this historical relationship and negatively impacted our 2003 performance. Further impacting our Driveline segment were several operational issues experienced during the quarter ended March 30, 2003, including difficulty in launching two new products, unexpected maintenance issues in one of its high volume manufacturing facilities and the consolidation of two of its manufacturing facilities. These operational issues were primarily corrected in the second quarter.

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Automotive/centralized resources ("Corporate") operating loss was $23.2 million in the first nine months of 2003 versus $27.4 million for the comparable period in 2002, while Adjusted EBITDA was $(14.7) million and $(15.1) million for the first nine months of 2003 and 2002, respectively. However, we are beginning to realize the benefits of our shared services initiatives to centralize standard processes and reduce redundant costs throughout our Company (e.g. capability in sales, procurement, IT infrastructure, finance expertise, etc.). The majority of shared services initiatives were completed in the fourth quarter of 2002, and as a result, we have started to see a decrease in selling, general and administrative costs in the Automotive segments in 2003.

Liquidity and Capital Resources

Liquidity.    We had $92.5 million of available funds as of September 28, 2003. Our funding under the accounts receivable securitization facility and revolving credit facility was zero.

Principal Sources of Liquidity.    Our principal sources of liquidity are cash flow from operations, our revolving credit facility and our accounts receivable securitization facility. We have significant unutilized capacity under our revolving credit facility and accounts receivable facility that may be utilized for acquisitions, investments or capital expenditure needs. We believe that our liquidity and capital resources including anticipated cash flow from operations will be sufficient to meet debt service, capital expenditure and other short-term and long-term obligations and needs, but we are subject to unforeseeable events and the risk that we are not successful in implementing our business strategies.

Debt, Capitalization and Available Financing Sources.    In 2002, we entered into two arrangements to refinance our long-term debt. In the first arrangement, we issued $250 million aggregate principal amount of 11% senior subordinated notes due 2012. In connection with the 11% senior subordinated notes offering described above, we also amended and restated our credit facility to replace the original tranche A, B and C term loans with a new $400 million tranche D term loan payable in semi-annual installments of $0.5 million with the remaining outstanding balance due December 31, 2009. In addition to the term loan, the credit facility also includes a revolving credit facility with a principal commitment of $200 million. The revolving credit facility matures on May 28, 2007. The obligations under the credit facility are collateralized by substantially all of our assets and are guaranteed by substantially all of our domestic subsidiaries.

On October 20, 2003, we issued $150 million of 10% senior notes due 2013 in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended. We plan to use the net proceeds from this offering to redeem the balance of the $98.5 million aggregate principal amount of the outstanding 4.5% subordinated debentures due in December 2003, and have repaid $46.6 million of term loan debt under our credit facility.

Our debt as of September 28, 2003 and December 29, 2002 is summarized below.

				(In millions)
				September 28, 2003				December 29, 2002
Senior credit facilities:
Tranche D term loan facility				$	399			$	399
Revolving credit facility					—				—
Total senior credit facility				$	399			$	399
11% senior subordinated notes, due 2012					250				250
4.5% subordinated debentures, due 2003 (face value $98.5 million)					97				—
Other debt					20				20
Total long-term debt					766				669
4.5% subordinated debentures, due 2003 (face value $98.5 million)					—				91
Other current maturities					7				9
Total debt				$	773			$	769

Our working capital revolver facility has a blocked availability amount sufficient to meet our 2003 maturity of the $98.5 million face value 4.5% subordinated debentures. After we apply the proceeds of our

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recent bond offering to retire the 4.5% subordinated debentures, the blocked availability will be reduced to zero and the principal commitment on our revolving credit facility will be reduced to $200 million.

At September 28, 2003, we were contingently liable for standby letters of credit totaling $30 million issued on our behalf by financial institutions. These letters of credit are used for a variety of purposes, including meeting various states' requirements in order to self-insure workers' compensation claims, including incurred but not reported claims.

Cash Flows

Operating activities — Operating activities provided $44.0 million of cash for the first nine months of 2003 as compared with a use of cash of $93.9 million in the comparable period of 2002. In 2002, we had a net payback of $138.4 million on the accounts receivable facility. Excluding this payment, operating activities decreased by $0.4 million over the comparable period, primarily due to the June 6, 2002 divestiture of TriMas. Additionally, cash flows for both periods were negatively impacted by the restricted stock award program, of which final payment for this program will be made in the first quarter of 2004.

Investing activities — Investing activities resulted in a use of cash of $59.3 million for the first nine months of 2003 as compared with a source of cash of $790.6 million for the comparable period of 2002. Our 2002 results are impacted by our disposition of TriMas for $840 million. Our 2003 results include the investment of $20 million in NC-M Chassis Systems, LLC joint venture, the acquisition of the Greensboro facility from Dana Corporation of $7.7 million and a reduction in sale-leaseback transactions in the first nine months of 2003 as compared with 2002. These activities were offset by the disposition of our Fittings division for $22.6 million and proceeds from the sale of part of our equity investment in TriMas for $20 million. Proceeds from sale-leaseback transactions were $8.5 million for the first nine months of 2003 as compared with $33.4 million for the comparable period in 2002. Capital expenditures were $82.6 million for the first nine months of 2003 as compared with $79 million for the comparable period of 2002, or an increase of $3.6 million. 2002 capital expenditures include approximately $10 million related to TriMas prior to its disposition.

Financing activities — Financing activities resulted in a use of cash of $3.9 million for the first nine months of 2003 as compared to $689.2 million in the comparable period of 2002. Our 2002 results were impacted by our disposition of TriMas, repayment of term debt, issuance of senior subordinated debt and a $43.4 million (net of taxes of $25.5 million) loss on the repurchase of the debentures and early retirement of the term loans. Our 2003 results reflect a net repayment of debt of $1.6 million for the first nine months of the period.

Interest Rate Hedging Arrangements.    In February 2001, we entered into interest rate protection agreements with various financial institutions to hedge a portion of our interest rate risk related to the term loan borrowings under our credit facility. These agreements include two interest rate collars with a term of three years, a total notional amount of $200 million and a three month LIBOR interest rate cap and floor of 7% and 4.5%, respectively, and four interest rate caps at a three month LIBOR interest rate of 7% with a total notional amount of $314 million. The two interest rate collars and two of the interest rate caps totaling $200 million were redesignated to our new term loan borrowings in June 2002. The remaining two interest rate caps totaling $114 million no longer qualify for hedge accounting. Therefore, the unrealized gain or loss is recorded as other income or expense in the consolidated statement of operations beginning June 20, 2002.

Off-Balance Sheet Arrangements

Our Receivables Facility.    We have entered into an agreement to sell, on an ongoing basis, the trade accounts receivable of certain business operations to our wholly owned bankruptcy-remote, special purposes subsidiary, or MTSPC. MTSPC has sold and, subject to certain conditions, may from time to time sell an undivided fractional ownership interest in the pool of domestic receivables, up to approximately $225 million, to a third party multi-seller receivables funding company, or conduit. Upon sale to the conduit, MTSPC holds a subordinated retained interest in the receivables. Under the terms of the agreement, new receivables are added to the pool as collections reduce previously sold receivables. We service, administer and collect the receivables on behalf of MTSPC and the conduit. The facility is an important source of liquidity to the Company. The receivables facility resulted in net expense of $2.4 million for the first nine months of 2003.

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The facility is subject to customary termination events, including, but not limited to, breach of representations or warranties, the existence of any event that materially adversely affects the collectibility of receivables or performance by a seller and certain events of bankruptcy or insolvency. At September 28, 2003, none of our $225 million receivables facility was utilized, with $76 million available based upon the amount of our outstanding eligible receivables. The proceeds of sale are less than the face amount of accounts receivable sold by an amount that approximates the purchaser's financing costs. The agreement expires in November 2005. If we are unable to renew or replace this facility, it could adversely affect our liquidity and capital resources.

We have entered into various third party non-recourse factoring arrangements on behalf of our foreign subsidiaries.

Sale-Leaseback Arrangements.    We have engaged in a number of sale-leaseback transactions since 2001. In March 2003, we entered into a sale-leaseback transaction with respect to certain manufacturing equipment for proceeds of approximately $8.5 million. All of our sale-leasebacks are accounted for as operating leases and the associated rent expense is included in our financial results on a straight-line basis.

Certain Other Commitments.    We have other cash commitments not relating to debt as well, such as those in respect to leases, preferred stock and restricted stock awards.

In November 2000, a group of investors led by Heartland and CSFB Private Equity acquired control of Metaldyne. Immediately following the November 2000 acquisition, we made restricted stock awards to certain employees of shares of our common stock. Under their terms, 25% of those shares became free of restriction, or vested upon the closing of the November 2000 acquisition and one quarter of the shares were due to vest on each January 14, 2002, 2003, and 2004. There will be no further payments required after January 14, 2004. Holders of restricted stock are entitled to elect cash in lieu of 40% of their restricted stock which vested at closing and 100% of their restricted stock on each of the other dates with the shares valued at $16.90 per share, together with cash accruing at approximately 6% per annum; to the extent that cash is not elected, additional common stock valued at $16.90 per share is issuable in lieu of the 6% accretion. As a result of the elections made for the January 14, 2003 payment and restrictions under our credit facility, we paid approximately $16.3 million in cash to vested holders of restricted stock in January 2003. We are entitled to reimbursement of certain amounts from our former subsidiary TriMas, representing approximately 50% of our obligations related to these restricted stock awards and, accordingly, a receivable from TriMas is included in our consolidated balance sheet at September 28, 2003.

We also have outstanding $71.5 million in aggregate liquidation value of Series A and Series B preferred stock in respect of which we have the option to pay cash dividends, subject to the terms of our debt instruments, at rates of 13% and 11.5%, respectively, per annum initially and to effect a mandatory redemption in December 2012 and June 2013, respectively. For periods that we do not pay cash dividends on the Series A preferred stock, an additional 2% per annum of dividends is accrued. In the event of a change in control or certain qualified equity offerings, we may be required to make an offer to repurchase our outstanding preferred stock. We may not be permitted to do so and may lack the financial resources to satisfy these obligations.

In the November 2000 recapitalization of the Company, our shares were converted into the right to receive $16.90 in cash plus additional cash amounts based upon the net proceeds of the disposition of the stock of Saturn Electronics & Engineering Inc. held by Metaldyne. Although no disposition of the stock of Saturn was made prior to the merger or has been made to date, former holders of our common stock as of the merger will be entitled to amounts based upon the net proceeds, if any, from any future disposition of that stock if and when a disposition is completed. The amount, which will be paid to such former stockholders will equal the proceeds in excess of $18 million and less than or equal to $40 million, any proceeds in excess of $55.7 million and less than or equal to $56.7 million as well as 60% of any such proceeds in excess of $56.7 million. All other amounts of the proceeds will be retained by us. We may seek to monetize our share of this investment in the future.

Contractual Cash Obligations.    Under various agreements, we are obligated to make future cash payments in fixed amounts. These include payments under our long-term debt agreements, rent payments required under lease agreements and various severance obligations related to our recent acquisitions. The

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following table summarizes our fixed cash obligations over various future periods as of September 28, 2003.

				(In millions) Payments Due by Periods
				Total				Less Than One Year				1-3 Years				3-5 Years				After 5 Years
Long-term debt				$	399			$	1			$	2			$	2			$	394
11% Senior subordinated notes					250				—				—				—				250
4.5% Convertible subordinated debentures					98				—				—				—				98
Other debt					18				3				4				3				8
Capital lease obligations					9				4				3				2				—
Operating lease obligations(1)					230				26				58				48				98
Redeemable preferred stock, including accrued dividends					72				—				—				—				72
Redeemable restricted common stock(2)					17				17				—				—				—
Pension contributions (data available through 2004)					23				11				12				—				—
Contractual severance					7				5				2				—				—
Total contractual obligations				$	1,123			$	67			$	81			$	55			$	920

(1) Operating lease expense is deducted to arrive at operating profit.

(2) Redeemable restricted common stock includes TriMas' portion, consisting of approximately 50% of total obligations, which will be reimbursed to the Company.

At September 28, 2003, we were contingently liable for standby letters of credit totaling $30 million issued on our behalf by financial institutions. We are also contingently liable for future product warranty claims. We believe that our product warranty exposure is immaterial; however, it is continuously monitored for potential warranty implications of new and current business.

U.S. Pension Plans

We have replaced our existing combination of defined benefit plans and defined contribution plans for non-union employees with an age-weighted profit-sharing plan and a 401(k) plan. Defined benefit plan benefits will no longer accrue after 2002. This change affected approximately 1,200 employees. The profit-sharing component of the new plan is calculated using allocation rates that are integrated with Social Security and that increase with age. Our 2003 defined benefit pension expense will be approximately $5.6 million and our defined contribution (profit-sharing and 401(k) matching contribution) expense will be approximately $6.8 million.

Critical Accounting Policies

Management has determined the following as critical accounting policies:

Use of Estimates.    The expenses and accrued liabilities or allowances related to certain policies are initially based on our best estimates at the time of original entry in our accounting records. Adjustments are recorded when our actual experience differs from the expected experience underlying the estimates. We make frequent comparisons of actual versus expected experience to mitigate the likelihood of material adjustments.

Goodwill.    In June 2001, the Financial Accounting Standards Board ("FASB") approved Statement of Financial Accounting Standards ("SFAS") No. 142 "Goodwill and Other Intangible Assets" which was effective for us on January 1, 2002. Fair value was determined based upon the discounted cash flows of the reporting units using a 9.5% discount. Assuming an increase in the discount rate to 12%, fair value would continue to exceed the respective carrying value of each segment.

Stock-Based Compensation.    In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of FASB Statement No 123." SFAS No. 148 amends SFAS No. 123, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this

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Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. We adopted SFAS No. 148 effective for the fiscal year ended December 29, 2002.

At September 28, 2003, we have one stock-based employee compensation plan, which provides for the issuance of equity-based incentives in various forms to key employees of the Company. These options have a ten-year option period and vest ratably over a three-year period from date of grant. However, the options' exercisability is limited in the circumstances of a public offering whereby the shares are required to be held and exercised after the elapse of certain time periods. As of September 28, 2003, we had stock options outstanding for 2,470,000 shares at a price of $16.90 per share.

We account for this plan under the recognition and measurement principles of Accounting Principles Board No. 25, "Accounting for Stock Issued to Employees," and related Interpretations and, accordingly, no stock option compensation expense is included in the determination of net income in the consolidated statement of operations. The weighted average fair value on the date of grant of options granted for the nine months ended September 28, 2003 was zero. Had stock option compensation expense been determined pursuant to the methodology of SFAS No. 123, "Accounting for Stock-Based Compensation," the pro forma effects on our basic and diluted earnings per share would have been a reduction of approximately $0.01 and $0.03 for the three and nine months ended September 28, 2003, respectively.

Receivables and Revenue Recognition.    Receivables are presented net of allowances for doubtful accounts. We conduct a significant amount of business with a number of individual customers in the transportation industry. We monitor our exposure for credit losses and maintain adequate allowances for doubtful accounts; we do not believe that significant credit risk exists. In accordance with our accounts receivable securitization, trade accounts receivable of substantially all domestic business operations are available for sale, on an ongoing and as needed financing basis, to MTSPC, Inc., a wholly owned subsidiary. In compliance with Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements," we do not recognize revenue until it is realized or realizable and earned. Revenue generally is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the selling price to the buyer is fixed or determinable; and collectibility is reasonably assured. We are in compliance with SAB No. 101 as of September 28, 2003.

Fixed Assets and Other Intangibles Excluding Goodwill.    Depreciation is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 2.5% to 10%, and machinery and equipment, 6.7% to 33.3%. Amortization expense of other intangibles is approximately $16 million for the period ended September 28, 2003. The weighted average useful life of intangible assets ranges from 8.2 years to 14.9 years as of September 28, 2003. Potential impairment of these assets is evaluated by examining current operating results, business prospects, market trends, potential product obsolescence, competitive activities and other economic factors.

Foreign Currency Translation.    The financial statements of subsidiaries outside of the United States (U.S.) located in non-highly inflationary economies are measured using the currency of the primary economic environment in which they operate as the functional currency, which for the most part represents the local currency. Transaction gains and losses are included in net earnings. When translating into U.S. dollars, income and expense items are translated at average monthly rates of exchange and assets and liabilities are translated at the rates of exchange at the balance sheet date. Translation adjustments resulting from translating the functional currency into U.S. dollars are deferred as a component of accumulated other comprehensive income (loss) in shareholders' equity. Other comprehensive income (loss), net includes a translation gain of $0.5 million and $24.4 million for the three and nine months ended September 28, 2003, respectively. For subsidiaries operating in highly inflationary economies, non-monetary assets are translated into U.S. dollars at historical exchange rates. Translation adjustments for these subsidiaries are included in net earnings.

Pension and Postretirement Benefits Other than Pensions.    Annual net periodic expense and benefit liabilities under our defined benefit plans are determined on an actuarial basis. Assumptions used in the

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actuarial calculations have a significant impact on plan obligations and expense. Each September, we review the actual experience compared to the more significant assumptions used and make adjustments to the assumptions, if warranted. The healthcare trend rates are reviewed with the actuaries based upon the results of their review of claims experience. Discount rates are based upon an expected benefit payments duration analysis and the equivalent average yield rate for high-quality fixed-income investments. Pension benefits are funded through deposits with trustees and the expected long-term rate of return on fund assets is based upon actual historical returns modified for known changes in the market and any expected change in investment policy. Postretirement benefits are not funded and our policy is to pay these benefits as they become due.

Other Loss Reserves.    We have other loss exposures, such as environmental claims, product liability, litigation, recoverability of deferred income tax benefits, and accounts receivable. Establishing loss reserves for these matters requires the use of estimates and judgment in regards to risk exposure and ultimate liability. We estimate losses under the programs using consistent and appropriate methods; however, changes to our assumptions could materially affect our recorded liabilities for loss. Where available, we utilize published credit ratings for our debtors to assist us in determining the amount of required reserves.

New Accounting Pronouncements.    On December 30, 2002, we adopted SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." With the rescission of SFAS No. 4 and 64, only gains and losses from extinguishments of debt that meet the criteria of APB Opinion No. 30 are classified as extraordinary items. This statement also rescinds SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers." This statement amends SFAS No. 13, "Accounting for Leases," to eliminate the inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings or describe their applicability under changed conditions. As a result of our adoption of SFAS No. 145, $68.9 million ($43.4 million, net of taxes of $25.5 million) extraordinary loss on early extinguishment of debt recorded for the nine months ended September 29, 2002 has been reclassified as "loss on repurchase of debentures and early retirement of term loans" in other expense, net.

On December 30, 2002, we adopted SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of the commitment to an exit or disposal plan. Accordingly, all costs associated with exit or disposal activities will be recognized when they are incurred effective with our 2003 fiscal year. This Statement did not have a material effect on our financial condition or results of operations.

On December 30, 2002, we also adopted Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 45, "Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." FIN No. 45 clarifies disclosures that are required to be made for certain guarantees and establishes a requirement to record a liability at fair value for certain guarantees at the time of the guarantee's issuance. FIN No. 45 did not have any impact on our financial condition, results of operations or required disclosures.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest Entities, an Interpretation of ARB 51." FIN No. 46 requires that the primary beneficiary in a variable interest entity consolidate the entity even if the primary beneficiary does not have a majority voting interest. The consolidation requirements of this Interpretation are required to be implemented for any variable interest entity created on or after January 31, 2003. In addition, FIN No. 46 requires disclosure of information regarding guarantees or exposures to loss relating to any variable interest entity existing prior to January 31, 2003 in financial statements issued after January 31, 2003. We have completed our review of certain potential variable interest entities, which are lessors under some of our operating lease agreements, as well as our accounts receivable securitization facility, to determine the impact of FIN No. 46. We have determined that there will be no impact on our financial position or results of operations due to the adoption of this Interpretation.

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In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." This Statement amends Statement 133 for certain decisions made as part of the Derivatives Implementation Group process that effectively required amendments to Statement 133, in connection with other FASB projects dealing with financial instruments and in connection with implementation issues raised in relation to the application of the definition of a derivative. This Statement is effective for contracts entered into or modified after June 30, 2003 (with exceptions) and for hedging relationships designated after June 30, 2003. SFAS No. 149 did not have any impact on our financial condition, results of operations or required disclosures.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities, for which it is effective for the first fiscal period beginning after December 15, 2003. We are currently reviewing the provisions of this Statement. Due to the Company being a nonpublic entity as defined in SFAS No. 150, we will adopt it effective with the quarter ending March 28, 2003.

Outlook

Our principal use of funds from operating activities and borrowings for the next several years are expected to fund interest and principal payments on our indebtedness, growth related capital expenditures and working capital increases, strategic acquisitions and lease expense. We believe that our liquidity and capital resources including anticipated cash flow from operations will be sufficient to meet debt service, capital expenditure and other short-term and long-term obligations and needs, but we are subject to unforeseeable events and the risk that we are not successful in implementing our business strategies.

Our largest raw material requirement is special bar quality steel. In response to the imposed tariffs on imported steel and growing instability in the domestic steel industry, Metaldyne has been negotiating with steel vendors and customers, petitioning the government to repeal the steel tariffs and designing re-sourcing strategies to mitigate the effect of the steel price increases.

Other Matters

Forward-Looking Statements

This discussion and other sections of this report contain statements reflecting the Company's views about its future performance and constitute "forward-looking statements." These views involve risks and uncertainties that are difficult to predict and may cause the Company's actual results to differ significantly from the results discussed in such forward-looking statements. Readers should consider that various factors may affect our ability to attain the projected performance, including:

• Dependence on Automotive Industry and Industry Cyclicality — The industries in which we operate depend upon general economic conditions and are highly cyclical.

• Customer Concentration — Our base of customers is concentrated and the loss of business from a major customer, the discontinuance of particular vehicle models or a change in auto consumer preferences or regulations could materially adversely affect us.

• Challenges of Acquisition Strategy — We intend to actively pursue acquisitions and/or joint ventures but we may not be able to identify attractive acquisition and/or joint venture candidates, successfully integrate our acquired operations or realize the intended benefits of our acquisitions and/or joint ventures.

• Liquidity and Capital Resources — If we are unable to meet future capital requirements, our business may be adversely affected.

• Dependence on Third-Party Suppliers and Manufacturers — Increases in our raw material or energy costs or the loss of a substantial number of our suppliers could negatively affect our financial health.

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• Customer Pricing Pressures — As a result of the current market downturn and the highly competitive nature of the industries that we serve, the current trend among many of our customers is to demand significant price reductions. The commodity sections of our business, such as our forging operations, continue to receive the greatest pressure to reduce their prices.

• Changing Technology — Our products are subject to changing technology, which could place us at a competitive disadvantage relative to alternative products introduced by competitors.

• Dependence on Key Personnel and Relationships — We depend on the services of key individuals and relationships, the loss of which would materially harm us.

• Labor Stoppages Affecting OEMs — We may be subject to work stoppages at our facilities or those of our principal customers, which could seriously impact the profitability of our business.

• Outsourcing Trend — Our strategy may not succeed if anticipated outsourcing fails to occur due to union considerations.

• International Sales — A growing portion of our revenue may be derived from international sources, which exposes us to certain risks.

• Product Liability — We may incur material losses and costs as a result of product liability and warranty claims that may be brought against us.

• Environmental Matters — Our business may be materially and adversely affected by compliance obligations and liabilities under environmental laws and regulations.

• Control by Principal Stockholder — We are controlled by Heartland, whose interests in our business may be different than yours.

• Terms of Shareholders Agreement — Provisions of the shareholders agreement impose significant operating and financial restrictions on our business.

• Leverage; Ability to Service Debt — We may not be able to manage our business as we might otherwise do so due to our high degree of leverage.

• Substantial Restrictions and Covenants — Restrictions in our credit facility, under the indenture governing the exchange notes and under the indenture governing our 10% senior notes due 2013 limit our ability to take certain actions.

All statements, other than statements of historical fact included in this quarterly report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this quarterly report, the words "will," "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as of the date of this quarterly report. You should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this quarterly report are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we are exposed to market risk associated with fluctuations in foreign exchange rates. We are also subject to interest risk as it relates to long-term debt. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" for details about our primary market risks, and the objectives and strategies used to manage these risks.

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ITEM 4.    CONTROLS AND PROCEDURES

(a) An evaluation was carried out by management with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) pursuant to Rule 13a-15 of the Exchange Act. Our disclosure controls and procedures are designed only to provide reasonable assurance that they will meet their objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures are effective to provide reasonable assurance that they will meet their objectives.

(b) There have not been any changes in our internal control over financial reporting during the last fiscal quarter to which this report relates that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. OTHER INFORMATION

METALDYNE CORPORATION

Items 1, 2, 3, 4 and 5 are not applicable.

Item 6. Exhibits And Reports On Form 8-K

(A) Exhibits:

Exhibit 3.1				Restated Certificate of Incorporation of MascoTech, Inc.(1)
Exhibit 3.2				Bylaws of Metaldyne Corporation.(2)
Exhibit 10.1				Employment Agreement with Executive Vice President and Chief Financial Officer dated July 16, 2003.
Exhibit 10.2				Release Agreement with Former Executive Vice President and Chief Financial Officer dated July 15, 2003.
Exhibit 12				Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
Exhibit 31.1				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1) Incorporated by reference from the Exhibits filed with Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2000.

(2) Incorporated by reference from the Exhibits filed with MascoTech, Inc.'s (now known as Metaldyne Corporation) Registration Statement on Form S-1 filed December 27, 2000.

(B) Reports On Form 8-K:

We filed a current report on Form 8-K on August 25, 2003, reporting under Item 5, Other Events, to reissue Metaldyne Corporation's financial statements and related notes for the fiscal year ended December 29, 2002, to reflect the adoption of Statement of Financial Accounting Standards ("SFAS") No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS 145, among other things, requires the Company to reclassify the loss on repurchase of debentures and early retirement of term loan of $68.9 million (or $43.4 million, net of tax) originally recorded as an extraordinary loss in the December 29, 2002 financial statements to other income/expense.

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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.

METALDYNE CORPORATION

(Registrant)

Date: November 10, 2003

BY:

/s/    Jeffrey M. Stafeil

Jeffrey M. Stafeil Executive Vice President and Chief Financial Officer (Chief Accounting Officer and Authorized Signatory)

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METALDYNE CORPORATION

EXHIBIT INDEX

Exhibit

Exhibit 3.1				Restated Certificate of Incorporation of MascoTech, Inc.(1)
Exhibit 3.2				Bylaws of Metaldyne Corporation.(2)
Exhibit 10.1				Employment Agreement with Executive Vice President and Chief Financial Officer dated July 16, 2003.
Exhibit 10.2				Release Agreement with Former Executive Vice President and Chief Financial Officer dated July 15, 2003.
Exhibit 12				Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
Exhibit 31.1				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1) Incorporated by reference from the Exhibits filed with Metaldyne Corporation's Annual Report on Form 10-K for the year December 31, 2000.

(2) Incorporated by reference from the Exhibits filed with MascoTech, Inc.'s (now known as Metaldyne Corporation) Registration Statement on Form S-1 filed December 27, 2000.

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Agreement is made by and between Metaldyne Corporation, a Delaware corporation ("Company") and Jeffrey Stafeil (hereinafter "Executive") effective July 16, 2003 ("Effective Date"). In order to induce Executive to serve as its Executive Vice President and Chief Financial Officer, Company enters into this Agreement with Executive to set out the terms and conditions that will apply to Executive's employment with Company. Executive is willing to accept such employment and assignment and to perform services on the terms and conditions hereinafter set forth. It is therefore hereby agreed by and between the parties as follows:

Section 1 — Employment.

(a) Company employs Executive as its Executive Vice President and Chief Financial Officer. In this capacity, Executive shall report to the Chief Executive Officer ("CEO"). Executive accepts employment in accordance with this Agreement and agrees to devote his full business time and efforts to the performance of his duties and responsibilities hereunder.

(b) Nothing in this Agreement shall preclude Executive from engaging in charitable and community affairs, from managing any passive investment (i.e., an investment with respect to which Executive is in no way involved with the management or operation of the entity in which Executive has invested) made by him in publicly traded equity securities or other property (provided that no such investment may exceed five percent (5%) of the equity of any entity, without the prior approval of the Board of Directors of Metaldyne Corporation (the "Board")), or from serving, subject to the prior approval of the Board, as a member of boards of directors or as a trustee of any other corporation, association or entity, to the extent that any of the above activities do not conflict with any provision of this Agreement.

Section 2 — Term of Employment.    Executive's term of employment under this Agreement ("Term of Employment") shall commence on the Effective Date and, subject to the terms hereof, shall terminate on the earlier of: December 31, 2005 ("Initial Period"); or the date that either party terminates Executive's employment under this Agreement; provided that subsequent to the Initial Period, the Term of Employment shall automatically renew each January for one year ("Renewal Period"), unless Company delivers to Executive or Executive delivers to Company written notice at least thirty (30) days in advance of the expiration of the Initial Period or any Renewal Period, that the Term of Employment shall not be extended, in which case the Term of Employment shall end at the end of the Year in which such notice was delivered and shall not be further extended except by written agreement of Company and Executive. The expiration of the Term of Employment under this Agreement shall not be a termination of this Agreement to the extent that other provisions of this Agreement by their terms survive the Term of Employment. For purposes of this Agreement, the term "Year" shall mean the twelve-month period commencing on the Effective Date and each anniversary of the Effective Date.

Section 3 — Compensation.

(a) Salary.    During the Initial Period, Company shall pay Executive at the rate of Three Hundred Thousand Dollars ($300,000) per annum ("Base Salary"). Base Salary shall be payable in accordance with the ordinary payroll practices of Company and shall be subject to all applicable federal, state and local withholding and reporting requirements. Base Salary may be adjusted by the President and CEO during the Term of Employment.

(b) Annual Value Creation Plan ("AVCP").    Executive shall be eligible to participate in the AVCP, a copy of which has been provided to Executive, subject to all the terms and conditions of such plan, as such plan may be modified from time to time.

Section 4 — Employee Benefits.

(a) Employee Retirement Benefit Programs, Welfare Benefit Programs, Plans and Practices. Company shall provide Executive with coverage under any retirement benefit programs,

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welfare benefit programs, plans and practices, that Company makes available to its senior executives, in accordance with the terms thereof, as such programs, plans and practices may be amended from time to time in accordance with their terms.

(b) Vacation.    Executive shall be entitled to twenty (20) business days of paid vacation each calendar year, which shall be taken at such times as are consistent with Executive's responsibilities hereunder. Vacation days shall be subject to the Company's general policies regarding vacation days, as such policies may be modified from time to time.

(c) Perquisites.    During Executive's employment hereunder, Company shall provide Executive, subject to review and approval by the President and CEO, with such additional perquisites as are generally available to similarly-situated executives.

(d) Stock Options.    Executive shall be eligible to participate in the Metaldyne Corporation 2001 Long Term Equity Incentive Plan in accordance with the terms and conditions of such plan and any grant agreements thereunder.

Section 5 — Expenses.    Subject to prevailing Company policy or such guidelines as may be established by the CEO or his delegee, Company will reimburse Executive for all reasonable expenses incurred by Executive in carrying out his duties.

Section 6 — Termination of Employment.    The respective rights and responsibilities of the parties to this Agreement notwithstanding, Executive remains an employee-at-will, and his Term of Employment may be terminated by either party at any time for any reason by written notice.

(a) Termination Without Cause or for Good Reason.    If Executive's employment is terminated during the Term of Employment by Company for any reason other than Cause (as defined in Section 6(c) hereof), Disability (as defined in Section 6(e) hereof) or death, or if Executive's employment is terminated by Executive for Good Reason (as defined in Section 6(a)(2) hereof), then Company shall pay Executive the Severance Package. Any termination of employment that results from a notice of nonrenewal given in accordance with Section 2 of this Agreement shall not be a termination under this Section 6(a) but shall instead be a termination under Section 6(b) below. Likewise, a termination by Executive without Good Reason shall be a termination under Section 6(b) below and not a termination under this Section 6(a).

(1) For purposes of this Agreement, "Severance Package" shall mean:

(A) Base Salary continuation for twenty-four (24) months at Executive's annual Base Salary rate in effect on the date of termination, subject to all applicable federal, state and local withholding and reporting requirements. These salary continuation payments shall be paid in accordance with usual Company payroll practices;

(B) A bonus equal to two hundred percent (200%) of the target bonus opportunity under AVCP, payable in equal installments over the twenty-four (24) month period described in Section 6(a)(1)(A) above, subject to the same withholding and reporting requirements. In addition, Executive shall receive the bonus for the most recently completed bonus term if a bonus has been declared for such term but not paid, and a pro rata bonus for the year of termination through the date of termination calculated at one hundred percent (100%) of the bonus opportunity for target performance for that term, multiplied by a fraction the numerator of which is the number of days that Executive was employed during such bonus term and the denominator of which is 365. The prorated bonus for the final year shall be paid in a single sum within ten (10) days of the termination of Executive's employment with Company. Any unpaid bonus shall be paid in accordance with customary practices for payment of bonuses under AVCP; and

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(C) Continuation of benefits under any life, group medical, and dental insurance benefits substantially similar to those which Executive was receiving immediately prior to termination of employment until the earlier of:

(i) the end of the twenty-four (24) month period following Executive's termination of employment, or

(ii) the date on which Executive becomes eligible to receive any benefits under any plan or program of any other employer.

The continuing coverage provided under this Section 6(a)(1)(C) is subject to Executive's eligibility to participate in such plans and all other terms and conditions of such plans, including without limitation, any employee contribution requirements and Company's ability to modify or terminate such plans or coverages. Company may satisfy this obligation in whole or in part by paying the premium otherwise payable by Executive for continuing coverage under Section 601 et seq. of the Employee Retirement Income Security Act of 1974, as it may be amended or replaced from time to time. If Executive is not eligible for continued coverage under one of the Company-provided benefit plans noted in this paragraph (C) that he was participating in during his employment, Company shall pay Executive the cash equivalent of the insurance cost for the duration of the applicable period at the rate of the Company's cost of coverage for Executive's benefits as of the date of termination. Any obligation to pay the cash equivalent of such cost under this item may be settled, at Company's discretion, by a lump-sum payment of any remaining premiums.

(2) For purposes of this Agreement, a termination of employment by Executive for "Good Reason" shall be a termination by Executive following the occurrence of any of the following events unless Company has cured as provided below:

(A) A material and permanent diminution in Executive's duties or responsibilities;

(B) A material reduction in the aggregate value of Base Salary and bonus opportunity; or

(C) A permanent reassignment of Executive to another primary office, or a relocation of the Company office that is Executive's primary office, unless Executive's primary office following such reassignment or relocation is within thirty-five (35) miles of Executive's primary office before the reassignment or relocation or Executive's permanent residence on the date of the reassignment or relocation.

Executive must notify Company of any event constituting Good Reason within one hundred twenty (120) days after Executive becomes aware of such event or such event shall not constitute Good Reason for purposes of this Agreement provided that Company shall have fifteen (15) days from the date of such notice to cure the Good Reason event. Executive cannot terminate his employment for Good Reason if Cause exists at the time of such termination. A termination by Executive following cure shall not be a termination for Good Reason. A failure of Executive to notify Company after the first occurrence of an event constituting Good Reason shall not preclude any subsequent occurrences of such event (or similar event) from constituting Good Reason.

(b) Voluntary Termination by Executive; Expiration of Employment Term.    If Executive terminates his employment with Company without Good Reason, or if the Employment Term expires following notice of nonrenewal by either party under Section 2, then Company shall pay Executive his accrued unpaid Base Salary through the date of termination and the AVCP award for the most recently completed year if an award has been declared for such year but not paid. The accrued unpaid Base Salary amounts payable under this Section 6(b) shall be payable in a lump sum within ten (10) days of termination of employment. Any accrued unpaid bonus amounts payable under this Section 6(b) shall be payable in accordance with customary

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practices for payment of bonuses under AVCP. No prorated bonus for the year of termination shall be paid. Any other benefits under other plans and programs of Company in which Executive is participating at the time of Executive's termination of employment shall be paid, distributed, settled, or shall expire in accordance with their terms, and Company shall have no further obligations hereunder with respect to Executive following the date of termination of employment.

(c) Termination for Cause.    If Executive's employment is terminated for Cause, Company shall pay Executive his accrued but unpaid Base Salary through the date of the termination of employment, and no further payments or benefits shall be owed. The accrued unpaid Base Salary amounts payable under this Section 6(c) shall be payable in a lump sum within ten (10) days of termination of employment. As used herein, the term "Cause" shall be limited to:

(1) Executive's conviction of or plea of guilty or nolo contendere to a crime constituting a felony under the laws of the United States or any state thereof or any other jurisdiction in which Company conducts business;

(2) Executive's willful misconduct in the performance of his duties to Company;

(3) Executive's willful and continued failure to follow the instructions of Company's Board or CEO; or

(4) Executive's willful and/or continued neglect of duties (other than any such neglect resulting from incapacity of Executive due to physical or mental illness);

provided, however, that Cause shall arise under items (3) or (4) only following ten (10) days written notice thereof from Company which specifically identifies such failure or neglect and the continuance of such failure or neglect during such notice period. Any failure by Company to notify Executive after the first occurrence of an event constituting Cause shall not preclude any subsequent occurrences of such event (or a similar event) from constituting Cause.

(d) Termination Following a Change of Control.    In the event Executive's employment with Company terminates by reason of a Qualifying Termination (as defined below) within three (3) years after a Change of Control of Company (as defined below), then, in lieu of the Severance Package, and subject to the limitations described in Section 7 below, the Company shall provide Executive the following termination benefits:

(1) Termination Payments.    Company shall pay Executive:

(A) A single sum payment equal to three hundred percent (300%) of Executive's annual Base Salary rate in effect on the date of termination, subject to all applicable federal, state and local withholding and reporting requirements. This single-sum payment shall be paid within ten (10) days of termination of employment;

(B) A bonus equal to three hundred percent (300%) of the target bonus opportunity under AVCP. In addition, Executive shall receive the bonus for the most recently completed bonus term if a bonus has been declared for such term but not paid, and a pro rata bonus for the year of termination through the date of termination calculated at one hundred percent (100%) of the bonus opportunity for target performance for that term, multiplied by a fraction the numerator of which is the number of days that Executive was employed during such bonus term and the denominator of which is 365. The prorated bonus for the final year shall be paid as a single sum within ten (10) days of termination of employment. Any unpaid bonus shall be paid in accordance with customary practices for payment of bonuses under AVCP.

All payments under this Section 6(d), however, are subject to the timing rules, calculations and adjustments described in Sections 7 and 8.

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(2) Benefits Continuation.    Executive shall continue to receive life, group medical and dental insurance benefits substantially similar to those which Executive was receiving immediately prior to the Qualifying Termination until the earlier of:

(A) the end of the thirty-six (36) month period following Executive's termination of employment, or

(B) the date on which Executive becomes eligible to receive any benefits under any plan or program of any other employer.

The continuing coverage provided under this Section 6(d)(2) is subject to Executive's eligibility to participate in such plans and all other terms and conditions of such plans, including without limitation, any employee contribution requirements and Company's ability to modify or terminate such plans or coverages. Company may satisfy this obligation in whole or in part by paying the premium otherwise payable by Executive for continuing coverage under Section 601 et seq. of the Employee Retirement Income Security Act of 1974, as it may be amended or replaced from time to time. If Executive is not eligible for continued coverage under one of the Company-provided benefit plans noted in this paragraph (2) that he was participating in during his employment, Company shall pay Executive the cash equivalent of the insurance cost for the duration of the applicable period at the rate of the Company's cost of coverage for Executive's benefits as of the date of termination. Any obligation to pay the cash equivalent of such cost of coverage under this item may be settled, at Company's discretion, by a lump-sum payment of any remaining premiums.

(3) Qualifying Termination.    For purposes of this Agreement, the term "Qualifying Termination" means a termination of Executive's employment with the Company for any reason other than:

(A) death;

(B) Disability, as defined herein;

(C) Cause, as defined herein; or

(D) A termination by Executive without Good Reason, as defined herein.

(4) Change of Control Defined.    For purposes of this Agreement, a "Change of Control" means the first of the following events to occur following the date hereof:

(A) The sale, lease, or transfer in one or a series of related transactions (I) of eighty percent (80%) or more of the consolidated assets of Company and its subsidiaries or (II) of seventy-five percent (75%) or more of Capital Stock of Company held by the Heartland Entities as of November 28, 2000 (appropriately adjusted for stock splits, combinations, subdivisions, stock dividends and similar events) to any Person or group of persons other than an affiliate of the Heartland Entities, whether directly or indirectly or by way of any merger, consolidation or other business combination or purchase of beneficial ownership or otherwise. The term "group of persons" shall have the meaning of the term "person" set forth in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 ("1934 Act") or any similar successor provision, and the rules, regulations and interpretations promulgated thereunder. The term "beneficial ownership" shall have the meaning defined under Rule 13d-3 under the 1934 Act or any similar successor rules, regulations and interpretations promulgated thereunder.

(B) The date on which the individuals who constitute Company's Board of Directors on the date of this agreement, and any new Directors who are hereafter designated by the Heartland entities cease, for any reason, to constitute at least a majority of the members of the Board.

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Except as otherwise indicated herein, the definition of all capitalized terms in this Section 6(d)(4) is set forth in the Shareholders Agreement by and among MascoTech, Inc., Masco Corporation, Richard Manoogian, The Richard and Jane Manoogian Foundation, and the Heartland Entities, et al., dated November 28, 2000 (the "Shareholders Agreement").

(e) Disability.    In the event that Executive is unable to perform his duties under this Agreement on account of a disability which continues for one hundred eighty (180) consecutive days or more, or for an aggregate of one hundred eighty (180) days in any period of twelve (12) months, Company may, in its discretion, terminate Executive's employment hereunder. Company's obligation to make payments under this Agreement shall, except for earned but unpaid Base Salary and AVCP awards, cease on the first to occur of (i) the date that is six (6) months after such termination or (ii) the date Executive becomes entitled to benefits under a Company-provided long-term disability program. For purposes of this Agreement, "Disability" shall be defined by the terms of Company's long-term disability policy, or, in the absence of such policy, as a physical or mental disability that prevents Executive from performing substantially all of his duties under this Agreement and which is expected to be permanent. Company may only terminate Executive on account of Disability after giving due consideration to whether reasonable accommodations can be made under which Executive is able to fulfill his duties under this Agreement. The commencement date and expected duration of any physical or mental condition that prevents Executive from performing his duties hereunder shall be determined by a medical doctor selected by Company. Company may, in its discretion, require written confirmation from a physician of Disability during any extended absence.

(f) Death.    In the event of Executive's death during the Term of Employment, all obligations of Company to make any further payments, other than an obligation to pay any accrued but unpaid Base Salary to the date of death and any accrued but unpaid bonuses under AVCP to the date of death, shall terminate upon Executive's death.

(g) No Duplication of Benefits.    Notwithstanding any provision of this Agreement to the contrary, if Executive's employment is terminated for any reason, in no event shall Executive be eligible for payments under more than one subsection of this Section 6.

(h) Payments Not Compensation.    Any participation by Executive in, and any terminating distributions and vested rights under, Company-sponsored retirement or savings plans, regardless of whether such plans are qualified or nonqualified for tax purposes, shall be governed by the terms of those respective plans. For purposes of determining benefits and the amounts to be paid to Executive under such plans, any salary continuation or severance benefits other than salary or bonus accrued before termination shall not be compensation for purposes of accruing additional benefits under such plans.

(i) Executive's Duty to Provide Materials.    Upon the termination of the Term of Employment for any reason, Executive or his estate shall surrender to Company all correspondence, letters, files, contracts, mailing lists, customer lists, advertising material, ledgers, supplies, equipment, checks, and all other materials and records of any kind that are the property of Company or any of its subsidiaries or affiliates, that may be in Executive's possession or under his control, including all copies of any of the foregoing.

Section 7 — Cap on Payments.

(a) General Rules.    The Internal Revenue Code (the "Code") may place significant tax burdens on Executive and Company if the total payments made to Executive due to a Change of Control exceed prescribed limits. For example, if Executive's "Base Period Income" (as defined below) is $100,000, Executive's limit or "Cap" is $299,999. If Executive's "Total Payments" exceed the Cap by even $1.00, Executive is subject to an excise tax under Section 4999 of the Code of 20% of all amounts paid to Executive in excess of $100,000. In other words, if Executive's Cap is $299,999, Executive will not be subject to an excise tax if Executive receives exactly $299,999. If Executive receives $300,000, Executive will be subject to an excise tax of $40,000 (20% of

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$200,000). In order to avoid this excise tax and the related adverse tax consequences for Company, by signing this Agreement, Executive will be agreeing that, subject to the exception noted below, the present value of Executive's Total Payments will not exceed an amount equal to Executive's Cap.

(b) Special Definitions.    For purposes of this Section, the following specialized terms will have the following meanings:

(1) "Base Period Income".    "Base Period Income" is an amount equal to Executive's "annualized includable compensation" for the "base period" as defined in Sections 280G(d)(1) and (2) of the Code and the regulations adopted thereunder. Generally, Executive's "annualized includable compensation" is the average of Executive's annual taxable income from Company for the "base period," which is the five calendar years prior to the year in which the Change of Control occurs. These concepts are complicated and technical and all of the rules set forth in the applicable regulations apply for purposes of this Agreement.

(2) "Cap" or "280G Cap".    "Cap" or "280G Cap" shall mean an amount equal to 2.99 times Executive's "Base Period Income." This is the maximum amount which Executive may receive without becoming subject to the excise tax imposed by Section 4999 of the Code or which Company may pay without loss of deduction under Section 280G of the Code.

(3) "Total Payments".    The "Total Payments" include any "payments in the nature of compensation" (as defined in Section 280G of the Code and the regulations adopted thereunder), made pursuant to this Agreement or otherwise, to or for Executive's benefit, the receipt of which is contingent on a Change of Control and to which Section 280G of the Code applies.

(c) Calculating the Cap and Adjusting Payments.    If Company believes that these rules will result in a reduction of the payments to which Executive is entitled under this Agreement, it will so notify Executive as soon as possible. Company will then, at its expense, retain a "Consultant" (which shall be a law firm, a certified public accounting firm, and/or a firm of recognized executive compensation consultants) to provide an opinion or opinions concerning whether Executive's Total Payments exceed the limit discussed above. Company will select the Consultant. At a minimum, the opinions required by this Section must set forth the amount of Executive's Base Period Income, the present value of the Total Payments and the amount and present value of any excess parachute payments. If the opinions state that there would be an excess parachute payment, Executive's payments under this Agreement will be reduced to the extent necessary to eliminate the excess. Executive will be allowed to choose the payment that should be reduced or eliminated, but the payment Executive chooses to reduce or eliminate must be a payment determined by such Consultant to be includable in Total Payments. Executive's decision shall be in writing and delivered to Company within thirty (30) days of Executive's receipt of such opinions. If Executive fails to so notify Company, Company will decide which payments to reduce or eliminate. If the Consultant selected to provide the opinions referred to above so requests in connection with the opinion required by this Section, a firm of recognized executive compensation consultants selected by Company shall provide an opinion, upon which such Consultant may rely, as to the reasonableness of any item of compensation as reasonable compensation for services rendered before or after the Change of Control. If Company believes that Executive's Total Payments will exceed the limitations of this Section, it will nonetheless make payments to Executive, at the times stated above, in the maximum amount that it believes may be paid without exceeding such limitations. The balance, if any, will then be paid after the opinions called for above have been received. If the amount paid to Executive by Company is ultimately determined, pursuant to the opinion referred to above or by the Internal Revenue Service, to have exceeded the limitation of this Section, the excess will be treated as a loan to Executive by Company and shall be repayable on the ninetieth (90^th) day following demand by Company, together with interest at the lowest

7

"applicable federal rate" provided in Section 1274(d) of the Code. If it is ultimately determined, pursuant to the opinion referred to above or by the Internal Revenue Service, that a greater payment should have been made to Executive, Company shall pay Executive the amount of the deficiency, together with interest thereon from the date such amount should have been paid to the date of such payment, at the rate set forth above, so that Executive will have received or be entitled to receive the maximum amount to which Executive is entitled under this Agreement.

(d) Effect of Repeal.    In the event that the provisions of Sections 280G and 4999 of the Code are repealed without succession, this Section shall be of no further force or effect.

(e) Exception.    The Consultant selected pursuant to Section 7(c) will calculate Executive's "Uncapped Benefit" and Executive's "Capped Benefit." The limitations of Section 7(a) will not apply to Executive if Executive's Uncapped Benefit is at least one hundred five percent (105%) of Executive's Capped Benefit. For this purpose, Executive's "Uncapped Benefit" is the amount to which Executive would be entitled pursuant to Section 6(d), without regard to the limitations of Section 7(a). Executive's "Capped Benefit" is the amount to which Executive would be entitled pursuant to Section 6(d) after the application of the limitations of Section 7(a).

Section 8 — Tax Gross-Up.

(a) Gross-Up Payment.    If the Cap imposed by Section 7(a) does not apply to Executive because of the exception provided by Section 7(e), Company will provide Executive with a "Gross-Up Payment" if an excise tax is imposed on Executive pursuant to Section 4999 of the Code. Except as otherwise noted below, this Gross-Up Payment will consist of a single lump sum payment in an amount such that after payment by Executive of the "total presumed federal and state taxes" and the excise taxes imposed by Section 4999 of the Code on the Gross-Up Payment (and any interest or penalties actually imposed), Executive would retain an amount of the Gross-Up Payment equal to the remaining excise taxes imposed by Section 4999 of the Code on Executive's Total Payments (calculated before the Gross-Up Payment). For purposes of calculating Executive's Gross-Up Payment, Executive's actual federal and state income taxes will not be used. Instead, Company will use Executive's "total presumed federal and state taxes." For purposes of this Agreement, Executive's "total presumed federal and state taxes" shall be conclusively calculated using a combined tax rate equal to the sum of the maximum marginal federal and applicable state income tax rates. The state tax rate for Executive's principal place of residence will be used and no adjustments will be made for the deduction of state taxes on the federal return, any deduction of federal taxes on a state return, the loss of itemized deductions or exemptions, or for any other purpose.

(b) Calculations.    All determinations concerning whether a Gross-Up Payment is required pursuant to Section 8(a) and the amount of any Gross-Up Payment (as well as any assumptions to be used in making such determinations) shall be made by the Consultant selected pursuant to Section 7(c). The Consultant shall provide Executive and Company with a written notice of the amount of the excise taxes that Executive is required to pay and the amount of the Gross-Up Payment. The notice from the Consultant shall include any necessary calculations in support of its conclusions. All fees and expenses of the Consultant shall be paid by Company. Any Gross-Up Payment shall be made by Company within fifteen (15) days after the mailing of such notice. As a general rule, the Consultant's determination shall be binding on Executive and Company. The application of the excise tax rules of Section 4999, however, is complex and uncertain and, as a result, the Internal Revenue Service may disagree with the Consultant concerning the amount, if any, of the excise taxes that are due. If the Internal Revenue Service determines that excise taxes are due, or that the amount of the excise taxes that are due is greater than the amount determined by the Consultant, the Gross-Up Payment will be recalculated by the Consultant to reflect the actual excise taxes that Executive is required to pay (and any related interest and penalties). Any deficiency will then be paid to Executive by Company within fifteen (15) days of the receipt of the revised calculations from the Consultant. If the Internal Revenue Service determines that the amount of excise taxes that Executive paid

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exceeds the amount due, Executive shall return the excess to Company (along with any interest paid to Executive on the overpayment) immediately upon receipt from the Internal Revenue Service or other taxing authority. Company has the right to challenge any excise tax determinations made by the Internal Revenue Service. If Company agrees to indemnify Executive from any taxes, interest and penalties that may be imposed upon Executive (including any taxes, interest and penalties on the amounts paid pursuant to Company's indemnification agreement), Executive must cooperate fully with Company in connection with any such challenge. Company shall bear all costs associated with the challenge of any determination made by the Internal Revenue Service and Company shall control all such challenges. The additional Gross-Up Payments called for by the preceding paragraph shall not be made until Company has either exhausted its (or Executive's) rights to challenge the determination or indicated that it intends to concede or settle the excise tax determination. Executive must notify Company in writing of any claim or determination by the Internal Revenue Service that, if upheld, would result in the payment of excise taxes in amounts different from the amount initially specified by the Consultant. Such notice shall be given as soon as possible but in no event later than fifteen (15) days following Executive's receipt of notice of the Internal Revenue Service's position.

Section 9 — Notices.    All notices or communications hereunder shall be in writing, addressed as follows:

To Company: Metaldyne Corporation
47603 Halyard Drive
Plymouth, MI 48170
ATTN: Chairman of the Board

with a copy to: R. Jeffrey Pollock, Esq.
McDonald, Hopkins, Burke &
    Haber Co., L.P.A.
600 Superior Avenue, Suite 2100
Cleveland, OH 44114

To Executive: __________________________
__________________________
__________________________

with a copy to: __________________________
__________________________
__________________________
__________________________

Any such notice or communication shall be delivered by hand or by courier or sent certified or registered mail, return receipt requested, postage prepaid, addressed as above (or to such other address as such party may designate in a notice duly delivered as described above), and the third (3^rd) business day after the actual date of mailing shall constitute the time at which notice was given.

Section 10 — Separability; Legal Fees.    If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect. In the event of a dispute by Company, Executive or others as to the validity or enforceability of, or liability under, any provision of this Agreement, Company shall reimburse Executive for all reasonable legal fees and expenses incurred by him in connection with such dispute if Executive substantially prevails in the dispute and if Executive has not substantially prevailed in such dispute one-half (½) the amount of all reasonable legal fees and expenses incurred by him in connection with such dispute except to the extent Executive's position is found by a tribunal of competent jurisdiction to have been frivolous.

Section 11 — Assignment and Assumption.    This contract shall be binding upon and inure to the benefit of the heirs and representatives of Executive and the assigns and successors of Company, but

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neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise subject to hypothecation by Executive (except by will or by operation of the laws of intestate succession) or by Company, except that Company may assign this Agreement to any successor (whether by merger, purchase or otherwise) to all or substantially all of the stock, assets or business of Company.

Section 12 — Amendment.    This Agreement may only be amended by written agreement of the parties hereto.

Section 13 — Non-Competition; Non-Solicitation; Confidentiality.

(a) Executive represents that acceptance of employment under this Agreement and performance under this Agreement are not in violation of any restrictions or covenants under the terms of any other agreements to which Executive is a party.

(b) Executive acknowledges and recognizes the highly competitive nature of the business of Company and accordingly agrees that, in consideration of this Agreement, the rights conferred hereunder, and any payment hereunder, during the Term of Employment and for the six (6) month period following the termination of Executive's employment with Company, for any reason ("Non-Compete Term"), Executive shall not engage, either directly or indirectly, as a principal for Executive's own account or jointly with others, or as a stockholder in any corporation or joint stock association, or as a partner or member of a general or limited liability entity, or as an employee, officer, director, agent, consultant or in any other advisory capacity in any business other than Company or its subsidiaries which designs, develops, manufacturers, distributes, sells or markets the type of products or services sold, distributed or provided by Company or its subsidiaries during the two (2) year period prior to the date of termination (the "Business"); provided that nothing herein shall prevent Executive from owning, directly or indirectly, not more than five percent (5%) of the outstanding shares of, or any other equity interest in, any entity engaged in the Business and listed or traded on a national securities exchanges or in an over-the-counter securities market.

(c) During the Non-Compete Term, Executive shall not (i) directly or indirectly employ or solicit, or receive or accept the performance of services by, any active employee of Company or any of its subsidiaries who is employed primarily in connection with the Business, except in connection with general, non-targeted recruitment efforts such as advertisements and job listings, or directly or indirectly induce any employee of Company to leave Company, or assist in any of the foregoing, or (ii) solicit for business (relating to the Business) any person who is a customer or former customer of Company or any of its subsidiaries, unless such person shall have ceased to have been such a customer for a period of at least six (6) months.

(d) Executive shall not at any time (whether during or after his employment with Company) disclose or use for Executive's own benefit or purposes or the benefit or purposes of any other person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise other than Company and any of its subsidiaries, any trade secrets, information, data, or other confidential information of the Company, including but not limited to, information relating to customers, development programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial data, financing methods, plans or the business and affairs of Company generally, or of any subsidiary of Company, unless required to do so by applicable law or court order, subpoena or decree or otherwise required by law, with reasonable evidence of such determination promptly provided to Company. The preceding sentence of this paragraph (d) shall not apply to information which is not unique to Company or which is generally known to the industry or the public other than as a result of Executive's breach of this covenant. Executive agrees that upon termination of employment with Company for any reason, Executive will return to Company immediately all memoranda, books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to the business of Company and its subsidiaries, except that Executive may retain

10

personal notes, notebooks and diaries. Executive further agrees that Executive will not retain or use for Executive's account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of Company or its subsidiaries.

(e) It is expressly understood and agreed that although Executive and Company consider the restrictions contained in this Section 13 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any tribunal of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

(f) As a condition to the receipt of any benefits described in this Agreement, Executive shall be required to execute an agreement pursuant to which Executive releases any claims he may have against Company and agrees to the continuing enforceability of the restrictive covenants of this Agreement.

(g) This Section 13 will survive the termination of this Agreement.

Section 14 — Remedies.    Executive acknowledges and agrees that Company's remedies at law for a breach or threatened breach of any of the provisions of Section 13 would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, Executive shall forfeit all payments otherwise due under this Agreement and shall return any Severance Package payment made. Moreover, Company, without posting any bond, shall be entitled to seek equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

Section 15 — Survivorship.    The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations. The provisions of this Section 15 are in addition to the survivorship provisions of any other section of this Agreement.

Section 16 — Governing Law; Revenue and Jurisdiction.    If any judicial or administrative proceeding or claim relating to or pertaining to this Agreement is initiated by either party hereto, such proceeding or claim shall and must be filed in a state or federal court located in Wayne County, Michigan and such proceeding or claim shall be governed by and construed under Michigan law, without regard to conflict of law and principals.

Section 17 — Dispute Resolution.    Any dispute related to or arising under this Agreement shall be resolved in accordance with the Metaldyne Dispute Resolution Policy in effect at the time such dispute arises. The Metaldyne Dispute Resolution Policy in effect at the time of this Agreement is attached to this Agreement.

Section 18 — Effect on Prior Agreements.    This Agreement contains the entire understanding between the parties hereto and supersedes in all respects any prior or other agreement or understanding, both written and oral, between Company, any affiliate of Company or any predecessor of Company or affiliate of any predecessor of Company and Executive; provided, however, that this Agreement does not supercede the MascoTech, Inc. Retention Plan or any change in control agreements between Executive and Simpson Industries, Inc., Global Metal Technologies, Inc. ("GMTI"), or MascoTech, Inc. that predates the Heartland Industrial Partners' acquisition of Simpson Industries, Inc., GMTI, or MascoTech, Inc. in the year 2000 or 2001 and which agreements by their terms survive such acquisition for a specified period.

Section 19 — Withholding.    Company shall be entitled to withhold from payment any amount of withholding required by law.

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Section 20 — Section Headings and Construction.    The headings of sections in this Agreement are provided for convenience only and will not effect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding section or sections of this Agreement unless otherwise specified. All words used in this Agreement will be construed to be of such gender or number as circumstances require.

Section 21 — Counterparts.    This Agreement may be executed in one (1) or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same Agreement.

Intending to be legally bound hereby, the parties have executed this Agreement on the dates set forth next to their names below.

COMPANY
METALDYNE CORPORATION

October 14, 2003 By:  /s/ Timothy D. Leuliette

Date

Its:  Chief Executive Officer

EXECUTIVE

August 5, 2003 /s/ Jeffrey M. Stafeil

Date

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EX-10.2

Exhibit 10.2

AGREEMENT

THIS RELEASE AGREEMENT ("Agreement") is made as of this 15th day of July 2003, between William M. Lowe, Jr. ("Executive") and Metaldyne Corporation ("Employer").

INTRODUCTION

I. Executive's last day of work will be July 15, 2003 (the "Termination Date").

II. Employer is not obligated to pay Executive any compensation, benefits or other consideration after the Termination Date except as specifically set forth in Paragraph 1.

III. Executive has had the opportunity to review this Agreement and is encouraged to consult with legal counsel prior to executing this Agreement to ascertain whether Executive has any potential rights or remedies, which are being waived and released by Executive's execution of this Agreement.

IV. Executive and Employer, without any admission of liability, desire to settle with finality, compromise, dispose of, and release all claims, demands and causes of action Executive has asserted or which Executive could assert against Employer, whether arising out of the Executive's Employment Agreement with Employer, dated June 18, 2001 ("Employment Agreement"); any agreement with a predecessor to Employer; the termination of the Employment Agreement; the employment relationship; the termination of the employment relationship; or any condition or benefit of employment or otherwise. This Agreement is not and shall not be construed as an admission by Employer of any liability, an admission against interest or any violation of Employer's policies or procedures.

AGREEMENT

Employer and Executive agree as follows:

1. Severance Package.    As consideration for this Agreement, Employer agrees to provide Executive the Severance Package set forth in this Paragraph 1. The payments and benefits provided under this Paragraph 1 are made in lieu of any further payments or benefits to Executive under the Employment Agreement, and Executive acknowledges that the payments and benefits provided under this Paragraph 1 exceed the amounts that would otherwise be owing to him under the Employment Agreement:

a. Base salary continuation for a period of twenty-four (24) months in the gross amount of $710,326. (The gross amount per pay period will be $13,660.11.) Payment to Executive will be made in equal, bi-weekly installments, minus applicable withholding and payroll taxes.

b. A gross bonus equal to two hundred percent (200%) of the target bonus opportunity under the Annual Value Creation Plan (AVCP), payable in equal installments over the twenty-four (24) month period under the same payment provisions described above. Executive's gross bonus amount for this purpose is $426,195.60. (The gross amount per pay period will be $8,196.07.) In addition, a pro rata bonus for 2003 through the Termination Date calculated at one hundred percent (100%) of the bonus opportunity for target performance under the AVCP. Executive's gross bonus amount for this purpose is $112,095.26, subject to all applicable withholdings described above, paid as a single sum within ten (10) days of the signing of this Agreement.

c. Continuation of benefits under any group medical, dental, and life insurance benefits substantially similar to those which Executive was receiving immediately prior to termination of employment until the earlier of:

1. the end of the twenty-four (24) month period following the Termination Date, or

2. the date on which Executive becomes eligible to receive any benefits under any plan or program of any other employer.

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Employer will pay the employer-portion of the medical, dental, and life insurance coverage. Executive will be required to pay the Executive-portion of the medical, dental, and life insurance premiums. The Executive-portion of the premiums will be billed to the Executive on a monthly basis. Health care continuation will be applied against the COBRA notification period. If Employer is not able to provide coverage under the existing plans, Executive will be paid cash in the amount of the Employer's portion of the premium cost.

d. The effect of this termination on any stock option grants is not addressed by this Agreement and is subject to the plan documents governing such grants.

e. Employer shall pay for outplacement services for Executive with a provider selected by Employer. Employer shall make direct periodic payments for such services to the provider, as needed, provided that such payments shall not in the aggregate exceed Twenty-Thousand Dollars ($20,000).

f. Executive shall continue to participate in the Metaldyne Executive Car Program for a period of six months from the Termination Date in accordance with the terms of that program.

g. Employer shall pay Executive a lump sum amount of $10,000 in lieu of non-qualified retirement plan benefits, for which Executive was not yet vested. This payment will be made within 10 days of signing this Agreement and subject to all applicable withholdings described above.

Executive agrees that he is exclusively liable for the payment of any federal, state, city or other taxes that may be due as a result of any severance benefits received by Executive as provided in this Agreement. Executive further agrees to indemnify and hold Employer harmless from any payment of taxes or penalties, if any, that may be required of Executive as a result of any severance benefits received by Executive pursuant to this Agreement.

2. Termination of Benefits.    Notwithstanding benefits outlined in Paragraph 1 above, Executive shall cease to be an active participant under Employer's retirement and other benefit plans pursuant to the terms of those plans, and no additional benefits shall accrue to Executive after the Termination Date.

3. Non-Competition; Non-Solicitation; Confidentiality; Release Consideration.    Executive acknowledges that he remains subject to the restrictive covenants and remedies contained in Sections 13 and 14 of the Employment Agreement, which covenants and remedies, including the Employer's right to cause a forfeiture of further payments or benefits under the Severance Package of Paragraph 1 and demand repayment of any payments or benefits, are incorporated herein by reference and which by their terms survive the termination of Executive's employment and the Employment Agreement. Employer acknowledges that, by signing this Agreement, Executive has satisfied the requirement of Section 13(f) of the Employment Agreement, and Executive acknowledges that this Agreement provides additional and sufficient consideration for the release contained herein.

4. Return of Property.    Executive agrees to immediately return all Employer property (and any copies of such property) of whatsoever kind and character, including, without limitation, keys, credit cards, documents, computers, computer software, discs and media, policy and procedures manuals and all other tangible or intangible property of Employer.

5. No Disparagement.    Executive agrees not to criticize, disparage or otherwise demean in any way Employer or its respective affiliates, officers, directors, Executives or Employer's products. Likewise, the Employer agrees not to criticize, disparage or otherwise demean the Executive.

6. Release.    Executive, for him, and his heirs, executors, administrators, successors and assigns, hereby releases and forever discharges Employer, its affiliates and respective officers, directors, agents, representatives, shareholders, employees (current and former), employee benefit plans, successors, predecessors, assigns, and any and all other persons, firms, corporations and other legal entities associated with Employer (collectively referred to as the "Released Parties"), of and from any and all claims, demands, actions, causes of action, debts, damages, expenses, suits, contracts, agreements, costs and liabilities of any kind, nature or description, whether direct or indirect, known or

2

unknown, in law or in equity, in contract, tort or otherwise, which Executive ever had, now has or may have against any of the Released Parties as of the date of execution of this Agreement, whether known or unknown, suspected or unsuspected, or which may be based upon pre-existing acts, claims or events occurring at any time up to the present date including, but not limited to, claims arising under the Employment Agreement, Title VII of the Civil Rights Act of 1964 or state civil rights statutes, claims arising under the Age Discrimination in Employment Act of 1967 ("ADEA"), as amended by the Older Workers Benefit Protection Act ("OWBPA"), claims arising under the Americans with Disabilities Act ("ADA"), the Family and Medical Leave Act ("FMLA"), the Fair Labor Standards Act ("FLSA"), the National Labor Relations Act ("NLRA"), the Employee Retirement Income Security Act ("ERISA"), claims for breach of express or implied contract, breach of promise, promissory estoppel, loss of income, back pay, reinstatement, front pay, impairment of earning capacity, wrongful termination, discrimination, damage to reputation, fraud, violation of public policy, retaliation, negligent or intentional infliction of mental or emotional distress, intentional tort or any other federal, state or local common law or statutory claims, and all other claims and rights, whether in law or equity. It is the intention of the parties that this paragraph will be construed as broadly as possible; however, this paragraph does not include claims arising under state workers' compensation laws, state unemployment laws and any claims that arise after the signing of this Agreement. This paragraph also does not affect Executive's right to file a charge or otherwise participate in an EEOC proceeding insofar as it is required by current EEOC regulations. Executive understands that Employer will assert this Agreement as an affirmative defense against any claim asserted by Executive in any forum.

7. Non-Disclosure.    Executive shall not disclose the fact of this Agreement or any of its terms to any third parties other than Executive's spouse, tax advisors, accountants and attorneys or as otherwise required by law. Executive agrees that any violation of this non-disclosure paragraph will result in substantial and irreparable injury to Employer.

8. References.    In the event that Executive seeks a reference for employment purposes, Executive agrees to direct inquiries to Metaldyne's Human Resources Department. References to be provided by Employer regarding Executive shall be limited to dates of employment, positions held and compensation. Those making such inquiries will be advised that it is the general policy of Employer to provide only such neutral references in response to employment inquiries.

9. Consideration Time and Revocation Period.    Consistent with the ADEA, this Agreement was first given to Executive on July 15, 2003. Executive has twenty-one (21) calendar days during which to review and consider this offer. Executive is not required to, but may accept this Agreement by signing and returning the Agreement at any time prior to August 5, 2003. In the event Executive signs and returns the Agreement before that time, Executive certifies, by such execution, that he knowingly and voluntarily waives the right to the full twenty-one (21) days, for reasons personal to Executive, with no pressure by Employer to do so. Employer and Executive further agree that any changes, whether material or immaterial, to this Agreement do not restart the running of the twenty-one (21) day consideration period.

Executive understands that he may revoke this Agreement for a period of seven (7) calendar days following his execution of the Agreement. Executive understands that any revocation, in order to be effective, must be: (1) in writing and either postmarked within seven (7) days of the Executive's execution of the Agreement and addressed to General Counsel, Metaldyne Corporation, 47603 Halyard Drive, Plymouth, MI 48170-2429, or (2) hand-delivered within seven (7) days of Executive's execution of the Agreement to Metaldyne's General Counsel at the address listed above. If revocation is by mail, certified mail, return receipt requested is required to show proof of mailing.

10. No Payment.    No payments or benefits under this Agreement shall be made to Executive until after the seven (7) day revocation period has expired. If Executive does not revoke this Agreement within the seven (7) day revocation period, then this Agreement shall become fully and finally effective and the payments and benefits provided by the terms of Paragraph 1 will be made to Executive.

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11. Complete Agreement.    In executing this Agreement, Executive is doing so knowingly and voluntarily and agrees that he has not relied upon any oral statements by Employer or its representatives, and that this Agreement, when signed by both parties, supersedes any and all prior written agreements between the parties regarding the terms of Executive's employment or the termination of such employment, including, without limitation, the Employment Agreement (except to the extent that provisions of the Employment Agreement are specifically incorporated into this Agreement).

12. Severability.    Should any provision of this Agreement be declared or determined by any court to be illegal or invalid, the remaining parts, terms or provisions shall not be affected thereby, and said illegal or invalid part, term or provision shall be deemed not to be a part of this Agreement.

13. Choice of Law.    This Agreement shall be deemed to be made and entered into in the State of Michigan and shall in all respects be interpreted, enforced and governed under the laws of the State of Michigan and the United States.

Executive represents that he fully understands the terms of this Agreement and executes it knowingly and voluntarily; that no promise, inducement or agreement has been made to him other than those specifically set forth in this Agreement; that this Agreement, including the covenants incorporated by reference, contains the entire Agreement between the parties and may not be modified except by a subsequent written agreement, executed by both parties, which specifically evidences an intent to modify this Agreement; and that Executive has been advised to consult with legal counsel prior to executing this Agreement.

Witnessed:

/s/ Valerie Lyons				/s/ William M. Lowe, Jr.
				WILLIAM M. LOWE, JR.
August 1, 2003				August 1, 2003
DATE OF WITNESS' SIGNATURE				DATE OF EXECUTIVE'S SIGNATURE

METALDYNE CORPORATION (EMPLOYER)

BY:    /s/ Jim Strahley

ITS:    Vice President, Human Resources

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EX-12

Exhibit 12

METALDYNE CORPORATION
Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
(Dollars In thousands)

				9 Months Ended September 28				Year Ended December 29,				For the Years Ended December 31
				2003				2002				2001				11/28 – 12/31 2000				1/1 – 11/27 2000				1999				1998
EARNINGS (LOSS) BEFORE INCOME TAXES AND FIXED CHARGES:
Income (loss) from continuing operations before income taxes and cumulative effect of accounting change, net				$	(26,080	)		$	(63,890	)		$	(47,930	)		$	(42,600	)		$	156,670			$	139,470			$	144,520
(Deduct) add equity in undistributed earnings (loss) of less-than-fifty percent owned companies					1,580				1,410				(8,930	)			1,000				(14,210	)			(9,800	)			(8,530	)
Add interest on indebtedness, net					53,810				91,060				148,560				14,470				78,880				83,470				83,620
Add amortization of debt expense					1,540				4,770				11,620				550				4,490				2,740				3,250
Estimated interest factor for rentals					9,590				12,460				9,730				310				2,970				3,710				3,620
Earnings before income taxes and fixed charges				$	40,440			$	45,810			$	113,050			$	(26,270	)		$	228,800			$	219,590			$	226,480
FIXED CHARGES:
Interest on indebtedness, net				$	53,810			$	91,060			$	148,560			$	14,460			$	78,640			$	83,760			$	84,080
Amortization of debt expense					1,540				4,770				11,620				550				4,490				2,740				3,250
Estimated interest factor for rentals (d)					9,590				12,460				9,730				310				2,970				3,710				3,620
Total fixed charges					64,940				108,290				169,910				15,320				86,100				90,210				90,950
Preferred stock dividends (a)					9,660				12,970				9,750				650				—				—				—
Combined fixed charges and preferred stock dividends				$	74,600			$	121,260			$	179,660			$	15,970			$	86,100			$	90,210			$	90,950
Ratio of earnings to fixed charges					—	(b)			—	(b)			—	(b)			—	(b)			2.7				2.4				2.5
Ratio of earnings to combined fixed charges and preferred stock dividends					—	(c)			—	(c)			—	(c)			—	(c)			2.7				2.4				2.5

(a) Based on the Company's effective tax rate, represents the amount of income before provision for income taxes required to meet the preferred stock dividend requirements of the Company and its 50% owned companies.

(b) Results of operations for the nine months ended September 28, 2003, years ended December 29, 2002 and December 31, 2001 and the 34 days ended December 31, 2000 are inadequate to cover fixed charges by $24,500, $62,480, $56,860 and $41,590, respectively.

(c) Results of operations for the nine months ended September 28, 2003, years ended December 29, 2002 and December 31, 2001 and the 34 days ended December 31, 2000 are inadequate to cover fixed charges and preferred stock dividends by $34,160, $75,450, $66,610 and $42,240, respectively.

(d) Deemed to represent one-third of rental expense on operating leases.

EX-31.1

Exhibit 31.1

Certification
Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002
(Chapter 63, Title 18 U.S.C. Section 1350(A) And (B))

I, Timothy D. Leuliette, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Metaldyne Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and to the audit committee of the registrant's board of directors (or persons fulfilling the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 10, 2003				/s/ Timothy D. Leuliette
				Timothy D. Leuliette Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification
Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002
(Chapter 63, Title 18 U.S.C. Section 1350(A) And (B))

I, Jeffrey Stafeil, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Metaldyne Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons fulfilling the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 10, 2003				/s/ Jeffrey M. Stafeil
				Jeffrey M. Stafeil Executive Vice President and Chief Financial Officer (Chief Accounting Officer and Authorized Signatory)

EX-32.1

Exhibit 32.1

Certification
Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002
(Chapter 63, Title 18 U.S.C. Section 1350(A) And (B))

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. Section 1350(a) and (b)), the undersigned hereby certifies in his capacity as an officer of Metaldyne Corporation (the "Company") that the Quarterly Report of the Company on Form 10-Q for the period ended September 28, 2003 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company at the end of and for the periods covered by such Report.

Date: November 10, 2003				/s/ Timothy D. Leuliette Timothy D. Leuliette Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification
Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002
(Chapter 63, Title 18 U.S.C. Section 1350(A) And (B))

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. Section 1350(a) and (b)), the undersigned hereby certifies in his capacity as an officer of Metaldyne Corporation (the "Company") that the Quarterly Report of the Company on Form 10-Q for the period ended September 28, 2003 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company at the end of and for the periods covered by such Report.

Date: November 10, 2003				/s/ Jeffrey M. Stafeil Jeffrey M. Stafeil Executive Vice President and Chief Financial Officer (Chief Accounting Officer and Authorized Signatory)