10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

or

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                to                

Commission file number 1-6615

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

California (State or Other Jurisdiction of Incorporation or Organization)	95-2594729 (IRS Employer Identification No.)
7800 Woodley Avenue, Van Nuys, California (Address of Principal Executive Offices)	91406 (Zip Code)

Registrant’s Telephone Number, Including Area Code: (818) 781-4973

     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 o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES x NO o

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date.

Class of Common Stock	Shares Outstanding at April 30, 2004
$0.50 Par Value		26,630,641

TABLE OF CONTENTS

					Page
PART I	-	FINANCIAL INFORMATION
		Item 1	-	Financial Statements
				Consolidated Condensed Statements of Income		1
				Consolidated Condensed Balance Sheets		2
				Consolidated Condensed Statements of Cash Flow		3
				Consolidated Condensed Statement of Shareholders’ Equity		4
				Notes to Consolidated Condensed Financial Statements		4
		Item 2	-	Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
		Item 3	-	Quantitative and Qualitative Disclosures About Market Risk		15
		Item 4	-	Controls and Procedures		15
PART II	-	OTHER INFORMATION
		Item 2	-	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities		16
		Item 6	-	Exhibits and Reports on Form 8-K		16
		Signatures				17
Exhibit 10.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32

PART I – FINANCIAL INFORMATION

Item. 1 Financial Statements

Consolidated Condensed Statements of Income
(Thousands of dollars, except per share data)
(Unaudited)

	Three Months Ended March 31,
	2004			2003
NET SALES	$	234,191		$	211,492
Cost of sales		209,620			174,084
GROSS PROFIT		24,571			37,408
Selling, general and administrative expenses		5,882			5,785
INCOME FROM OPERATIONS		18,689			31,623
Equity in earnings of joint ventures		2,183			1,934
Interest income, net		591			912
Other income (expense), net		(598	)		(213	)
INCOME BEFORE INCOME TAXES		20,865			34,256
Income taxes		7,198			11,990
NET INCOME	$	13,667		$	22,266
EARNINGS PER SHARE – BASIC	$	0.51		$	0.84
EARNINGS PER SHARE – DILUTED	$	0.51		$	0.83
DIVIDENDS DECLARED PER SHARE	$	0.1375		$	0.125

See notes to consolidated condensed financial statements.

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Consolidated Condensed Balance Sheets
(Thousands of dollars, except per share data)

	March 31,			December 31,
	2004			2003
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	137,591		$	156,847
Short-term investments		5,072			—
Accounts receivable, net		173,259			147,579
Inventories, net		80,917			68,228
Deferred income taxes		3,616			3,616
Prepaid expenses		10,501			12,240
Total current assets		410,956			388,510
Property, plant and equipment, net		266,846			261,733
Investments		47,721			45,503
Other assets		8,676			7,459
Total assets	$	734,199		$	703,205
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	43,715		$	30,398
Accrued expenses		44,022			38,534
Income taxes payable		19,659			14,689
Total current liabilities		107,396			83,621
Long-term liabilities		15,304			15,024
Deferred income taxes		12,742			12,354
Commitments and contingent liabilities		—			—
Shareholders’ equity
Preferred stock, $25.00 par value
Authorized – 1,000,000 shares Issued – none		—			—
Common stock, $0.50 par value
Authorized – 100,000,000 shares Issued and outstanding – 26,667,041 shares (26,768,666 shares at December 31, 2003)		13,334			13,384
Additional paid-in-capital		24,882			28,431
Accumulated other comprehensive loss		(26,162	)		(26,311	)
Retained earnings		586,703			576,702
Total shareholders’ equity		598,757			592,206
Total liabilities and shareholders’ equity	$	734,199		$	703,205

See notes to consolidated condensed financial statements.

2

Consolidated Condensed Statements of Cash Flow
(Thousands of dollars)
(Unaudited)

	Three Months Ended March 31,
	2004			2003
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	8,343		$	26,870
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment		(15,198	)		(23,530	)
Purchases of marketable securities		(5,121	)		(26,165	)
Proceeds from sales of marketable securities		—			59,309
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		(20,319	)		9,614
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid		(3,681	)		(3,323	)
Repurchases of common stock		(3,652	)		(3,014	)
Stock options exercised		53			4,314
NET CASH (USED IN) FINANCING ACTIVITIES		(7,280	)		(2,023	)
Net (decrease) increase in cash and cash equivalents		(19,256	)		34,461
Cash and cash equivalents at the beginning of the period		156,847			96,145
Cash and cash equivalents at the end of the period	$	137,591		$	130,606

See notes to consolidated condensed financial statements.

3

Consolidated Condensed Statement of Shareholders’ Equity
(Thousands of dollars, except per share data)
(Unaudited)

	Common Stock									Accumulated
	Number of						Paid-In			Other Comprehensive			Retained
	Shares			Amount			Capital			Income (Loss)			Earnings			Total
BALANCE AT DECEMBER 31, 2003		26,768,666		$	13,384		$	28,431		$	(26,311	)	$	576,702		$	592,206
Comprehensive Income:
Net income		—			—			—			—			13,667			13,667
Other comprehensive income, net of tax:
Foreign currency translation adjustments		—			—			—			563			—			563
Unrealized gain (loss) on:
Forward foreign currency contracts		—			—			—			(569	)		—			(569	)
Marketable securities		—			—			—			253			—			253
Other intangible assets		—			—			—			(98	)					(98	)
Other comprehensive income		—			—			—			—			—			13,816
Stock options exercised, including related tax benefit		1,975			1			52			—			—			53
Repurchases of common stock		(103,600	)		(51	)		(3,601	)		—			—			(3,652	)
Cash dividends declared ($0.1375 per share)		—			—			—			—			(3,666	)		(3,666	)
BALANCE AT MARCH 31, 2004		26,667,041		$	13,334		$	24,882		$	(26,162	)	$	586,703		$	598,757

See notes to consolidated condensed financial statements.

Notes to Consolidated Condensed Financial Statements
March 31, 2004
(Unaudited)

Note 1 – Nature of Operations

Headquartered in Van Nuys, California, the principal business of Superior Industries International, Inc. (referred to herein as the “company” or in the first person notation “we”, “us” and “our”) is the design and manufacture of aluminum motor vehicle parts for sale to Original Equipment Manufactures (“OEM”) on an integrated one-segment basis. We are one of the largest suppliers of cast and forged aluminum wheels to the world’s leading automobile and light truck manufacturers, with wheel manufacturing operations in the United States, Mexico and Hungary. Customers in North America represent the principal market for our products, with approximately 10 percent of our products being exported to international customers or delivered to their assembly operations in the United States.

We are also building our position in the growing market for aluminum suspension and related underbody components to complement our OEM aluminum wheel business. We acquired a dedicated manufacturing facility in

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Heber Springs, Arkansas, in 1999 to accommodate our aluminum components manufacturing operations, which we expanded to accommodate the potential sales volume of the components business. We have won contracts that are expected to average $37 million in annual revenues for 2004 - 2006 to manufacture numerous suspension and underbody components, including upper and lower control arm bracket assemblies, suspension brackets and knuckles. The future success of this business is highly dependent on our ability to obtain additional contract awards, which in part, depends on industry conversion to the lighter aluminum components.

Ford and GM together represented approximately 85 percent of our annual sales in 2003 and 87 percent of annual sales in 2002. Although the loss of all or a substantial portion of our sales to either or both of these two customers would have a significant adverse impact on our financial results (unless the lost volume could be replaced), we believe this risk is offset by long-term relationships with both, including multi-year contractual arrangements. However, intense global competitive pricing pressure makes it increasingly more difficult to maintain these contractual arrangements. Although the ultimate outcome of these pricing pressures is not known at this time, we expect this trend to continue into the future. We also manufacture aluminum wheels for DaimlerChrysler, Audi, BMW, Isuzu, Jaguar, Land Rover, Mazda, MG Rover, Mitsubishi, Nissan, Subaru, Toyota and Volkswagen.

The availability and demand for aluminum wheels and components are both subject to unpredictable factors, such as changes in the general economy, the automobile industry, the price of gasoline and consumer interest rates. The raw materials used in producing our products are readily available and are obtained through numerous suppliers with whom we have established trade relations.

Note 2 – Presentation of Consolidated Condensed Financial Statements

During interim periods, we follow the accounting policies set forth in our 2003 Annual Report on Form 10-K and apply appropriate interim financial reporting standards for a fair presentation in conformity with accounting principles generally accepted in the United States of America, as indicated below. Users of financial information produced for interim periods in 2004 are encouraged to read this Form 10-Q in conjunction with our Management’s Discussion and Analysis of Financial Condition and Results of Operations, the consolidated financial statements and notes to consolidated financial statements filed with the Securities and Exchange Commission (“SEC”) in our 2003 Annual Report on Form 10-K.

Interim financial reporting standards require us to make estimates that are based on assumptions regarding the outcome of future events and circumstances not known at that time, including the use of estimated effective tax rates. Inevitably, some assumptions may not materialize, unanticipated events or circumstances may occur which vary from those estimates and such variations may significantly affect our future results.

In our opinion, the accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the SEC’s requirements of Form 10-Q and contain all adjustments, of a normal and recurring nature, which are necessary for a fair statement of i) the consolidated condensed statements of income for the three months ended March 31, 2004 and 2003, ii) the consolidated condensed balance sheets at March 31, 2004 and December 31, 2003, iii) the consolidated condensed statements of cash flows for the three months ended March 31, 2004 and 2003, and iv) the consolidated condensed statement of shareholders’ equity at March 31, 2004.

Note 3 — New Accounting Standards

In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. (“FIN”) 46, “Consolidation of Variable Interest Entities,” which was originally effective on July 1, 2003. In December 2003, the FASB deferred the effective date for applying the provisions of FIN 46 to March 31, 2004 for interests held by public companies in variable interest entities or potential variable interest entities created before February 1, 2003. We have completed our evaluation of the provisions of FIN 46 and we do not have any significant interests in variable interest entities. The adoption of this new accounting standard did not have a material effect on our consolidated financial statements.

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In April 2003, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. SFAS No. 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. The new guidance amends SFAS No. 133 for decisions made: (a) as part of the Derivatives Implementation Group process that effectively required amendments to SFAS No. 133, (b) in connection with other FASB projects dealing with financial instruments, and (c) regarding implementation issues raised in relation to the application of the definition of a derivative, particularly regarding the meaning of an “underlying” and the characteristics of a derivative that contains financing components. The amendments set forth in SFAS No. 149 improve financial reporting by requiring that contracts with comparable characteristics be accounted for similarly. SFAS No. 149 is generally effective for contracts entered into or modified after June 30, 2003 (with a few exceptions) and for hedging relationships designated after June 30, 2003. The guidance is to be applied prospectively. The adoption of this new accounting standard did not have a material effect on our consolidated financial statements.

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. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. This Statement is effective for financial instruments entered into or modified after November 5, 2003. The adoption of this new accounting standard did not have a material effect on our consolidated financial statements.

In December 2003, the FASB issued SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits”, an amendment of FASB Statements No. 87, 88, and 106, and a revision of FASB Statement No. 132. This Statement revises employers’ disclosures about pension plans and other postretirement benefit plans. It does not change the measurement or recognition of those plans required by FASB Statements No. 87, “Employers’ Accounting for Pensions”, No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits”, and No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”. The new rules require additional disclosures about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other postretirement benefit plans. The required information should be provided separately for pension plans and for other postretirement benefit plans. The new disclosures are generally effective for 2003 calendar year-end financial statements of public companies, with a delayed effective date for certain disclosures, for foreign plans, and for non-public entities. The adoption of this new accounting standard did not have a material effect on our consolidated financial statements.

Note 4 — Revenue Recognition

Sales of products and any related costs are recognized when title transfers to the purchaser, generally upon shipment. Project development revenues for wheel development and initial tooling that are reimbursed by our customers are recognized as such related costs and expenses are incurred and recoverability is probable, generally upon issuance of a customer purchase order.

Note 5 — Earnings Per Share

Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding for the period of 26,704,000 and 26,597,000 for the three months ended March 31, 2004 and 2003, respectively. For purposes of calculating diluted earnings per share, net income is divided by the total of the weighted average shares outstanding plus the dilutive effect of our outstanding stock options under the treasury stock method (“common stock equivalents”) of 274,000 and 361,000 for the three months ended March 31, 2004 and 2003, respectively. Accordingly, the total weighted average shares outstanding plus common stock equivalents used for calculating diluted earnings per share was 26,978,000 and 26,958,000 for the three months ended March 31, 2004 and 2003, respectively.

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Note 6 – Risk Management

We are subject to various risks and uncertainties in the ordinary course of business due, in part, to the competitive global nature of the industry in which we operate, to changing commodity prices for the materials used in the manufacture of our products, and to development of new products, such as our aluminum suspension and related underbody components.

We have foreign operations in Mexico and Hungary that, on occasion, require the transfer of funds denominated in their respective functional currencies — the Mexican Peso and the Euro. The value of the Mexican Peso experienced a 7 percent decrease in relation to the U.S. dollar in 2003, and the value of the Euro experienced a 19 percent increase versus the U.S. dollar.

Our primary risk exposure relating to derivative financial instruments results from the periodic use of foreign currency forward contracts to offset the impact of currency rate fluctuations with regard to foreign denominated receivables, payables or purchase obligations. At March 31, 2004, we held open foreign currency Euro forward contracts totaling $30.9 million, with an unrealized gain of $2.0 million. At December 31, 2003, we held open foreign currency Euro forward contracts totaling $20.8 million, with an unrealized gain of $2.9 million. Any unrealized gains and losses are included in other comprehensive income (loss) in shareholders’ equity until the actual contract settlement date. Percent changes in the Euro/U.S. Dollar exchange rate will impact the unrealized gains and losses by a similar percentage of the current market value.

When market conditions warrant, we will also enter into contracts to purchase certain commodities used in the manufacture of our products, such as aluminum, natural gas, environmental emission credits and other raw materials. Any such commodity commitments are expected to be purchased and used over a reasonable period of time in the normal course of business. Accordingly, pursuant to SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, they are not accounted for as a derivative. We currently have several purchase agreements for the delivery of natural gas and nickel over the next three years. The contract value and fair market value of these purchase commitments, principally natural gas, approximated $37 million and $41 million, respectively, at March 31, 2004. Percentage changes in the market prices of natural gas and nickel will impact the fair values by a similar percentage. We do not hold or purchase any natural gas or nickel forward contracts for trading purposes.

Note 7 – Financial Presentation

Certain prior year amounts have been reclassified to conform to the 2004 financial statement presentation.

Note 8 – Accounts Receivable
(Thousands of dollars)

	March 31,			December 31,
	2004			2003
	(Unaudited)
Trade receivables	$	158,674		$	128,566
Project development		9,717			12,599
Unrealized gain on forward foreign currency contracts		1,985			143
Due from joint ventures		813			2,874
Other receivables		2,629			3,956
		173,818			148,138
Allowance for doubtful accounts		(559	)		(559	)
	$	173,259		$	147,579

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Note 9 – Inventories
(Thousands of dollars)

	March 31,		December 31,
	2004		2003
	(Unaudited)
Raw materials	$	25,879	$	19,472
Work in process		18,429		15,768
Finished goods		36,609		32,988
	$	80,917	$	68,228

Inventories, which include material, labor and factory overhead, are stated at the lower of cost or market, using the first-in, first-out (FIFO) method of valuation.

Note 10 – Property, Plant and Equipment
(Thousands of dollars)

	March 31,			December 31,
	2004			2003
	(Unaudited)
Land and buildings	$	77,352		$	76,601
Machinery and equipment		443,299			437,771
Leasehold improvements and others		10,638			10,443
Construction in progress		35,830			29,632
		567,119			554,447
Accumulated depreciation		(300,273	)		(292,714	)
	$	266,846		$	261,733

Depreciation expense was $9.6 million and $7.5 million for the three months ended March 31, 2004 and March 31, 2003, respectively.

Note 11 – Retirement Plans

We have an unfunded supplemental executive retirement plan covering our directors, officers, and other key members of management. We purchase life insurance policies on each of the participants to provide for future liabilities. Subject to certain vesting requirements, the plan provides for a benefit based on the final average compensation, which becomes payable on the employee’s death or upon attaining age 65, if retired. As of March 31, 2004, approximately $117,000 of contributions have been made to this plan. We presently anticipate contributing a total of $480,000 to this retirement plan for 2004.

(Thousands of dollars)
(Unaudited)

	Three Months Ended March 31,
	2004		2003
Service cost	$	150	$	133
Interest cost		206		223
Net amortization		19		19
Net periodic pension cost	$	375	$	375

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Note 12 – Stock-Based Compensation

The company accounts for its stock option plans under the recognition and measurement principles (the “intrinsic value” method) of APB Opinion No. 25, “Accounting for Stock Issued to Employees”. If we had elected to recognize stock-based compensation expense based on the fair value of options granted as prescribed by SFAS No. 123, “Accounting for Stock-Based Compensation”, net income and earnings per share would have been reduced to the proforma amounts indicated below.

(Thousands of dollars, except earnings per share data)
(Unaudited)

	Three Months Ended March 31,
	2004			2003
Reported net income	$	13,667		$	22,266
Stock-based compensation expense included in reported net income, net of tax		—			—
Stock-based compensation expense determined under fair value method for all awards, net of tax		(711	)		(530	)
Proforma net income	$	12,956		$	21,736
Earnings per share:
Basic – as reported	$	0.51		$	0.84
Basic – proforma	$	0.49		$	0.82
Diluted – as reported	$	0.51		$	0.83
Diluted – proforma	$	0.48		$	0.81

Note 13 – Contingencies

We are party to various legal and environmental proceedings incidental to our business. Certain claims, suits and complaints arising in the ordinary course of business have been filed or are pending against us. Based on facts now known, we believe all such matters are adequately provided for, covered by insurance, are without merit, and/or involve such amounts that would not materially adversely affect our consolidated results of operations, cash flows or financial position.

For additional information concerning contingencies, risks and uncertainties, please see Note 6 – “Risk Management”.

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

Results of Operations
(Thousands of dollars, except for share amounts)
(Unaudited)

Selected data for the three months ended March 31,	2004			2003
Net sales	$	234,191		$	211,492
Gross profit		24,571			37,408
Percentage of net sales		10.5	%		17.7	%
Operating income	$	18,689		$	31,623
Percentage of net sales		8.0	%		15.0	%
Net income	$	13,667		$	22,266
Percentage of net sales		5.8	%		10.5	%
Diluted earnings per share	$	0.51		$	0.83

In the first quarter of 2004, we set new first quarter records for unit shipments and net sales. Wheel sales, excluding project development revenues, increased $22.1 million, or 10.9 percent, to $224.5 million from $202.3 million in the first quarter a year ago, as wheel shipments increased by 10.2 percent and the average selling price was virtually unchanged from a year ago. Although the average selling price was virtually unchanged compared to a year ago, the pass-through price of aluminum increased the average selling price by three percent and price discounts to our customers decreased the average selling price by a similar percentage. Likewise, an increase in the average selling price caused by the continuing shift in mix to larger wheels offset a similar decrease caused by the reduced demand in the current period for chrome plated and polished specialty wheels. The balance of our net sales is represented by suspension component revenues of $6.0 million in 2004, compared to $3.5 million a year ago.

The 10.2 percent increase in aluminum wheel shipments for the first quarter compares favorably to a 4.9 percent decrease in the total North American production of light trucks and passenger cars for the first quarter 2004, according to Automotive News, an industry publication, indicating further market share gains. According to the latest annual data available in another auto industry publication, Ward’s Automotive Yearbook 2002, aluminum wheel installation rates on model year 2002 light trucks and passenger cars in the U.S. rose to 61 percent from 57 percent for the model year 2001. Shipments to Ford Motor Company and General Motors Corporation totaled 84.2 percent of total OEM unit shipments in the current quarter, compared to 85.9 percent a year ago. The balance of our 2004 unit shipments to our international customers and to DaimlerChrysler were 9.4 percent and 6.4 percent, respectively, compared to 8.4 percent and 5.7 percent, respectively, in 2003.

Consolidated gross profit decreased $12.8 million for the quarter to $24.6 million, or 10.5 percent of net sales, compared to $37.4 million, or 17.7 percent of net sales, for the same period a year ago. The principal factors impacting our gross profit were continued global pricing pressures from our customers, decreases in demand for high-volume, high-profit specialty wheels and additional development expenses related to new wheel and suspension component opportunities. Gross profit was also impacted by continued operating issues and inefficiencies at several of our recently expanded wheel plants, and by the operating loss of the aluminum suspension component business, which increased by $0.4 million to $1.8 million in the current quarter.

Pricing pressures have intensified as suppliers in Asia, Eastern Europe and other areas of the world enter the market and competitors become more aggressive in their efforts to fill available plant capacity. While we have ongoing programs to reduce costs through process automation and identification of industry best practices and, in the past, have been successful in substantially mitigating these pricing pressures, it is becoming increasingly difficult to do so without impacting our operating margins. In order to increase our operating margins from our current operating levels, we will continue to aggressively implement cost savings strategies to meet customer pricing expectations and industry-wide competition. However, the impact of these strategies on our future financial position and results of operations will initially be negative, the extent of which cannot be predicted, and we may not be able to implement sufficient cost savings strategies to return to our historical operating margins.

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Selling, general and administrative expenses for the first quarter of 2004 were $5.9 million, or 2.5 percent of net sales, compared to $5.8 million in 2003, or 2.7 percent of net sales.

The resulting consolidated operating income for the first quarter decreased $12.9 million, or 40.9 percent, to $18.7 million from $31.6 million in the same period a year ago. Accordingly, the operating income margin for the first quarter of 2004 was 8.0 percent of net sales compared to 15.0 percent of net sales for the same period in 2003.

Equity earnings of joint ventures is represented principally by our share of the equity earnings of our 50 percent owned joint venture in Hungary, or $2.2 million in the first quarter of 2004 compared to $1.9 million in 2003. The improvement in profitability was due principally to an increase in the foreign exchange rate of the Euro to the U.S. dollar in the current period. Interest income for the first quarter decreased to $0.6 million from $0.9 million a year ago, due primarily to a decrease in the average interest rate on cash invested.

The effective tax rate decreased to 34.5 percent in the first quarter 2004 from 35.0 percent in 2003, due principally to a more favorable relationship of projected federal and other tax credits to the projected lower pretax income in 2004.

As a result of the above, net income for the quarter decreased 38.6 percent, or $8.6 million, to $13.7 million, or 5.8 percent of net sales, from $22.3 million, or 10.5 percent of net sales last year. Diluted earnings per share for the first quarter of 2004 was $0.51, a decrease of 38.6 percent from the $0.83 per diluted share in the same period a year ago.

Financial Condition, Liquidity and Capital Resources

Net cash provided by operating activities decreased $18.6 million to $8.3 million for the three months ended March 31, 2004, compared to $26.9 million for the same period a year ago, due principally to the $8.6 million decrease in net income, and the net unfavorable change in working capital requirements of $14.0 million, offsetting a net favorable change in non-cash items of $4.1 million. The change in working capital requirements was due principally to increases in accounts receivable and inventories of $7.3 million and $11.4 million, respectively, offsetting an increase in accounts payable of $5.4 million. The working capital requirements in the current quarter were higher than in the same period a year ago, due to increased sales and estimated customer releases for the subsequent period.

The principal investing activities during the three months ended March 31, 2004 were funding $15.2 million of capital expenditures and acquiring $5.1 million in short-term investments. Similar investing activities during the same period a year ago included funding $23.5 million of capital expenditures and acquiring $26.2 million of short-term investments, which were offset by the $59.3 million in proceeds from the sale of short-term investments. Of the $8.3 million decrease in capital expenditures, $7.1 million was due to the completed expansion of three of our wheel facilities in late 2003 and $6.8 million was for additional equipment in our second wheel plant in Chihuahua, Mexico, purchased in 2003, all of which offset $5.6 million in additional equipment for our aluminum components business and ongoing improvements to our other facilities.

Financing activities during the three months ended March 31, 2004 included the payment of cash dividends on our common stock totaling $3.7 million and the purchase of company common stock for $3.7 million. Similar financing activities during the same period a year ago were cash dividend payments of $3.3 million and purchases of our common stock of $3.0 million, which offset the $4.3 million in proceeds from the exercise of company stock options.

Working capital and the current ratio were $303.6 million and 3.8:1 versus $304.9 million and 4.6:1 at March 31, 2004 and December 31, 2003, respectively. Cash and short-term investments as of March 31, 2004 were $142.7 million compared to $156.8 million at December 31, 2003. Our cash position is forecasted to be more than sufficient to fund our working capital and capital investment requirements for the foreseeable future.

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Critical Accounting Policies

We identified the most critical accounting policies upon which our financial position, results of operations and cash flows depend, as being those policies that involve the most complex or subjective decisions or assessments used in the preparation of our financial statements. These accounting policies, which are related to risk management, revenue recognition, asset valuation and income taxes, are stated in our 2003 Annual Report on Form 10-K filed with the SEC. Users of financial information produced for interim periods in 2004 are encouraged to read this Form 10-Q in conjunction with our Management’s Discussion and Analysis of Financial Condition and Results of Operations, the consolidated financial statements and notes to consolidated financial statements included in our 2003 Annual Report on Form 10-K.

New Accounting Standards

In January 2003, the FASB issued FASB Interpretation No. (“FIN”) 46, “Consolidation of Variable Interest Entities,” which was originally effective on July 1, 2003. In December 2003, the FASB deferred the effective date for applying the provisions of FIN 46 to March 31, 2004 for interests held by public companies in variable interest entities or potential variable interest entities created before February 1, 2003. We have completed our evaluation of the provisions of FIN 46 and we do not have any significant interests in variable interest entities. The adoption of this new accounting standard did not have a material effect on our consolidated financial statements.

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. SFAS No. 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. The new guidance amends SFAS No. 133 for decisions made: (a) as part of the Derivatives Implementation Group process that effectively required amendments to SFAS No. 133, (b) in connection with other FASB projects dealing with financial instruments, and (c) regarding implementation issues raised in relation to the application of the definition of a derivative, particularly regarding the meaning of an “underlying” and the characteristics of a derivative that contains financing components. The amendments set forth in SFAS No. 149 improve financial reporting by requiring that contracts with comparable characteristics be accounted for similarly. SFAS No. 149 is generally effective for contracts entered into or modified after June 30, 2003 (with a few exceptions) and for hedging relationships designated after June 30, 2003. The guidance is to be applied prospectively. The adoption of this new accounting standard did not have a material effect on our consolidated financial statements.

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. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. This Statement is effective for financial instruments entered into or modified after November 5, 2003. The adoption of this new accounting standard did not have a material effect on our consolidated financial statements.

In December 2003, the FASB issued SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits”, an amendment of FASB Statements No. 87, 88, and 106, and a revision of FASB Statement No. 132. This Statement revises employers’ disclosures about pension plans and other postretirement benefit plans. It does not change the measurement or recognition of those plans required by FASB Statements No. 87, “Employers’ Accounting for Pensions”, No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits”, and No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”. The new rules require additional disclosures about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other postretirement benefit plans. The required information should be provided separately for pension plans and for other postretirement benefit plans. The new disclosures are generally effective for 2003 calendar year-end financial statements of public companies, with a delayed effective date for certain disclosures, for foreign plans, and for non-public entities. The adoption of this new accounting standard did not have a material effect on our consolidated financial statements.

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Risk Management

We are subject to various risks and uncertainties in the ordinary course of business due, in part, to the competitive global nature of the industry in which we operate, to changing commodity prices for the materials used in the manufacture of our products, and to development of new products, such as our aluminum suspension and related underbody components.

We have foreign operations in Mexico and Hungary that, on occasion, require the transfer of funds denominated in their respective functional currencies — the Mexican Peso and the Euro. The value of the Mexican Peso experienced a 7 percent decrease in relation to the U.S. dollar in 2003, and the value of the Euro experienced a 19 percent increase versus the U.S. dollar.

Our primary risk exposure relating to derivative financial instruments results from the periodic use of foreign currency forward contracts to offset the impact of currency rate fluctuations with regard to foreign denominated receivables, payables or purchase obligations. At March 31, 2004, we held open foreign currency Euro forward contracts totaling $30.9 million, with an unrealized gain of $2.0 million. At December 31, 2003, we held open foreign currency Euro forward contracts totaling $20.8 million, with an unrealized gain of $2.9 million. Any unrealized gains and losses are included in other comprehensive income (loss) in shareholders’ equity until the actual contract settlement date. Percent changes in the Euro/U.S. Dollar exchange rate will impact the unrealized gains and losses by a similar percentage of the current market value.

When market conditions warrant, we will also enter into contracts to purchase certain commodities used in the manufacture of our products, such as aluminum, natural gas, environmental emission credits and other raw materials. Any such commodity commitments are expected to be purchased and used over a reasonable period of time in the normal course of business. Accordingly, pursuant to SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, they are not accounted for as a derivative. We currently have several purchase agreements for the delivery of natural gas and nickel over the next three years. The contract value and fair market value of these purchase commitments, principally natural gas, approximated $37 million and $41 million, respectively, at March 31, 2004. Percentage changes in the market prices of natural gas and nickel will impact the fair values by a similar percentage. We do not hold or purchase any natural gas or nickel forward contracts for trading purposes.

Inflation

Inflation did not have a material impact on our results of operations or financial condition for the first quarter of 2004.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf. We may from time to time make written or oral statements that are “forward-looking” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934 (“Exchange Act”), as amended, including statements contained in this report and other filings with the SEC and reports and other public statements to our shareholders. These statements may, for example, express expectations or projections about future actions or results that we may anticipate but, due to developments beyond our control, do not materialize. Actual results could differ materially because of issues and uncertainties such as those listed below, which, among others, should be considered in evaluating our financial outlook. We assume no obligation to update publicly any forward-looking statements.

• Global Pricing. We continue to experience increased competition in our domestic and international markets. In addition, due to the fact that some initial wheels are being shipped to the U.S. from Asia, many of our competitors have excess capacity and, because of their financial condition, are placing intense pricing pressure in our market place. These competitive pressures are expected to continue and may result

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	in decreased sales volumes and further unit price reductions, resulting in lower revenues, gross profit and operating income.
•	Future Capacity Expansions. Our plans to add capacity through the addition of new plant locations or by expanding our current plants may cause unexpected operating issues and inefficiencies that will negatively impact our operating margins. Certain factors are beyond our control, such as construction and equipment delivery delays, due to inclement weather conditions, vendor production problems, and other unforeseen circumstances. These types of circumstances may cause us to reallocate the manufacture of our products to other plants in order to meet our customers’ requirements, which may cause additional inefficiencies.
•	Multi-Year Supply Agreements with Key Customers. Ford and GM were our only customers accounting for more than 10 percent of consolidated net sales in 2003. GM and Ford together represented approximately 85 percent of our annual sales in 2003 and 87 percent of total sales in 2002. The loss of all or a substantial portion of our sales to either or both of these two customers would have a significant adverse impact on our financial results (unless the lost volume could be replaced). However, we believe this risk is offset in short-term periods due to long-term relationships with both, including multi-year supply arrangements. In addition, these arrangements, which are for more than 175 different wheel programs, as of December 31, 2003, with various divisions of these two customers, expire on differing dates.
•	Decline in Production of Passenger Cars and Light Trucks. A significant decline in the production of passenger cars and/or light trucks by automobile manufacturers would adversely affect our revenue and if such decline continues for a sustained period, would have a significant adverse impact on our financial results.
•	New Component Products. We have made a significant investment in research, development and marketing for the automotive suspension and underbody components business. Significant revenues from these investments may not be achieved for a number of years, if at all. The future success of this business is highly dependent on our ability to obtain additional contract awards, which in part depends on industry conversion to lighter aluminum components.
•	Litigation. We are subject to a variety of claims and lawsuits, including product liability and other matters. While we believe that none of the litigation matters in which we are currently involved will have a material impact on our financial position or results of operations, due to the inherent uncertainty of litigation, one or more of these matters could be resolved in a manner that would ultimately have a material impact on our financial condition, and could negatively impact our revenues, operating margins and net income.
•	International Operations. We manufacture our products in Mexico and Hungary and sell our products throughout the world. Unfavorable changes in foreign cost structures, trade protection laws, policies and other regulatory requirements affecting trade and investments, social, political, labor, or economic conditions in a specific country or region, including foreign exchange rates, difficulties in staffing and managing foreign operations and foreign tax consequences, among other factors, could have a negative effect on our business and results of operations.
•	Other. Other issues and uncertainties include:

• Changes in U.S., global or regional economic conditions, currency exchange rates, war or significant terrorist acts, or political instability in major markets, all of which may affect automobile sales, which in turn could cause our customers to cancel orders, as has happened in the past;

• Periodic or sustained shortages of natural gas and other energy sources that may impact our performance and profitability;

• Changes in commodity prices of the materials used in our products, or substantial increases in material costs that may impact the demand for aluminum wheels;

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• Changes in the laws, regulations, policies, or other activities of governments, agencies, and similar organizations where such actions may affect our ability to produce products at a competitive price;

• Adverse weather conditions or natural disasters, such as earthquakes, tornadoes and hurricanes, which may, among other things, impair production at our manufacturing facilities;

• Our ability to attract or retain key employees to operate our manufacturing facilities and corporate office;

• Success of our strategic and operating plans to properly direct the company, including obtaining new contracts for our suspension and underbody components business; and,

• International, political and military developments that may affect automobile production and sales.

This list of factors that may affect future performance and the accuracy of forward-looking statements is by no means complete. Additional factors that may affect future performance and the accuracy of forward-looking statements are contained in this Quarterly Report on Form 10-Q and other reports filed with the SEC. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

See Item 2. Managements’ Discussion and Analysis of Financial Condition and Results of Operations – “Risk Management”.

Item 4. Controls and Procedures

The company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2004. Based on this evaluation, the CEO and CFO concluded that, as of March 31, 2004, the company’s disclosure controls and procedures were: (1) designed to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to the CEO and CFO by others within those entities, particularly during the period in which this report was being prepared and (2) effective, in that they provide reasonable assurance that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

No change in the company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended March 31, 2004 that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

The company’s management, including the CEO and CFO, does not expect that its disclosure controls and procedures or internal controls over financial reporting will prevent all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II – OTHER INFORMATION

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

On March 17, 2000, the Board of Directors authorized the repurchase of 4,000,000 shares of the company’s common stock as part of the 2000 Stock Repurchase Plan. Below is a table of stock repurchases during the first quarter of 2004 under the 2000 Stock Repurchase Plan:

							Cumulative		Number
			Total Number		Average		Number of		of Shares
			of Shares		Price Paid		Shares		Remaining
Period			Purchased		per Share		Purchased		To Purchase
December 29th	-	January 25th		—	$	—		598,705		3,401,295
January 26th	-	February 22nd		49,000	$	35.53		647,705		3,352,295
February 23rd	-	March 28th		54,600	$	35.00		702,305		3,297,695
Total				103,600	$	35.25		702,305		3,297,695

Item 6. Exhibits and Reports on Form 8-K

a) Exhibits:

10.1	Employment Agreement dated January 1, 2004 between Steven J. Borick and the Registrant.
31.1	Certification of Louis L. Borick, Chief Executive Officer and Chairman of the Board, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
31.2	Certification of R. Jeffery Ornstein, Vice President and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
32	Certifications of Louis L. Borick, Chief Executive Officer and Chairman of the Board, and R. Jeffery Ornstein, Vice President and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b)	Reports on Form 8-K:
	The company filed a Current Report on Form 8-K on February 13, 2004 that included:

• A press release issued on February 6, 2004, announcing the company’s financial results for the fiscal quarter and year ended December 31, 2003; and

• A transcript of the company’s earnings conference call held on February 6, 2004, regarding its financial results of operations for the fiscal quarter and year ended December 31, 2003.

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SIGNATURES

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.

SUPERIOR INDUSTRIES INTERNATIONAL, INC.
(Registrant)

Date May 7, 2004	/s/ Louis L. Borick
	Louis L. Borick
	Chairman of the Board and Chief Executive Officer

Date May 7, 2004	/s/ R. Jeffrey Ornstein
	R. Jeffrey Ornstein
	Vice President and Chief Financial Officer

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EX-10.1

                                                          EXHIBIT 10.1

      This Executive Employment Agreement ("AGREEMENT"), dated January 1, 2004
is between Superior Industries International, Inc. ("COMPANY") and Steven J.
Borick ("EMPLOYEE").

                                    RECITALS

      Company is formed to engage primarily in the automobile parts
manufacturing business. Employee has experience in this business and possesses
valuable skills and experience that will be used in advancing Company's
interests. Employee is willing to be engaged by Company and Company is willing
to engage Employee in the capacity of President and Chief Operating Officer of
Company ("PRESIDENT"), upon the terms and conditions set forth in this
Agreement. Capitalized terms used herein without definition shall have the
meanings ascribed to them in this agreement.

                                    AGREEMENT

      Employee and Company, intending to be legally bound, agree as follows:

1. SERVICES

1.1.  GENERAL SERVICES.

      1.1.1. Company shall engage Employee as its President, reporting to the
      Chief Executive Officer. As of the Commencement Date, Employee shall
      perform the duties customarily performed by one holding such position in a
      similar business as that engaged in by Company, as determined by the Board
      in its sole and absolute discretion, and shall serve as a member of the
      Board so long as he is employed as President of Company. Employee's duties
      may change from time to time on reasonable notice, based on the needs of
      Company and Employee's skills as determined by Company. (The duties to be
      performed by Employee to Company and its affiliates shall hereinafter be
      referred to as the "Services").

      1.1.2. Employee shall devote his entire working time, attention, and
      energies to the business of Company, and shall not, during the Term (as
      defined below), be engaged in any other business activity whether or not
      such business activity is pursued for gain, profit or other pecuniary
      advantage, without the prior written consent of the Board. The foregoing
      is not intended to restrict Employee's ability to enter into passive
      investments that do not compete in any way with Company's business.

1.2.  LOCATION. Employee shall be based at the company's corporate headquarters.
      Employee shall undertake such travel as is necessary or advisable for the
      effective performance of the duties of the position. Employee's office
      initially will be based in California or such other location in Los
      Angeles County as Company may designate.

1.3.  BEST ABILITIES. Employee shall serve Company faithfully and to the best of
      his ability and shall use his best abilities to perform the Services.
      Employee shall act at all times according to what is reasonably believed
      to be in the best interests of Company.

1.4.  COMPANY AUTHORITY. As an officer of Company, Employee shall, with the
      assistance of consultants, professionals, and other employees of Company,
      comply with all laws, rules and regulations applicable to Employee as a
      result of this Agreement. In complying with the Laws, Employee may after
      reasonable investigation and in good faith rely upon advice given to
      Employee or to the Board by Company's legal counsel and other consultants
      or employees Company engages in connection with compliance with the Laws;
      provided, however, that Employee may rely only upon advice that is within
      the scope of the profession or expertise of the person providing such
      advice. Prior to the execution of this Agreement, Employee has received
      and reviewed Company's Policies and Procedures and Company's Employee
      Handbook. Employee shall comply with Company's Policies and Procedures (as
      they may be amended

      from time to time), as well as practices now in effect or as later amended
      or adopted by Company, as required of similarly situated employees at
      Company.

2. TERM.

2.1.  The term (the "Term") of this Agreement shall be effective as of the date
      hereof (the "Effective Date") and shall govern Employee's employment from
      and after such date through and including December 31, 2008. This
      Agreement shall automatically renew for an additional one (1) year period
      thereafter unless either party provides written notice at least six (6)
      months in advance of terminating the Agreement, or until as provided in
      Section 4 of this Agreement.

2.2.  COMPENSATION AND BENEFITS

2.3.  COMPENSATION. Employee's total compensation consists of base salary,
      variable compensation (as further identified in this Agreement), and
      medical and other benefits generally provided to similarly situated
      employees of Company. Any compensation paid to Employee shall be pursuant
      to Company's policies and practices for exempt employees and shall be
      subject to all applicable laws and requirements regarding the withholding
      of federal, state and/or local taxes. Compensation provided in this
      Agreement is full payment for the Services and Employee shall receive no
      additional compensation for extraordinary services unless otherwise
      authorized in writing by the Board.

      2.3.1. Base Compensation. During the Term, Company agrees to pay Employee
      an annual base salary of $650,000.00, less applicable withholdings,
      payable in equal installments no less frequently than semi-monthly. In no
      event shall Employee's base compensation be less than $650,000.00 per
      year. Commencing on the first anniversary of the Effective Date and on
      each anniversary thereafter, the Board may, at the recommendation of the
      CEO, at its sole discretion adjust the base compensation to take into
      account Employee's performance and the performance of Company in general;
      however, the Board shall have no obligation to do so.

      2.3.2. Variable Compensation. Employee shall be eligible for variable
      compensation, subject to applicable withholdings and subject to approval
      by the Board and the Company's Compensation Committee, and shall be set
      forth in a separate agreement.

2.4.  BUSINESS EXPENSES Company shall reimburse Employee for business expenses
      reasonably incurred in performing the Services according to Company's
      Expense Reimbursement Policy.

2.5.  ADDITIONAL BENEFITS. Company shall provide Employee those additional
      benefits normally granted by Company to similarly situated employees
      subject to eligibility requirements applicable to each benefit. Company
      has no obligation to provide any other benefits unless provided for in
      this Agreement. As of the Commencement Date, Company intends to provide
      major medical and dental benefits, holidays, and a 401K Plan. To the
      extent that Company offers life or disability insurance to other executive
      officers of Company and to the extent Employee is otherwise eligible for
      coverage there under without a material adverse impact on the ability of
      Company to offer such benefits generally, Company shall make those same
      benefits available to Employee. Company reserves the right to modify,
      suspend, or discontinue any and all of the above benefit plans, policies,
      and practices at any time without notice to or recourse by Employee so
      long as such action is taken generally with respect to other similarly
      situated persons and does not single out Employee.

2.6   USE OF AUTOMOBILE. The Company shall provide Employee with a reasonable
      car allowance on a monthly basis intended to cover all operating expenses
      of the automobile and adequate automobile insurance with reasonable policy
      limits.

2.7   PAID TIME OFF. Employee shall be entitled to up to fifteen (15) paid days
      off per calendar year.

3.    TERMINATION

      3.1   CIRCUMSTANCES OF TERMINATION. This Agreement and the relationship
            between Company and Employee may be terminated prior to the
            expiration of the Term only as follows:

            3.1.1 Death. This Agreement shall terminate upon Employee's death,
                  effective as of the date of Employee's death.

            3.1.2 Disability. Company may, at its sole discretion, either
                  suspend compensation payments due under Section 3.1 or
                  terminate this Agreement due to Employee's Disability. For
                  purposes of this Agreement, "Disability" shall mean
                  circumstances in which Employee is incapable of performing the
                  Services, after Company has made or attempted to provide
                  reasonable accommodations to Employee as required by
                  applicable law, because of accident, injury, or physical or
                  mental illness for sixty (60) consecutive days, or is unable
                  or shall have failed to perform the Services for a total
                  period of ninety (90) days, regardless of whether such days
                  are consecutive. If Company suspends compensation payments
                  because of Employee's Disability; Company shall resume
                  compensation payments when Employee resumes performance of the
                  Services. If Company elects to terminate this Agreement due to
                  Employee's Disability; it will give Employee not more than
                  thirty (30) days advance written notice.

            3.1.3 Discontinuance Of Business. If Company discontinues operating
                  its business in any substantial respect, then this Agreement
                  shall terminate as of the last day of the month on which
                  Company ceases such operations with the same effect as if that
                  last date were originally established as the termination date
                  of this Agreement.

            3.1.4 For Cause. Company may terminate this Agreement without
                  advance notice for Cause, as determined at the sole discretion
                  of the Board. For the purpose of this Agreement, "Cause" shall
                  mean, as determined by Company in its sole discretion: any
                  failure to comply in any material respect with this Agreement
                  or any agreement incorporated herein; personal or professional
                  misconduct by Employee (including, but not limited to,
                  criminal activity or gross or willful neglect of duty); breach
                  of Employee's fiduciary duty to Company and/or any
                  subsidiaries, affiliates or successors of Company; conduct
                  that threatens public health or safety, threatens Company's
                  ability to manufacture automobile parts, or threatens to do
                  immediate or substantial harm to Company's business or
                  reputation; or any other misconduct, deficiency, failure of
                  performance, breach or default. To the extent that a breach
                  pursuant to this Section 3.1.4 is, in Company's sole
                  discretion, reasonably capable of being cured by Employee
                  without harm to Company or its reputation, Company shall,
                  instead of immediately terminating Employee pursuant to this
                  Agreement, provide Employee with notice of such breach,
                  specifying the actions required to cure such breach, and
                  Employee shall have thirty (30) days to cure such breach by
                  performing the actions so specified. If Employee fails to cure
                  such breach to the Company's satisfaction within the thirty
                  (30) day period, Company may terminate this Agreement without
                  further notice. Company's exercise of its right to terminate
                  under this Section shall be without prejudice to any other
                  remedy to which Company may be entitled at law, in equity, or
                  under this Agreement.

            3.1.5 Without Cause. This Agreement may be terminated without Cause
                  at any time by the Company upon thirty (30) days advanced
                  written notice to Employee.

            3.1.6 Voluntary Termination. This Agreement may be terminated for
                  any reason at any time by Employee upon thirty (30) days
                  advanced written notice to the Company.

            3.1.7 Change in Control. For purposes of this Plan, a "Change in
                  Control" of the Company shall be deemed to have occurred if:

                  3.1.7.1.1 Any "person" as such term is used in Sections 13(d)
                  and 14(d) of the Securities Exchange Act of 1934, as amended
                  (the "Exchange Act") is or becomes the "beneficial owner" (as
                  defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly, of securities of the Company representing 30% or
                  more of the combined voting power of the Company's then
                  outstanding

                  securities.

                  3.1.7.1.2 The stockholders of the Company approve a merger or
                  consolidation of the Company with any other corporation, other
                  than (i) a merger or consolidation that would result in the
                  voting securities of the Company outstanding immediately prior
                  thereto continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the surviving entity) more than 50% of the combined voting
                  power of the voting securities of the Company or such
                  surviving entity outstanding immediately after such merger or
                  consolidation or (ii) a merger or consolidation effected to
                  implement a re-capitalization of the Company (or similar
                  transaction) in which no "person" (as hereinabove described)
                  acquires more than 50% of the combined voting power of the
                  Company's then outstanding securities; or

                  3.1.7.1.3 The stockholders of the Company approve a plan of
                  complete liquidation of the Company or an agreement for the
                  sale or disposition by the Company of all or substantially all
                  of the Company's assets.

            3.1.8 ACTIVATION EVENT. For purpose of this Plan, the term
                  "Activation Event" shall mean an involuntary termination of
                  employment with the Company within one (1) year after a Change
                  in Control. "Involuntary termination" shall mean:


                  3.1.8.1.1 without the Employee's express written consent the
                  significant reduction of the Employee's duties, authority or
                  responsibilities, relative to the Employee's duties, authority
                  or responsibilities as in effect immediately prior to such
                  reduction, or the assignment to Employee of such reduced
                  duties, authority, or responsibilities;

                  3.1.8.1.2 without the Employees' express written consent, a
                  substantial reduction, without good business reasons, of the
                  facilities and perquisites (including office space and
                  location) available to the Employee immediately prior to such
                  reduction;

                  3.1.8.1.3 a reduction by the Company in the base salary and/or
                  incentive compensation opportunity of the employee as in
                  effect immediately prior to such reduction;

                  3.1.8.1.4 a material reduction by the Company in the kind or
                  level of employee benefits, to which the Employee was entitled
                  immediately prior to such reduction with the result that the
                  employee's overall benefits package is significantly reduced;

                  3.1.8.1.5 the relocation of the Employee to a facility or a
                  location more than 50 miles from the employee's then present
                  location, without the Employee's express written consent;

                  3.1.8.1.6 any purported termination of the employee by the
                  Company that is not effected for disability or for just cause,
                  or any purported termination for which the grounds relied upon
                  are not valid;

                  3.1.8.1.7 the failure of the Company to obtain the assumption
                  of this Plan by any successors contemplated by the
                  Change-in-Control agreement or transaction; or

                  3.1.8.1.8 any act or set of facts or circumstances, that
                  would, violate California case law.

      3.2   EMPLOYEE'S RIGHTS UPON TERMINATION.

            3.2.1 Expiration of Term. Upon termination of this Agreement by
                  expiration of the Term set forth in Section 2 above, Company
                  shall have no further obligation to Employee under this
                  Agreement or otherwise except to pay to Employee (a) any
                  accrued and unpaid base compensation and variable compensation
                  (less applicable withholdings) and (b) reimbursement of any
                  unpaid reimbursable

                  expenses, owed to Employee prior to the expiration of the
                  Term.

            3.2.2 Death or Disability. Upon termination of this Agreement
                  because of death or Disability of Employee pursuant to
                  Sections 3.1.1 or 3.1.2 above, Company shall have no further
                  obligation to Employee under this Agreement or otherwise
                  except to pay to Employee's estate or designated beneficiary
                  (a) any accrued and unpaid base compensation and variable
                  compensation pro rated to the date of termination (less
                  applicable withholdings) and (b) reimbursement of any unpaid
                  reimbursable expenses, owed to Employee prior to the date of
                  Employee's death or termination due to Disability

            3.2.3 Discontinuance Of Business. Upon termination of this Agreement
                  because of discontinuation of Company's business pursuant to
                  Section 3.1.3, Company shall have no further obligation to
                  Employee under this Agreement or otherwise except to pay to
                  Employee (a) any unpaid base compensation (less applicable
                  withholdings) and (b) reimbursement of any unpaid reimbursable
                  expenses, owed to Employee prior to the date of termination of
                  this Agreement.

            3.2.4 Termination With Cause. Upon termination of Employee's
                  employment for Cause pursuant to Section 3.1.4, Company shall
                  have no further obligation to Employee under this Agreement or
                  otherwise except to pay to Employee (a) any unpaid base
                  compensation (less applicable withholdings) and (b)
                  reimbursement of any unpaid reimbursable expenses, owed to
                  Employee by Company prior to the date of the termination

            3.2.5 Termination Without Cause. Upon termination of Employee's
                  employment by Company without "Cause," Company shall have no
                  further obligation to Employee under this Agreement or
                  otherwise except to pay to Employee:

                  3.2.5.1.1 Any accrued and unpaid base compensation (less
                  applicable withholdings) and reimbursement of any unpaid
                  reimbursable expenses owed by Company to Employee through the
                  termination date; and

                  3.2.5.1.2 Severance compensation totaling one (1) year base
                  compensation in the form of (i) monthly payments to Employee
                  in the amount of Employee's monthly base salary as in effect
                  on the date of termination, payable in accordance with
                  customary payroll practices, for twelve (12) months following
                  such termination; provided, however, that such severance
                  payments shall be reduced by 50% of any earnings of Employee
                  subsequent to the termination that gives rise to the severance
                  payments. Payment of severance compensation shall be
                  conditioned upon Employee executing a Release Agreement, which
                  shall include among other things the language set forth in
                  Exhibit A and upon Employee's compliance with his obligations
                  under Article 6; provided, however, that Company may in its
                  sole discretion revise the language in Exhibit A at any time
                  prior to the execution of the Release Agreement. Severance
                  compensation pursuant to this Section 3.2.5 shall be in lieu
                  of any other severance benefit or other right or remedy to
                  which Employee would otherwise be entitled under Company's
                  policies in effect on the date of execution of this Agreement
                  or thereafter. Employee acknowledges and agrees that in the
                  event Employee breaches any provision of Article 6 or the
                  Release Agreement, his right to receive severance payments
                  under this Section 4.2.5 shall automatically terminate and
                  Employee shall repay all severance payments received.

                  3.2.5.1.3 For purposes of clarification, Company's or
                  Employee's election not to renew the employment Term shall not
                  constitute a termination without "Cause" covered by this
                  Section 3.2.5, but shall constitute a termination due to
                  expiration of Term and subject to and covered by Section
                  3.2.1.

            3.2.6 Voluntary Termination. Upon Employee's voluntary termination
            of his employment, Company shall have no further obligation to
            Employee under this Agreement or otherwise, except to pay to
            Employee (a) any unpaid base compensation (less applicable
            withholdings) and (b) reimbursement of any unpaid reimbursable
            expenses owed to Employee by Company prior to the date of
            termination.

            3.2.7 Termination Due to Change in Control .

                        Upon termination of Employee's employment by Company due
                        to Change In control," Company shall have no further
                        obligation to Employee under this Agreement or otherwise
                        except to pay to Employee:

                  3.2.7.1.1 Any accrued and unpaid base compensation (less
                  applicable withholdings) and reimbursement of any unpaid
                  reimbursable expenses owed by Company to Employee through the
                  termination date; and

                  3.2.7.1.2 Severance compensation totaling three (3) years base
                  compensation in the form of (i) monthly payments to Employee
                  in the amount of Employee's monthly base salary as in effect
                  on the date of termination, payable in accordance with
                  customary payroll practices, for thirty six (36) months
                  following such termination; provided, however, that such
                  severance payments shall be reduced by 50% of any earnings of
                  Employee subsequent to the termination that gives rise to the
                  severance payments. Payment of severance compensation shall be
                  conditioned upon Employee executing a Release Agreement, which
                  shall include among other things the language set forth in
                  Exhibit A and upon Employee's compliance with his obligations
                  under Article 5; provided, however, that Company may in its
                  sole discretion revise the language in Exhibit A at any time
                  prior to the execution of the Release Agreement. Severance
                  compensation pursuant to this Section 3.2.7 shall be in lieu
                  of any other severance benefit or other right or remedy to
                  which Employee would otherwise be entitled under Company's
                  policies in effect on the date of execution of this Agreement
                  or thereafter. Employee acknowledges and agrees that in the
                  event Employee breaches any provision of Article 6 or the
                  Release Agreement, his right to receive severance payments
                  under this Section 3.2.7 shall automatically terminate and
                  Employee shall repay all severance payments received.

            3.2.8 For purposes of clarification, Company's or Employee's
            election not to renew the employment Term shall not constitute a
            termination without "Cause" covered by this Section 3.2.7, but shall
            constitute a termination due to expiration of Term and subject to
            and covered by Section 3.2.1.

            3.2.9 Board Membership. Upon Employee's termination of employment
            for any reason whatsoever, Employee shall be deemed to have resigned
            as a member of the Board effective as of the date of Employee's
            termination, without any further action by Employee or any other
            party unless nominated by the Nominating committee and subject to
            shareholder approval.

4 REPRESENTATIONS AND WARRANTIES

      4.1   REPRESENTATIONS OF EMPLOYEE. Employee represents and warrants that
            he has all right, power, authority and capacity, and is free to
            enter into this Agreement; that by doing so, Employee will not
            violate or interfere with the rights of any other person or entity;
            and that Employee is not subject to any contract, understanding or
            obligation that will or might prevent, interfere with or impair the
            performance of this Agreement by Employee. Employee shall indemnify
            and hold Company harmless with respect to any losses, liabilities,
            demands, claims, fees, expenses, damages and costs (including
            attorneys' fees and court costs) resulting from or arising out of
            any third party claim or action based upon Employee's violation of
            the foregoing representation.

      4.2   REPRESENTATIONS OF COMPANY. Company represents and warrants that it
            has all right, power and authority, without the consent of any other
            person, to execute and deliver, and perform its obligations under,
            this Agreement. All corporate and other actions required to be taken
            by Company to authorize the

            execution; delivery and performance of this Agreement and the
            consummation of all transactions contemplated hereby have been duly
            and properly taken.

      4.3   MATERIALITY OF REPRESENTATIONS. The representations, warranties and
            covenants set forth in this Agreement shall be deemed to be material
            and to have been relied upon by the parties hereto.

5 COVENANTS

      5.1   NONDISCLOSURE AND INVENTION ASSIGNMENT. Employee shall not disclose
            or use at any time, either during the Term or thereafter, to any
            person or entity or use for his own direct or indirect benefit any
            Confidential Information (as defined below) of which Employer is or
            becomes aware, whether or not such information is developed by
            Employee, except to the extent that such disclosure or use is
            directly related to and required by Employee's Performance of his
            duties under this Agreement. For purposes of this Agreement,
            "Confidential Information" shall include Company's products,
            reports, studies, services, processes, suppliers, customers,
            customers' account executives, financial, sales and distribution
            information, price lists, identity and list of actual and potential
            customers, trade secrets, technical information, business plans and
            strategies to the extent that such information has not been publicly
            disseminated by Company or otherwise made available to the public.
            For purposes of the foregoing, information shall not be deemed to
            have been "publicly disseminated" or "otherwise made available to
            the public" if such dissemination or availability arose as a result
            of a breach of this Agreement.

      5.2   COVENANT TO DELIVER RECORDS. Upon termination of Employee's
            employment, Employee will deliver to Company all customer lists,
            proposals, reports, memoranda, computer software and programming,
            budgets and other financial information, and other materials or
            records or writings of any type (including any copies thereof and
            regardless of the medium in which the information exists) made, used
            or obtained by Employee in connection with his employment by
            Company.

      5.3   EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. Employee
            shall be subject to the provisions of the Company's Employee
            Standards of Professional Conduct Statement and is incorporated
            herein by this reference.

      5.4   NON-SOLICITATION. Employee agrees that, so long as he is employed by
            Company and for a period of one (1) year after termination of his
            employment for any reason, he shall not (a) directly or indirectly
            solicit, induce or attempt to solicit or induce any Company employee
            to discontinue his or her employment with Company (b) usurp any
            opportunity of Company that Employee became aware of during his
            tenure at Company which is made available to him on the basis of the
            belief that Employee is still employed by Company, or (c) directly
            or indirectly solicit or induce or attempt to influence any person
            or business that is an account, customer or client of Company to
            restrict or cancel the business of any such account, customer or
            client with Company. (For purposes of this Agreement, an employee,
            consultant, or agent is defined as any person who has worked for
            Company within the twelve-month period immediately preceding the
            termination of Employee's employment.).

      5.5   NON DISPARAGEMENT. Employee shall not, directly or indirectly,
            either for the benefit of Employee or any other Person, from the
            Effective Date to the first anniversary of the termination of his
            Employment, make any disparaging remarks that are reasonably likely
            to cause material injury to the relationship between the Company or
            its affiliates and any existing or prospective client, lessor,
            lessee, contractual counterparty, vendor, supplier, customer,
            distributor, employee, consultant, regulator or other business
            associate of the Company or its affiliates.

6 CERTAIN RIGHTS OF COMPANY

      6.1   ANNOUNCEMENT. Company shall have the right to make public
            announcements concerning the execution of this Agreement and certain
            terms thereof.

      6.2   RIGHT TO INSURE. Company shall have the right to secure, in its own
            name or otherwise, and at its own expense, life, health, accident or
            other insurance covering Employee, and Employee shall have no right,
            title or interest in and to such insurance. Employee shall assist
            Company in procuring such insurance by submitting to examinations
            and by signing such applications and other instruments as may be
            required by the insurance carriers to which application is made for
            any such insurance.

7     ASSIGNMENT

      7.1   Neither party may assign or otherwise dispose of its rights nor
            obligations under this Agreement without the prior written consent
            of the other party except as provided in this Paragraph. Company may
            assign and transfer this Agreement, or its interest in this
            Agreement, to any affiliate of Company or to any entity that is a
            party to a merger, reorganization, or consolidation with Company, or
            to a subsidiary of Company, or to any entity that acquires
            substantially all of the assets of Company or of any division with
            respect to which Employee is providing services (providing such
            assignee assumes Company's obligations under this Agreement) without
            Employee's consent. Employee shall, if requested by Company, perform
            the Services, as specified in this Agreement, for the benefit of any
            subsidiary or other affiliate of Company. Upon assignment,
            acquisition, merger, consolidation or reorganization, the term
            "Company" as used herein shall be deemed to refer to such assignee
            or successor entity. Employee shall not have the right to assign his
            interest in this Agreement, any rights under this Agreement, or any
            duties imposed under this Agreement, nor shall Employee or his
            spouse, heirs, beneficiaries, executors or administrators have the
            right to pledge, hypothecate or otherwise encumber Employee's right
            to receive compensation hereunder without the express written
            consent of Company.

8 RESOLUTION OF DISPUTES

      8.1   VENUE. In the event of any dispute arising out of or in connection
            with this Agreement or in any way relating to the employment of
            Employee that leads to the filing of a lawsuit, the parties agree
            that venue and jurisdiction shall be in Los Angeles County,
            California.

      8.2   SUBMISSION TO ARBITRATION. Company and Employee agree that any
            dispute with any party (including Company's affiliates, successors,
            predecessors, contractors, employees and agents) that may arise out
            of this Agreement, or Employee's engagement with Company or the
            termination thereof, shall be submitted for resolution by mandatory,
            binding arbitration in accordance with Company's standard
            Alternative Dispute Resolution Agreement. The arbitration
            requirement applies to all statutory, contractual and/or common law
            claims including, but not limited to, claims arising under Title VII
            of the Civil Rights Action of 1964; the Age Discrimination in
            Employment Act; the Equal Pay Act of 1963; the California Fair
            Employment and Housing Act; California Labor Code sections 200, et
            seq., 970, and 1050, et seq.; the Fair Labor Standards Act; and the
            Americans with Disabilities Act. Both Company and Employee shall be
            precluded from bringing or raising in court or any other forum any
            dispute that was or could have been submitted to binding
            arbitration. This arbitration requirement does not apply to claims
            for workers' compensation benefits, claims arising under ERISA (29
            U.S.C. Sections 1001, et seq.) or provisional remedies under
            California Code of Civil Procedure section 1281.8.

      8.3   PAYMENT OF COSTS AND FEES. Where required by law, Company shall pay
            all additional costs peculiar to the arbitration to the extent such
            costs would not otherwise be incurred in a court proceeding (for
            instance, Company will, if required, pay the arbitrator's fees to
            the extent it exceeds Court filing fees). Each party shall pay its
            own costs and attorneys' fees in the first instance. However, the
            arbitrator may award costs and attorneys' fees to the prevailing
            party to the extent permitted by law.

9 GENERAL PROVISIONS

      9.1   NOTICES. Notice under this Agreement shall be sufficient only if
            personally delivered by a major commercial paid delivery courier
            service or mailed by certified or registered mail (return receipt
            requested and postage pre-paid) to the other party at its address
            set forth in the signature block below or to such other address as
            may be designated by either party in writing. If not received
            sooner, notices by mail shall be deemed received five (5) days after
            deposit in the United States mail.

      9.2   AGREEMENT CONTROLS. Unless otherwise provided for in this Agreement,
            Company's policies, procedures and practices shall govern the
            relationship between Employee and Company. If, however, any of
            Company's policies, procedures and/or practices conflict with this
            Agreement (together with any amendments hereto), this Agreement (and
            any amendments hereto) shall control.

      9.3   AMENDMENT AND WAIVER. Any provision of this Agreement may be amended
            or modified and the observance of any provision may be waived
            (either retroactively or prospectively) only by written consent of
            the parties. Either party's failure to enforce any provision of this
            Agreement shall not be construed as a waiver of that party's right
            to enforce such provision.

      9.4   GOVERNING LAW. This Agreement and the performance hereunder shall be
            interpreted under the substantive laws of the State of California,
            without giving effect to the conflict of law principles thereof.

      9.5   FORCE MAJEURE. Either party shall be temporarily excused from
            performing under this Agreement if any force majeure or other
            occurrence beyond the reasonable control of either party makes such
            performance impossible, except a Disability as defined in this
            Agreement, provided that the party subject to the force majeure
            provides notice of such force majeure at the first reasonable
            opportunity. Under such circumstances, performance under this
            Agreement that related to the delay shall be suspended for the
            duration of the delay provided the delayed party shall resume
            performance of its obligations with due diligence once the delaying
            event subsides. In case of any such suspension, the parties shall
            use their reasonable best efforts to overcome the cause and effect
            of such suspension.

      9.6   REMEDIES. Employee acknowledges that because of the nature of
            Company's business, and the fact that the services to be performed
            by Employee pursuant to this Agreement are of a special, unique,
            unusual, extraordinary, and intellectual character that give them a
            peculiar value, a breach of this Agreement shall cause substantial
            injury to Company for which money damages cannot reasonably be
            ascertained and for which money damages would be inadequate.
            Employee therefore agrees that Company shall have the right to
            obtain injunctive relief, including the right to have the provisions
            of this Agreement specifically enforced by Arbitration having equity
            jurisdiction, in addition to any other remedies that Company may
            have.

      9.7   SEVERABILITY. If any term, provision, covenant, paragraph, or
            condition of this Agreement is held to be invalid, illegal, or
            unenforceable by any court of competent jurisdiction, that provision
            shall be limited or eliminated to the minimum extent necessary so
            this Agreement shall otherwise remain enforceable in full force and
            effect.

      9.8   CONSTRUCTION. Headings and captions are only for convenience and
            shall not affect the construction or interpretation of this
            Agreement. Whenever the context requires, words, used in the
            singular shall be construed to include the plural and vice versa,
            and pronouns of any gender shall be deemed to include the masculine,
            feminine, or neuter gender.

      9.9   COUNTERPARTS. This Agreement may be signed in counterpart copies,
            each of which shall represent an original document, and all of which
            shall constitute a single document.

      9.10  NO ADVERSE CONSTRUCTION. The rule that a contract is to be construed
            against the party drafting the

            contract is hereby waived, and shall have no applicability in
            construing this Agreement or the terms hereof.

      9.11  ENTIRE AGREEMENT. With respect to its subject matter, namely, the
            engagement by Company of Employee, this Agreement and all exhibits
            hereto (including the documents expressly incorporated herein, such
            as the Employee Proprietary Information and Inventions Agreement)
            contain the entire understanding between the parties, and supersedes
            any prior agreements, understandings, and communications between the
            parties, whether oral, written, implied or otherwise.

Assistance of Counsel. Employee expressly acknowledges that he was advised he
has the right to be represented by counsel of his own choosing in connection
with the negotiation and drafting of the terms of this Agreement.

      9.12  ATTORNEYS' FEES. Company shall reimburse Employee up to $2,500 for
            attorneys' fees incurred by Employee for advice and negotiation in
            connection with the execution of this Agreement. Such reimbursement
            shall be made on the date that is six (6) month after the Effective
            Date and only if, on that date; Employee is then employed by
            Company.

      9.13  FURTHER ASSURANCES. Each party hereto shall execute such documents
            and other papers and take such further actions as may be reasonably
            required or desirable to carry out the provisions of this Agreement
            and the transactions contemplated by this Agreement.

      9.14  PAYMENT OF TAXES. To the extent that any taxes become payable by
            Employee by virtue of any payments made or benefits conferred by the
            Company, the Company shall not be liable to pay or obligated to
            reimburse Employee for any such taxes or to make any adjustment
            under this Agreement. Any payments otherwise due under this
            Agreement to Employee shall be reduced by any required withholding
            for Federal, State and/or local taxes and other appropriate payroll
            deductions.


The parties execute this Executive Employment Agreement as of the date stated
above:


EMPLOYEE                                 SUPERIOR INDUSTRIES INTERNATIONAL, INC.


By: /s/ Steven J. Borick                 By: /s/ Louis L. Borick
    ---------------------------------    ---------------------------------------
      Steven J. Borick                         Louis L. Borick,
                                               Chairman of the Board and CEO

Address:

NOTICE ADDRESS

                                    EXHIBIT A

                           RELEASE AGREEMENT LANGUAGE

In consideration for this severance compensation, Employee, upon accepting such
severance payment, on behalf of himself, his agents, heirs, executors,
administrators, and assigns, expressly releases and forever discharges Company
and its successors and assigns, and all of its respective agents, Directors,
officers, partners, employees, representatives, insurers, attorneys, parent
companies, subsidiaries, affiliates, and joint venturers, and each of them, from
any and all claims based upon acts or events that occurred on or before the date
on which Employee accepts the severance compensation, including any claim
arising under any state or federal statute or common law, including, but not
limited to, Title VII of the Civil Rights Act of 1964, 42
U.S.C.Sections 2000e, et seq., the Americans with Disabilities Act, 42
U.S.C.Sections 12101, et seq., the Age Discrimination in Employment Act, 29
U.S.C.Sections 623, et seq., the Worker Adjustment and Retraining
Notification Act, 29 U.S.C.Sections 2101, et seq., the California Fair
Employment and Housing Act, California Government Code Sections 12940, et
seq., breach of contract, and any other statutory or common law claim.

Employee acknowledges that he is familiar with section 1542 of the California
Civil Code, which reads as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MIGHT HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

Employee expressly acknowledges and agrees that he is releasing all known and
unknown claims, and that he is waiving all rights he has or may have under Civil
Code section 1542 or under any other statute or common law principle of similar
effect. Employee acknowledges that the benefits he is receiving in exchange for
this Release are more than the benefits to which he otherwise would have been
entitled, and that such benefits constitute valid and adequate consideration for
this Release. Employee further acknowledges that he has read this Release,
understands all of its terms, and has consulted with counsel of his choosing
before signing this Agreement.

EX-31.1

                                                                    EXHIBIT 31.1

                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Louis L. Borick, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Superior Industries
      International, Inc.;

2.    Based on my knowledge, this quarterly 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 quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly 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
      quarterly 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 quarterly report is being prepared;

      b.    evaluated the effectiveness of the registrant's disclosure controls
            and procedures and presented in this quarterly report our
            conclusions about the effectiveness of the disclosure controls and
            procedures as of the end of the period covered by the quarterly
            report based on our evaluation; and

      c.    disclosed in this quarterly report any change in the registrant's
            internal control over financial reporting that occurred during the
            registrant's current 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 performing the equivalent functions):

      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: May 7, 2004              /s/ Louis L. Borick
                               -----------------------------------------------
                               Louis L. Borick
                               Chairman of the Board and Chief Executive Officer

EX-31.2

                                                                    EXHIBIT 31.2

                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, R. Jeffrey Ornstein, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Superior Industries
      International, Inc.;

2.    Based on my knowledge, this quarterly 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 quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly 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
      quarterly 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 quarterly report is being prepared;

      b.    evaluated the effectiveness of the registrant's disclosure controls
            and procedures and presented in this quarterly report our
            conclusions about the effectiveness of the disclosure controls and
            procedures as of the end of the period covered by the quarterly
            report based on our evaluation; and

      c.    disclosed in this quarterly report any change in the registrant's
            internal control over financial reporting that occurred during the
            registrant's current 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 performing the equivalent functions):

      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: May 7, 2004         /s/   R. Jeffrey Ornstein
                          --------------------------------------------
                          R. Jeffrey Ornstein
                          Vice President and Chief Financial Officer

EX-32

                                                                      EXHIBIT 32

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his capacity as an officer of
Superior Industries International, Inc. (the "company"), for purposes of 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of his knowledge:

            -     The Quarterly Report of the company on Form 10-Q for the
                  period ended March 31, 2004 as filed with the Securities and
                  Exchange Commission fully complies with the requirements of
                  Section 13(a) or Section 15(d), as applicable, of the
                  Securities Exchange Act of 1934, as amended; and

            -     The information contained in such report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the company.

Dated: May 7, 2004

                                         /s/ Louis L. Borick
                                         -----------------------------------
                                         Name:  Louis L. Borick
                                         Title: Chairman of the Board and
                                                Chief Executive Officer

                                         /s/ R. Jeffrey Ornstein
                                         ------------------------------------
                                         Name:  R. Jeffrey Ornstein
                                         Title: Vice President and
                                                Chief Financial Officer