10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended January 2, 2005

Commission file number 1-12068

Metaldyne Corporation

(Formerly known as MascoTech, Inc.)
(Exact name of registrant as specified in its charter)

Delaware				38-2513957
(State of Incorporation)				(I.R.S. Employer Identification No.)
47659 Halyard Drive, Plymouth, Michigan				48170-2429
(Address of Principal Executive Offices)				(Zip Code)

Registrant's telephone number, including area code: 734-207-6200

Securities registered pursuant to Section 12(B) of the Act:
Title of each class
Common Stock, $1.00 par Value

Name of each exchange on which registered
None

Securities registered pursuant to Section 12(g) of the Act:
None

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, and (2) has been subject to such filing requirements for the past 90 days.

Yes      No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    

Indicate by check mark whether the Registrant is an accelerated filer.    Yes      No  

There is currently no public market for the Registrant's Common Stock.

Number of shares outstanding of the Registrant's Common Stock at March 15, 2005: 42,844,760, par value $1.00 per share.

Portions of the Registrant's definitive Proxy Statement to be filed for its 2005 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

ITEM								Page
PART I
1.				Business					5
2.				Properties					17
3.				Legal Proceedings					19
4.				Submission of Matters to a Vote of Security Holders					19
4 A.				Executive Officers of the Registrant					19
PART II
5.				Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities					21
6.				Selected Financial Data					21
7.				Management's Discussion and Analysis of Financial Condition and Results of Operations					22
7A.				Quantitative and Qualitative Disclosures about Market Risk					48
8.				Financial Statements and Supplementary Data					49
9.				Changes in and Disagreements with Accountants on Accounting and Financial Disclosure					98
9 A.				Controls and Procedures					98
9 B.				Other Information					99
PART III
10.				Directors and Executive Officers of the Registrant					100
11.				Executive Compensation					100
12.				Security Ownership of Certain Beneficial Owners and Management					100
13.				Certain Relationships and Related Transactions					100
14.				Principal Accounting Fees and Services					100
PART IV.
15.				Exhibits and Financial Statement Schedule					101
Signatures									106
FINANCIAL STATEMENT SCHEDULE
Metaldyne Corporation Financial Statement Schedule									107

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PART I

Caution Concerning Forward Looking Statements and Certain Risks Related to Our Business and Our Company — Safe Harbor Statements

This report contains statements reflecting the Company's views about its future performance, its financial condition, its markets and many other matters that constitute "forward-looking statements." These views involve risks and uncertainties that are difficult to predict and may cause the Company's actual results and/or expectations about various matters to differ significantly from those discussed in such forward-looking statements. All statements, other than statements of historical fact included in this annual report, regarding our strategy, future operations, financial condition, expected results and costs, new business, estimated revenues and losses, prospects and plans are forward-looking statements. When used in this annual report, the words "will," "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. You should not place undue reliance on these forward-looking statements. All forward-looking statements speak only as of the date of this annual report and we undertake no obligation to update such information. Readers should consider that various factors may affect whether actual results and experience correspond with our forward-looking statements and that many of these factors also represent risks attendant to owning securities in the Company, including the following:

•

Dependence on Automotive Industry and Industry Cyclicality — The industries in which we operate depend upon general economic conditions and are highly cyclical. Our performance is affected particularly by new vehicle sales, which can be highly sensitive to changes in interest rates, consumer confidence and fuel costs. We experience sales declines during the third calendar quarter as a result of scheduled OEM shutdowns.

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

•	Ability to Finance Capital Requirements — Our business is capital intensive. We have made substantial capital investments to improve capacity and productivity and to meet customer requirements. More investment is required to maintain and expand our future business awards. If we are unable to meet future capital requirements, our business may be materially adversely affected.

•

Increases in Costs Due to Our Supply Base and Raw Materials — Increases in our raw material or energy costs or the loss of a substantial number of our suppliers could negatively affect our financial health and results. In particular, we have been recently adversely impacted by steel costs, which we have been unable to wholly mitigate. In addition, certain of our suppliers have suffered financial distress, which may materially adversely impact us as well in terms of the potential for interrupted supply, unfavorable payment terms and/or higher prices. Specifically, two of our largest suppliers have declared bankruptcy, and are in the process of reorganizing. The effect on the Company from these bankruptcies is unknown, but they could result in the Company paying higher prices, having less favorable payment terms and/or having interrupted supply of parts.

•

Our Industries are Highly Competitive — Continuing trends among our customers will increase competitive pressures in our businesses. Certain of our competitors have greater financial resources and, in some cases, we compete with our own customers. The continuing trend towards limiting outside suppliers involves significant risks, as well as opportunities, and has increased competition. We have experienced and may continue to experience adverse pricing pressures as a result.

•	Changing Technology — Our products are subject to changing technology, which could place us at a competitive disadvantage relative to alternative products introduced by competitors. We may require significant ongoing and recurring additional capital expenditures and investment in research and development, manufacturing and other areas to remain competitive.

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

•	Dependence on Key Personnel and Relationships — We depend on the services of key individuals, particularly our executive officers, and our relationship with our controlling stockholder. The loss of any key individual or change in our relationship with our controlling stockholder could materially and adversely harm us.

•	Labor Stoppages Affecting OEMs — We may be subject to work stoppages at our facilities or those of our principal customers or suppliers, which could materially and adversely harm us.

•	Outsourcing Trend — Our strategies may not succeed if anticipated outsourcing among automotive manufacturers fails to materialize to the extent we have assumed. Principal risks to continued outsourcing are union/labor considerations and objections.

•	International Sales — A growing portion of our revenue may be derived from international sources, which exposes us to certain risks, such as foreign trade restrictions, government embargoes, tariffs, foreign currency risks, expatriation risks and political instability.

•

Product Liability and Warranty Claims — We may incur material losses and costs as a result of product liability and warranty claims that may be brought against us in the event that the use of our current and formerly manufactured or sold products results, or is alleged to result, in bodily injury and/or property damage or fails to meet our customer specifications. In addition, claims may be asserted against us in respect of formerly owned operations, such as TriMas, for which we are indemnified. In the event of financial difficulties, TriMas may be unable to satisfy indemnification claims.

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

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

•	Terms of Stockholders Agreement — Provisions of a stockholders agreement among the majority of our stockholders impose significant operating and financial restrictions on our business without certain stockholder agreement. In the event our significant stockholders are unable to agree on certain actions, we may be materially and adversely impacted.

•	Leverage; Ability to Service Debt — We may not be able to manage our business as we might otherwise do so due to our high degree of leverage. Our high degree of leverage means that we must dedicate significant cash flow to debt service. By doing so, we will have greater difficulty in meeting other important commercial and financial obligations or in pursuing various strategies and opportunities.

•

Substantial Restrictions and Covenants — Restrictions in our debt instruments limit our ability to take certain actions, including to incur further debt, finance capital expenditures, pay dividends and sell or acquire assets or businesses. These restrictions may prevent us from taking actions in the interests of our security holders. In addition, our ability to comply with our financial covenants in our debt instruments may be impacted by numerous matters, including matters beyond our control. In the event we are unable to satisfy these covenants in the future, we will be in default and may be materially and adversely impacted.

•	Implementation of Control Improvements — We have not yet completed implementation of our current plans to improve our internal controls and may be unable to remedy certain internal control weaknesses identified by our independent auditors and take other actions to meet our 2006 compliance deadline for Section 404 of the Sarbanes-Oxley Act of 2002.

•	Impact of Restatement — The disclosure of the weaknesses in our internal control over financial reporting may adversely impact the confidence of those with whom we have commercial or

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financial relationships. Our conclusions and actions relative to our control weaknesses is subject to scrutiny in the future, including review by the Securities and Exchange Commission in connection with its ordinary course review of our public filings and disclosures or otherwise. In addition, as described further in Item 6 of this Form 10-K, the Company has not presented certain information for periods prior to the acquisition of the Company in November 2000 in the "Selected Financial Data" tables. We have requested a waiver from the Securities and Exchange Commission for relief from this requirement. However, it is possible that the Staff may not grant such relief, in which case the Company may be required to amend this report to include such information. Because the necessary financial information for the periods prior to the Company's recapitalization date is not available, it is uncertain whether the Company could comply with such a requirement. Should that be the case, our filing would continue to be deficient and we would not have access to the public debt and equity markets.

We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

There are few published independent sources for data related to the markets for many of our products. To the extent we are able to obtain or derive data from independent sources, we have done so. In particular, we used a report produced by the Ducker Research Company, Inc. profiling North American Forging, Foundry and Machinery Industries prepared in 2000 for Heartland Industrial Partners, L.P., our largest shareholder. To the extent information in the Ducker Report is dated, we have expressed our belief by extrapolating data from the Ducker Report using other publicly available information about the competitors and products addressed in the Ducker Report. To the extent information is otherwise not obtained or derived from independent sources, we have expressed our belief based on our own internal analyses and estimates of our and our competitors' products and capabilities. We note that many of the industries in which we compete are characterized by competition among a small number of large suppliers. Industry publications and surveys and forecasts that we have used generally state that the information contained therein has been obtained from sources believed to be reliable. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying assumptions or bases for any such information. In general, when we say we are a "leader" or a "leading" manufacturer or make similar statements about ourselves, we are expressing our belief that we formulated principally from our estimates and experiences in, and knowledge of, the markets in which we compete. In some cases, we possess independent data to support our position, but that data may not be sufficient in isolation for us to reach the conclusions that we have reached without our knowledge of our markets and businesses.

In addition to the foregoing, readers of this annual report are cautioned that, prior to the filing of the 2003 Form 10-K report, the Commission provided the Company with comments in the ordinary course on its filings under the Securities Exchange Act of 1934 as amended. The Company believes that it has supplementally or in this report adequately responded to the Staff's comments on the Company's filings. However, it is entirely possible that disclosure may change as a result of the Commission's review of this filing and the Company's responses to those comments. In addition, the Company has not included certain historical selected financial data, as discussed under Item 6 of this annual report, and the Commission may comment that this Form 10-K must be amended for the inclusion of such information.

Item 1.    Business.

Metaldyne Corporation ("Metaldyne" or "the Company") is a leading global manufacturer of highly engineered metal components for the global light vehicle market. Our products include metal-formed and precision-engineered components and modular systems used in vehicle transmission, engine and chassis applications. We serve approximately 200 automotive and industrial customers, with our top ten customers representing approximately 67% of our total 2004 sales.

Our products are sold primarily to both North American and international light vehicle original equipment manufacturers, or OEMs, and Tier I component assemblers and provide content for approximately 95% of the top 40 NAFTA light vehicles produced in 2004. Tier I component assemblers are direct suppliers to OEMs of integrated modules, such as a complete engine assembly or drivetrain

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assembly. Our metal forming processes include cold, warm and hot forging, forged and conventional powder metal, tubular fabrications and precision-aluminum die castings. In addition, we perform design, engineering, machining, finishing and assembly functions. At January 2, 2005, we had approximately 8,000 employees and more than 40 owned or leased manufacturing facilities worldwide.

In North America, we believe that we have leading market shares in several of our products. We are the largest independent forming company, the second largest independent "machining and assembly" supplier, and one of the largest powder metal manufacturers for light vehicle applications. We believe our scale and combined capabilities represent a significant competitive advantage over our competitors, many of which are smaller and do not have the ability to combine metal forming with machining and sub-assembly capabilities. Our customers include BMW, Dana, DaimlerChrysler, Ford, General Motors, Delphi, Honda, Nissan, Renault, Toyota, TRW and Visteon.

For the year ended January 2, 2005, we market our products into three principal segments: Driveline, Engine and Chassis segments.

Driveline Segment.    Driveline is a leading independent manufacturer of components, modules and systems, including precision shafts, hydraulic controls, hot and cold forgings and integrated program management used in a broad range of transmission applications. We believe that we have leading market shares in several product areas, including transmission and transfer case shafts, transmission valve bodies, cold extrusion and Hatebur hot forgings.

Engine Segment.    Engine is a leading supplier of a broad range of engine components, modules and systems. The segment manufactures powder metal, forged and tubular fabricated products used for a variety of applications, including balance shaft modules and front cover assemblies. We believe that we have leading market shares in forged powder metal connecting rods.

Chassis Segment.    Chassis is a leading supplier of components, modules and systems used in a variety of engineered chassis applications, including wheel-ends, knuckles and mini-corner assemblies. This segment utilizes a variety of machining and assembly processes and technologies. We apply full-service integrated machining and assembly capabilities to an array of chassis components.

Recent Developments

Restatement Of Financial Statements And Completion Of Independent Investigation — In September 2004, the Company announced the completion of an Independent Investigation into certain accounting matters (the "Independent Investigation") and management and the audit committee's determination that certain previously issued financial statements required restatement. While certain of the matters that are the subject of the restatement would affect periods prior to the acquisition of the Company in November 2000, the Company has not presented such periods in "Selected Financial Data" in this Form 10-K for reasons discussed under Item 6. The Company has omitted such financial data due to the material difficulties the Company has encountered in determining the adjustments necessary to prepare the financial statements for these periods. The Company has requested a waiver of the requirement for such information from the Securities and Exchange Commission.

The restatement adjustments affecting periods subsequent to November 2000 addressed [1] inappropriate actions taken at the Sintered Division by correcting overstated balances for property, plant and equipment and recognizing lower depreciation expense and recognizing the continuing effect of adjustments made in prior periods on previously reported balances of other accounts such as accounts payable and accounts receivable; [2] the correction of certain journal entries, primarily relating to the "smoothing" of earnings through adjustments to certain tooling, accrual and allowance accounts, identified by the Independent Investigation; and [3] other adjustments identified during the Company's review. Reference is made to Item 8, Note 2 to the Company's consolidated financial statements as filed in the Company's Form 10-K for the year ended December 28, 2003 not appearing herein, for greater detail on these restatement adjustments.

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Credit Agreement Amendment — In December 2004, we obtained an amendment of our credit facility to, among other things, modify certain negative covenants. Under this amendment, the applicable interest rate spreads on our term loan obligations increased from 4.25% to 4.50% over the current London Interbank Offered Rate ("LIBOR"), while our leverage covenant was modified to be less restrictive.

Reorganization — In January 2005, we reorganized to streamline our operating efficiency and cost structure. Our operations were consolidated into two segments: Chassis segment and the Powertrain segment. The Chassis segment consists of our former Chassis operations plus a portion of our former Driveline operations, while the Powertrain segment consists of our former Engine operations combined with the remainder of the former Driveline operations. As this change became effective in fiscal 2005, our Form 10-Q for the quarter ending April 3, 2005 will report operating results in these two segments along with restated results for the year ended January 2, 2005. When we refer to our segments throughout this Report, unless otherwise noted, we refer to our Driveline, Chassis and Engine segments that existed for the fiscal year ended January 2, 2005.

Divestiture — On February 1, 2004, we completed an asset sale pursuant to which substantially all of the business associated with two of the aluminum die casting facilities in our Driveline segment was sold to Lester PDC, Ltd. In connection with the asset sale, Lester PDC leased our Bedford Heights, Ohio facility and subleased our Rome, Georgia facility. In addition, Lester PDC and Metaldyne entered into a supply agreement. These facilities had 2003 combined sales of approximately $62 million and an operating loss of approximately $14 million. In November 2004, Lester PDC discontinued operations at the Bedford Heights facility and the supply agreement and lease agreement between Lester PDC and Metaldyne were terminated. As a result, we assumed production of some of the products at the Bedford Heights facility that were subject to the terminated supply agreement. One of these product lines is currently being manufactured at the Bedford Heights facility and the remaining products have been moved to other Metaldyne facilities.

Restructuring Activity — In 2004, we entered into several restructuring arrangements whereby we incurred approximately $2.8 million of costs associated with severance for the year ended January 2, 2005. Charges incurred by segment are as follows: Chassis Group $0.1 million relating to headcount reduction initiatives; Driveline Group $1.8 million primarily relating to charges associated with the closure of a facility in Europe; Engine Group $0.1 million relating to headcount reduction initiatives; and Corporate $0.8 million primarily relating to headcount reductions. In fiscal 2003, we entered into several restructuring arrangements whereby we incurred approximately $13.1 million of costs associated with severance and facility closures. These actions include the completion of the Engine segment's European operation reorganization that was initiated in fiscal 2002 and completed in the first quarter of 2003 and actions within the Driveline segment's forging operations and administrative departments to eliminate redundant headcount and adjust costs to reflect the decline in our forging revenue in 2003. Also included in this charge were severance costs to replace certain members of our executive management team and the costs to restructure several departments in our corporate office, including the sales, human resources and information technology departments. We expect to realize additional savings from the 2004 and 2003 restructuring actions, described above, in 2005 as reductions in employee-related expenses recognized in both cost of goods sold and selling, general and administrative expense.

Market Opportunities and Growth Strategies

In order to reduce costs and consolidate volume with full scale suppliers, we believe OEMs and Tier I suppliers will continue to seek to outsource the design, manufacture and assembly of fully integrated, modular assemblies of metal parts in engine, transmission and chassis. We believe that the following favorable market factors have driven and will continue to drive the domestic OEM's desire to continue outsourcing:

•	in many cases, full-scale suppliers have lower production costs than OEMs and are able to provide significant cost reduction opportunities;

•	OEMs are consolidating their supply base among global, full service suppliers capable of meeting the OEM's needs uniformly across their geographic production base; and

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•	emissions, fuel economy and customer preferences are driving the design of a new generation of components for engine, transmission and chassis applications to increase efficiency and performance and to reduce weight.

Our strategy is to take advantage of our leading market position in the manufacture of highly engineered metal components to (i) expand our leadership as a supplier of high-quality, low-cost metal formed components, and (ii) become one of the leading suppliers of high-quality low-cost metal formed assemblies and modules, to the global light vehicle industry. Key elements of our strategy include the following:

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Focus on Full-Service, Integrated Supply Opportunities.    By offering a full complement of metal solutions, we believe we provide OEMs with "one-stop" shopping to optimize weight, cost, stress, durability, fatigue resistance and other metal component attributes of products. We believe that our capabilities in engineering, design, machining and assembly position us to capture a greater share of the "value chain" and deliver to customers finished assemblies and modules rather than independent parts. Currently, OEMs satisfy a significant portion of their metal forming and assembly requirements with in-house production and assembly of purchased components. We believe that, as OEMs seek to outsource the design and manufacture of parts, they will choose suppliers with expertise in multiple metal-forming technologies and the ability to design, engineer and assemble components rather than supply independent parts. We believe that it is widely accepted within our industry that OEM's and Tier 1 suppliers will continue to seek to outsource the design, manufacture and assembly of metal parts in engine, transmission and chassis. For example, the principal purpose of our recent acquisition of the New Castle, Indiana facility from DaimlerChrysler was to allow DaimlerChrysler to outsource to us items previously manufactured in-house. We intend to enhance our strengths in forged steel, powder metal and precision-aluminum die cast components by adding additional engineering design and machining and assembly capabilities.

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Increase Content per Vehicle.    We are aggressively pursuing new business opportunities to supply a large portion of value-added content utilizing our integrated capabilities. These opportunities can result in significant increases in content per vehicle on related programs. For example, where we used to produce and sell a balance shaft for approximately $15 per unit, we have now been awarded the entire balance shaft module for approximately $70 per unit on the future model of this same vehicle.

In 2004, our content per vehicle in North America was approximately $105 and we expect to materially increase our content per vehicle as a result of new business awards that we are pursuing. Prior to our acquisitions of Simpson Industries in late 2000 and GMTI in early 2001, we primarily marketed single components, such as individual gears or shafts. As a result of these acquisitions and significant additional investment in our engineering and design groups, we have enhanced our capabilities in process technology which allows us to make entire sub assemblies and modules that may, for example, be composed of many component gears or shafts. We have been actively marketing these increased capabilities over the last several years and have been successful in increasing our content on future Drivetrain, Chassis and Engine platforms.

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Leverage Our Engineering, Design and Information Technology Capabilities.    We believe that in order to effectively develop total metal component and assembly solutions, research, development and design elements must be integrated with product fabrication, machining, finishing and assembly. We believe that our scale and product line relative to most of our competitors enable us to efficiently invest in engineering, design and information capabilities. For example, we designed and developed a front engine module that integrates multiple components into one fully tested end item that increased the products' performance and durability while reducing noise/vibration effects and overall system costs.

•	Continue to Pursue Cost Savings Opportunities and Operating Synergies.    We have pursued, and will continue to pursue, cost savings that enhance our competitive position in serving OEMs and Tier I suppliers. In 2002 and 2003, we implemented a comprehensive shared services platform for a range of overhead functions including finance, information technology, procurement and human

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resources. We believe the shared services program will improve management information and result in significant future cost savings. We also believe that shared services will allow us to better utilize our working capital due to centralized management of accounts payable, accounts receivable and payroll activities. We believe we have additional opportunities to improve our margins as we achieve operating synergies with increased volumes and continue to vertically integrate our machining and assembly capacity with our metal forming abilities.

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Pursue Strategic Combinations and Global Expansion Opportunities.    We plan to continue to evaluate acquisition opportunities that strategically expand our metal and process capabilities and contribute to our geographic diversity and market share. Global expansion is an important component of our growth strategy since a significant portion of the global market for engineered metal parts is outside of North America. Furthermore, as OEMs continue to consolidate their supply base, we believe they are seeking global suppliers that can provide seamless product delivery across their geographic production regions. Our ability to execute this strategy may be limited by restrictions within our credit agreement.

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Operating Segments

The following table sets forth for the three years ended and as of January 2, 2005, December 28, 2003 and December 29, 2002, the net sales, operating profit, Adjusted EBITDA and net assets for our operating segments. TriMas results are included up to its divestiture on June 6, 2002.

				Net Sales (In thousands)
				2004				2003				2002
Automotive Group
Chassis				$	583,620			$	143,590			$	143,650
Driveline					784,460				790,750				807,010
Engine					636,180				573,860				512,960
Automotive Group					2,004,260				1,508,200				1,463,620
TriMas Group (1)					—				—				328,580
Total sales				$	2,004,260			$	1,508,200			$	1,792,200

				Operating Profit (In thousands)
Automotive Group
Chassis				$	17,660			$	4,720			$	8,190
Driveline					1,350				12,740				54,730
Engine					57,000				45,800				32,740
Automotive Operating				$	76,010			$	63,260			$	95,660
Automotive/centralized resources ("Corporate")					(46,600	)			(42,960	)			(33,090	)
Automotive Group					29,410				20,300				62,570
TriMas Group (1)					—				—				46,140
Total operating profit				$	29,410			$	20,300			$	108,710

				Adjusted EBITDA(2) (In thousands)
				2004				2003				2002
Automotive Group
Chassis				$	44,960			$	12,350			$	13,520
Driveline					64,070				71,590				100,590
Engine					96,290				81,780				63,370
Automotive Operating Adjusted EBITDA				$	205,320			$	165,720			$	177,480
Automotive/centralized resources ("Corporate")					(34,650	)			(31,720	)			(17,250	)
Automotive Group				$	170,670			$	134,000			$	160,230
TriMas Group (1)					—				—				62,400
Total Adjusted EBITDA				$	170,670			$	134,000			$	222,630

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				Total Assets (In thousands)
				2004				2003				2002
Automotive Group
Chassis				$	338,650			$	135,560			$	148,260
Driveline					926,920				967,790				865,120
Engine					574,630				525,190				653,700
Automotive Group					1,840,200				1,628,540				1,667,080
TriMas Group					—-				—-				—-
Corporate					354,550				383,320				350,910
Total				$	2,194,750			$	2,011,860			$	2,017,990

(1)	TriMas Group is included in our financial results through June 6, 2002, the date of its divestiture. Subsequent to June 6, 2002, our equity share in TriMas' earnings (loss) is included in "Automotive/centralized resources ("Corporate")."

(2)

See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for a complete reconciliation of Adjusted EBITDA to net loss. Adjusted EBITDA is defined as net income (loss) before cumulative effect of accounting change and before interest, taxes, depreciation, amortization, asset impairments, non-cash losses on sale-leaseback of property and equipment and non-cash restricted stock award expense. In evaluating Adjusted EBITDA, our management deems it important to consider the quality of our underlying earnings by separately identifying certain costs undertaken to improve our results, such as costs related to consolidating facilities and businesses in an effort to eliminate duplicative costs or achieve efficiencies, costs related to integrating acquisitions and restructuring costs related to expense reduction efforts. Although our consolidation, restructuring and integration efforts are continuing and driven in part by our acquisition activity, our management eliminates these costs to evaluate underlying business performance. Caution must be exercised in eliminating these items as they include substantially (but not necessarily entirely) cash costs and there can be no assurance that we will ultimately realize the benefits of these efforts. Moreover, even if the anticipated benefits are realized, they may be offset by other business performance or general economic issues.

Our three segments seek to provide innovative, cost-effective solutions by using a range of metals and processes. By having a range of metals and processes, we are not committed to a single solution and we are able to optimize the range of functionality, durability, quality, cost and weight for our customers. Various metals and processes that we utilize are described below:

Forging.    This operation is part of our Driveline segment. We offer expertise in all forging processes, including hot, warm and cold forging. At our Royal Oak, Michigan facility, we have North America's largest concentration of Hatebur/Hotmatics hot forging machines. These state-of-the-art machines forge concentric parts using the full range of carbon and alloy steels into finished shapes at rates from 70 to 120 pieces per minute. Hot forging processes deliver high-volume products, including transmission and transfer case components such as gear blanks and bearing races, as well as wheel-end components such as wheel hubs and spindles. For parts requiring a higher degree of precision than hot forging, we offer complete warm forging capabilities. Warm forging is ideal for producing complex shapes with desirable grain flow, refined surface finishes and tighter dimensional controls. Some examples of current production include net-formed differential side gear and pinions, CV-Joint races and "spiders" and differential stem pinions. Warm forging eliminates the need for heat treat normalizing, allowing near-net to net-shaped components to be produced without a structural change in the raw material. We are capable of processing 300 million precision cold forged parts annually using low carbon through medium carbon and alloy steels. Examples of precision cold forged components produced with near-net and net tolerances include transmissions, turbine shafts and transfer case shafts with internal and external splines. Our cold forging processes yield products that deliver near-net and net tolerances to minimize additional machining, yet offer enhanced physical properties and a refined surface finish.

Powder Metal.    This operation is part of our Engine segment. We manufacture a wide range of both forged powder metal and conventional, processed, powder metal products for the transportation industry. In addition, we believe we have an 80% share of the NAFTA market for forged powder metal engine connecting rods, and we manufacture a full range of conventionally sintered powder metal components, including engine bearing caps, transfer case sprockets, rocker arm fulcrums and torque converter hubs. Certain forged and casted steel processes are being replaced by powder metal technology because of its superior performance, lighter weight and value. By offering tight tolerances plus net and near-net capabilities, our powder metal components can significantly reduce the need for machining.

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Tubular Fabrications.    This operation is part of our Engine segment. We supply high quality tubular products for exhaust, engine and fuel systems. Our extensive engineering and manufacturing technologies include CNC bending, laser cutting and robotic welding. These capabilities enable us to fabricate a wide range of tubular products, including exhaust manifolds, downpipes, crossover pipes, turbo exhaust tubes, fluid lines and specialty tubular products. The advantages of our tubular fabrications are found in the use of stainless steel versus cast iron, which allow for reductions in weight and heat absorption, while enhancing performance and durability.

Machining and Assembly.    We have machining and assembly operations in each of our three segments. We design and manufacture precision-engineered components and modular systems for passenger and sport utility vehicles, light- and heavy-duty trucks and diesel engines. We believe that we provide cost effective, quality assured assemblies and modules that allow the customer to build engines and vehicles faster and more efficiently.

•

Engine Segment.    We design and manufacture torsional crankshaft dampers, which reduce and eliminate engine and drivetrain noise and vibration. We produce integrated front engine cover assemblies that combine items such as the oil and water pumps. This integrated solution provides OEMs with a simplified process by which to attach the water and oil pumps to the front engine cover subsystem thereby lowering the assembly costs. Modular engine products include oil pumps, balance shaft modules, front engine modular assemblies and water pumps, all of which impact engine durability, reliability and life expectancy.

•	Chassis Segment.    We produce wheel spindles, steering knuckles and hub assemblies, all of which are key components affecting the smoothness of a driver's ride and the handling and safety of an automobile. We apply full-service integrated machining and assembly capabilities to metal-based components to provide the customer with value-added complete components, assemblies and modules.

•	Driveline Segment.    We design, machine and assemble a variety of products including transfer case subassemblies, gear machining and assemblies, transmission modules and differential cases.

Customers

In 2004, approximately 56% of our sales were direct to OEMs. Sales to various divisions and subsidiaries of Ford Motor Company, DaimlerChrysler Corporation and General Motor Corporation accounted for a significant portion of our net sales, summarized below. The Company's acquisition of the New Castle manufacturing operations on December 31, 2003 resulted in a significant increase in sales to DaimlerChrysler in 2004, and subsequently resulted in a decrease as a percentage of total sales to Ford and General Motors. Except for these sales, no material portion of our business is dependent upon any one customer, although we are generally subject to those risks inherent in having a focus on automotive products.

				(In millions)
				2004								2003								2002(1)
				$				%				$				%				$				%
Customer
Ford Motor Company				$	251				12.5	%		$	254				16.9	%		$	257				17.5	%
DaimlerChrysler Corporation					489				24.4	%			158				10.5	%			175				12.0	%
General Motors Corporation					144				7.2	%			156				10.3	%			176				12.0	%
New Venture Gear (2)					—				—				124				8.2	%			168				11.5	%
Automotive Group largest customers					884				44.1	%			692				45.9	%			776				53.0	%
Automotive Group other net sales					1,120				55.9	%			816				54.1	%			688				47.0	%
Total Automotive Group net sales				$	2,004				100.0	%		$	1,508				100.0	%		$	1,464				100.0	%

(1)	Excludes net sales to TriMas prior to our June 6, 2002 divestiture.

(2)	New Venture Gear, a joint venture between DaimlerChrysler and General Motors, was dissolved in 2003. Therefore, comparable 2004 sales are now split between DaimlerChrysler, General Motors and other Tier 1 customers.

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We typically pursue new business opportunities that feature long-term, high-volume commitments to produce highly engineered components with extensive machining and assembly requirements that are ready for installation when they reach our customers' production lines. We work closely with our customers to facilitate meaningful communication that helps our engineers identify product needs and anticipate design development. We distribute and sell our products principally to domestic and transplant OEMs and Tier 1 suppliers in North America and Europe through our own sales force. In connection with our December 2003 acquisition of New Castle, we entered into a multi-year supply agreement with DaimlerChrysler that provides us with pricing protection on products as of the date of acquisition, and special rights on bidding for additional new business with DaimlerChrysler.

New Business

From January 2002 through December 2004, we received over 220 new business awards that support future product programs beginning from 2002 through 2009. The awards extend for up to 10 years, and include metal-formed components, assemblies and modules for OEMs and Tier I customers' chassis, driveline and engine applications. Based on the sales forecast for our customers, as of January 2, 2005, our forecasted cumulative backlog approximates $810 million through 2009, which is the combination of approximately $440 million of awarded programs and approximately $370 million of programs we have identified as highly probable of being awarded but for which we have not yet received a firm purchase order.

Materials and Supply Arrangements

Raw materials and other supplies used in our operations are normally available from a variety of competing suppliers. The primary goods and materials that we procure are various forms of steel and steel processing (e.g. bar, stainless, flat roll, heat-treating), powder metal, secondary and processed aluminum, castings, forgings and energy.

We are sensitive to price movements in our raw material supply base and have therefore secured one-year or longer-term supply contracts for most of our major raw material purchases to protect against inflation and to reduce our raw material cost structure. We purchase 100% of our steel pursuant to one-year or longer-term agreements. These agreements set forth the projected amount of steel that we will buy in the next one to two-year periods. These contracts are established based upon an estimated usage amount for the term of the agreement and do not contain volume commitments. Only a significant usage variation to the contractual amount prior to the end of the contract would require the Company or our supplier to renegotiate the supply agreement. The contracts generally contain a pass through provision to reflect price movements of certain steel ingredient or alloy prices such as steel scrap, nickel and molybdenum. This pass through is generally based on an average price for these commodities and, for the majority of our steel suppliers, is on a three-month lag (i.e. current average price movements are not reflected in the price until three months forward). We expect 2005 purchases of steel to approximate $220 million (principally forging operations) and purchases of aluminum and powder metal (principally Sintered Division) to approximate $50 million each.

For material purchases other than steel, suppliers have typically agreed to price reductions between 0% and 5% of the total purchase price, which are negotiated annually. This price reduction is based upon the quote price as agreed with the supplier. This quote price represents the current market price as determined by the supplier.

The automotive industry has historically experienced cost savings from year-over-year decreases in material costs and increased operational efficiency. These cost savings are necessary to enable us, and our competitors, to offer price reductions to our customers and thereby remain competitive with the market. In a typical year, the materials cost savings and operational efficiency savings are offset by customer price reductions so that automotive suppliers maintain consistent operating margins period over period. In 2003 and 2004, however, we incurred increases in our steel costs that we were not able to offset elsewhere with increased productivity or increased end prices from our customers. The effect of the steel, and other related commodities, price increases had an approximate $7 million and $22 million negative impact on our 2003 and 2004 profitability, respectively. The Section 201 steel tariffs were eliminated in December

13

2003, but despite the tariff repeal, steel prices have increased significantly over the last year and will negatively impact our 2005 performance. We describe the anticipated impact under "Management's Discussion and Analysis of Financial Condition and Results of Operations — Outlook."

In addition, we purchase approximately $0.3 million of product annually from our former TriMas subsidiary.

Competition

The major domestic and foreign markets for our products are highly competitive. Although a number of companies of varying size compete with us, no single competitor is in substantial competition with respect to more than a few of our product lines and services. We compete primarily on the basis of product engineering, performance, technology, price and quality of service. Our major U.S. competitors in North America among the Engine segment's products include Hillsdale Automotive, GKN, Palsis, Stackpole, Tesma, Faurecia, Benteler and internal "metal-forming" operations at General Motors, Ford, DaimlerChrysler and Toyota. Among the Driveline segment's products, we compete with a variety of independent suppliers, including Linamar, Tesma, Delphi, Visteon, American Axle, Impact Forge, Tyssen-BLW, Hirschvogel, Meadville, TechFor and internal "metal-forming" operations at General Motors, Ford and DaimlerChrysler. Among our Chassis segment's products, we compete with a variety of independent suppliers, including Hayes Lemmerz, Hillsdale Automotive, SMW, TRW and internal "metal-forming" operations at General Motors, Ford and DaimlerChrysler. We may also compete with some of our Tier I customers on occasion in seeking to supply the OEMs. In addition, there are several foreign companies, including Palsis, Mitec, MagnaSteyr and Brockhaus that have niche businesses supplying foreign OEMs. We believe that OEMs are likely to continue to reduce their number of suppliers and develop long term, closer relationships with their remaining suppliers. For many of our products, competitors include suppliers in other parts of the world that enjoy economic advantages such as lower labor costs, lower health care costs and, in some cases, various government subsidies.

Employees and Labor Relations

As of January 2, 2005, we employed approximately 8,000 people, of which approximately 54% were unionized. We do not have national agreements in place with any union, and our facilities are represented by a variety of different union organizations. At such date, approximately 25% of our employees were located outside the U.S. Employee relations have generally been satisfactory.

Our labor contracts expire on dates between June 2005 and September 2007. From time to time, unions such as the United Auto Workers and United Steelworkers of America have sought or may seek to organize at our various facilities. We cannot predict the impact of any further unionization of our workplace.

Variability of Business

Sales are mildly seasonal, reflecting the OEM industry standard two-week production shutdown in July and one-week production shutdown in December. In addition, our OEM customers tend to incur lower production rates in the third quarter as model changes enter production. As a result, our third and fourth quarter results reflect these shutdowns and lower production rates.

Our products are typically sourced exclusively by us and future production schedules largely depend on the underlying vehicle builds. However, as our production schedule is dictated by weekly production release schedules from our customers and inventory is generally kept at low levels, production backlog orders are generally immaterial.

Environmental, Health and Safety Matters

Our operations are subject to federal, state, local and foreign laws and regulations pertaining to pollution and protection of the environment, health and safety, governing among other things, emissions to air, discharge to waters and the generation, handling, storage, treatment and disposal of waste and

14

other materials, and remediation of contaminated sites. Some of our subsidiaries have been named as potentially responsible parties under the Federal Superfund law or similar state laws at several sites requiring cleanup based on disposal of wastes they generated. These laws generally impose liability for costs to investigate and remediate contamination without regard to fault and under certain circumstances liability may be joint and several resulting in one responsible party being held responsible for the entire obligation. Liability may also include damages to natural resources. Our businesses have incurred and likely will continue to incur expenses to investigate and clean up existing and former company-owned or leased property, including those properties made the subject of sale-leaseback transactions since late 2000 for which we have provided environmental indemnities to the lessor. We may acquire facilities with both known and unknown environmental conditions. Although we may be entitled to indemnification from the seller or other responsible party for costs incurred as a result of such conditions, we cannot assure you that such indemnity will be satisfied. We may also be held accountable for liabilities associated with former and current properties of our former TriMas businesses, which include two California sites in respect of which TriMas' subsidiaries have entered into consent decrees with many other co-defendants. We are entitled to indemnification by TriMas for such matters, but there can be no assurance that this indemnity will be satisfied.

We believe that our business, operations and facilities are being operated in compliance in all material respects with applicable environmental and health and safety laws and regulations, many of which provide for substantial fines and criminal sanctions for violations. Based on information presently known to us and accrued environmental reserves, we do not expect environmental costs or contingencies to have a material adverse effect on us. The operation of manufacturing plants entails risks in these areas, however, and there can be no assurance that we will not incur material costs or liabilities in the future which could adversely affect us. Potential material expenditures could be required in the future. For example, we may be required to comply with evolving environmental and health and safety laws, regulations or requirements that may be adopted or imposed in the future or to address newly discovered information or conditions that require a response.

Patents and Trademarks

We hold a number of U.S. and foreign patents, patent applications, licenses and trademarks. We have, and will continue to dedicate, technical resources toward the further development of our products and processes in order to maintain our competitive position in the transportation, industrial and commercial markets that we serve. We continue to invest in the design, development and testing of proprietary technologies that we believe will set our products apart from those of our competitors. Many of our patents cover products that relate to noise reduction (NVH), improved efficiency (increased fuel economy) and lower warranty costs for our customers driven primarily by machining technology that provides leading edge specification tolerances and thus decreases product defects caused by parts not meeting specifications. We consider our patents, patent applications, licenses, trademarks and trade names to be valuable, but do not believe that there is any reasonable likelihood of a loss of such rights that would have a material adverse effect on our operating segments or on us. However, we are often required to license certain intellectual property rights to our customers in order to obtain business and new program awards.

International Operations

In addition to the United States, we have a global presence with operations in Brazil, Canada, the Czech Republic, France, Germany, India, Italy, Mexico, South Korea, Spain and the United Kingdom. An important element of our strategy is to be able to provide our customers with global capabilities and solutions that can be utilized across their entire geographic production base. Products manufactured outside of the United States include Engine, Driveline and Chassis products. Engine products include isolation pulleys, viscous dampers and powder metal connecting rods. Driveline products include cold and warm forged parts such as transmission gears, and Chassis products include various wheel end products such as machined knuckles.

The following table presents our revenues for each of the years ended January 2, 2005, December 28, 2003 and December 29, 2002, and total assets and long lived assets (defined as equity investments and

15

receivables in affiliates, net fixed assets, intangible and other assets and excess of cost over net assets of acquired companies) at each year ended January 2, 2005 and December 28, 2003 by geographic area, attributed to each subsidiary's continent of domicile. Revenue and net assets from no single foreign country were material to the consolidated revenues and net assets of the Company.

				(In thousands)
				2004												2003												2002
				Sales				Total Assets				Long Lived Assets				Sales				Total Assets				Long Lived Assets				Sales
Europe				$	334,780			$	435,500			$	364,270			$	296,540			$	400,420			$	339,950			$	247,370
Australia					—				—				—				—				—				—				10,850
Other North America					71,930				85,690				62,580				50,200				55,610				44,690				56,150
Other foreign					17,420				32,290				23,450				7,890				6,820				4,320				6,160
Total foreign				$	424,130			$	553,480			$	450,300			$	354,630			$	462,850			$	388,960			$	320,530
United States				$	1,580,130			$	1,641,270			$	1,380,700			$	1,153,570			$	1,549,010			$	1,305,850			$	1,471,670

As part of our business strategy, we intend to expand our international operations through internal growth and acquisitions. Sales outside the United States, particularly sales to emerging markets, are subject to various risks including governmental embargoes or foreign trade restrictions such as antidumping duties, changes in U.S. and foreign governmental regulations, the difficulty of enforcing agreements and collecting receivables through certain foreign local systems, foreign customers may have longer payment cycles than customers in the U.S., more expansive legal rights of foreign unions, tariffs and other trade barriers, the potential for nationalization of enterprises, foreign exchange risk and other political, economic and social instability.

TriMas Investment

We have a fully diluted interest of approximately 24% in the common stock of TriMas. The following is a brief description of TriMas. A discussion of certain terms of the stock purchase agreement providing for the TriMas divestiture and our shareholders agreement with Heartland and the other investors relating to our continuing interest in TriMas is included in Note 6, Equity Investments and Receivables in Affiliates, and Note 28, Related Party Transactions, to the Company's audited consolidated financial statements included herein.

TriMas is a manufacturer of highly engineered products serving niche markets in a diverse range of commercial, industrial and consumer applications. While serving diverse markets, most of TriMas' businesses share important characteristics, including leading market shares, strong brand names, established distribution networks, high operating margins and relatively low capital investment requirements. For the year ended December 31, 2004, TriMas' net sales were approximately $1,045 million.

TriMas operated as an independent public company from 1989 through 1997. During such period, its sales increased through acquisitions and organic growth from $221 million to $668 million and it experienced average EBITDA margins in excess of 20% and average capital expenditure levels of less than 5% of net sales. In 1998, TriMas was acquired by Metaldyne. In early 2001, TriMas hired a new senior management team to increase its operating efficiency and develop a focused growth strategy. We believed that as an independent company, TriMas would be better able to capitalize on its core manufacturing strengths and significant cash flow generation capacity to exploit growth opportunities.

TriMas' businesses are organized into four operating segments: Rieke Packaging Systems, Cequent Transportation Accessories, Industrial Specialties and Fastening Systems.

Rieke Packaging Systems.    Rieke is a leading designer and manufacturer of specialty, highly engineered closures and dispensing systems for a range of niche end-markets, including steel and plastic industrial and consumer packaging applications. TriMas believes that Rieke is one of the largest manufacturers of steel and plastic industrial container closures and dispensing products in North America and also has a significant presence in Europe and other international markets. Rieke Packaging Systems' brand names include Rieke^®, TOV^®, Englass^TM and Stolz^TM. TriMas believes that Rieke's market

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position is the result of proprietary engineering and manufacturing technologies, patent protections and strong customer relationships. Approximately 50% of Rieke's 2003 net sales and 70% of Rieke's operating profit relate to products utilizing its patented processes or technology. TriMas believes that Rieke has significant opportunities to introduce its industrial design technologies to a range of consumer products and pharmaceutical applications.

Cequent Transportation Accessories.    Cequent is a leading designer, manufacturer, marketer and distributor of a wide range of accessories and cargo management products used to outfit and accessorize light trucks, sport utility vehicles, or SUV's, recreational vehicles, passenger cars and trailers for commercial and recreational use. Cequent's products include towing and hitch systems, trailer components, electrical products, brake systems, cargo racks, and additional towing and trailering components and accessories. Cequent owns and benefits from strong brand names, including Draw-Tite^®, Reese^®, Hidden Hitch^®, Tekonsha^®, Fulton^®, Wesbar^®, Bulldog^®, Bargman^®, Hayman-Reese^TM and ROLA^TM. Cequent is also a leading supplier of cargo management and vehicle protection products sold under trade names such as Highland The Pro's Brand^®. We believe Cequent's competitive strengths, relative to others in the fragmented industry in which it operates, include products with leading market positions, strong brand names, a diverse product portfolio, multiple distribution channels, and a vertically integrated manufacturing capability. Cequent is pursuing growth through new product introductions, selling products across distribution channels, or cross-selling, providing bundled cargo management solutions and organic and acquisition cost savings opportunities.

Industrial Specialties.    The Industrial Specialties segment companies design and manufacture a range of products, including cylinders, flame-retardant facings and jacketings, specialty tape products, industrial gaskets, precision tools, specialty industrial engines, military shell casings and other products for use primarily in niche industrial end-markets, including the construction, commercial, energy, medical and defense markets. The companies and brands include Compac^TM Corporation, Lamons^® Gasket, Norris Cylinder, Arrow^® Engine, NI Industries and Precision Tool Company which sells products under the Keo^® Cutters, Richards Micro-Tool and Reska brands. Each of the companies within this diversified segment supplies highly engineered and customer-specific products, provides value-added design and other services and serves niche markets supplied by a limited number of companies. TriMas believes the Industrial Specialties segment has opportunities to make strategic acquisitions, expand its product and customer portfolio and generate savings from the recent rationalization of certain operations.

Fastening Systems.    The Fastening Systems segment companies manufacture a wide range of engineered fasteners utilized by thousands of end-users in diverse markets such as agricultural, construction and transportation equipment and fabricated metal products, commercial and industrial maintenance and aerospace. We operate two lines of business in Fastening Systems. They are Lake Erie Products, which produces a variety of products and is a leading manufacturer of large diameter bolts, and Monogram Aerospace Fasteners, which is a leader in the development of blind bolt fasteners for the aerospace industry. We believe this segment has opportunities to grow through new product introductions in our Monogram Aerospace business and improving general economic activity, and as a result of recent restructuring activities at Lake Erie Products.

Access to Company Information

We make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports through our website, www.metaldyne.com. This information is available as soon as reasonably practicable after such material is electronically filed with the U.S. Securities and Exchange Commission.

Item 2.    Properties.

Our principal manufacturing facilities range in size from approximately 10,000 square feet to 1,000,000 square feet, approximately half of which are owned by us. The leases for our manufacturing facilities have initial terms that expire from 2004 through 2023 and are all renewable, at our option, for various terms, provided that we are not in default thereunder. Substantially all of our owned U.S. real properties are subject to liens under our credit facility or industrial revenue bonds. Our executive and

17

business unit headquarter offices are located in various buildings in Plymouth, Michigan and are leased under separate leases that expire at various dates through 2020. Our buildings, machinery and equipment have been generally well maintained, are in good operating condition and are adequate for current production requirements.

Since December 2000, we have entered into a number of sale-leaseback transactions with respect to 17 real properties in the United States. Pursuant to the terms of each sale-leaseback transaction, we transferred title of the real property locations to a purchaser and, in turn, entered into separate leases with the purchasers having various lease terms. With respect to the purchaser of all except for four of these properties, the renewal option must be exercised with respect to all, and not less than all, of the property locations. As to the other four properties, which include our Plymouth, Michigan headquarters, each renewal option may be exercised separately. Rental payments are due monthly. All of the foregoing leases are being accounted for as operating leases. As a result of the Livonia Fittings business disposition to TriMas, we are subleasing our Livonia, Michigan facility to TriMas. We anticipate sublease payments will equal our cash obligations in respect of such facility but we will remain responsible for payments to the lessor. A failure by TriMas to meet its obligations would adversely impact us.

Since December 2000, we have entered into a number of sale-leaseback arrangements with respect to equipment located at various of our manufacturing facilities. The term of each lease ranges from 3.5 years to 8.5 years with rental payments due monthly. In some cases, we have options to renew our leases once for two years and, in other cases, we have three renewal option periods of one year each. Upon expiration of the term or any applicable renewal term of each lease, we have the option to purchase the equipment for its fair market value at the time of the expiration of the lease. The equipment sale-leaseback transactions with GECC, Merrill Lynch Capital, Key Bank, Renaissance Capital Alliance and GMAC have been accounted for as operating leases.

The following list sets forth the location of our principal owned and leased manufacturing facilities (except where noted as otherwise) and identifies the principal operating segment utilizing such facilities. We have identified the operating segments for which we conduct business at these facilities as follows: (1) Chassis, (2) Driveline and (3) Engine.

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North America
Illinois				Niles* (2)
Indiana				Bluffton* (2), Fort Wayne (2), Fremont* (3), New Castle (1) and North Vernon* (3)
Georgia				Rome* (Subleased to third party)
Michigan				Detroit (2), Farmington Hills (2), Fraser* (2), Green Oak Township* (3), Hamburg (3), Litchfield (3), Middleville* (3), Royal Oak (2), Troy (2) and Warren* (3)
North Carolina				Greenville (1) and Greensboro* (2)
Ohio				Bedford Heights (2), Canal Fulton* (2), Edon* (1), Minerva* (2), Solon* (2) and Twinsburg* (2)
Pennsylvania				Ridgway (3) and St. Mary's (3)
Foreign
Brazil				Indaiatuba* (3)
Canada				Thamesville (3)
China				Shanghai (Sales Location)* (3)
Czech Republic				Oslavany (2)
United Kingdom				Halifax (3)
France				Lyon (3)
Germany				Dieburg (3), Nuremberg (2) and Zell am Harmersbach (2)
India				Jamshedpur** (3)
Italy				Poggio Rusco (2)
Japan				Yokohama (Sales Location)* (3)
Mexico				Iztapalapa (3) and Ramos Arizpe (3)
South Korea				Pyongtaek** (3)
Spain				Barcelona (3) and Valencia (3)

*	Denotes a leased facility.

**	Denotes a facility representing a joint venture.

Item 3.    Legal Proceedings.

There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party, or of which any of our property is subject.

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

Not applicable.

Item 4A.	Executive Officers of the Registrant (Pursuant to Instruction 3 to Item 401(b) of Regulation S-K).

The following table sets forth certain information regarding our current directors and executive officers.

Name				Age				Position
Timothy D. Leuliette				54				President and Chief Executive Officer and Chairman of the Board of Directors
Jeffrey M. Stafeil				35				Executive Vice President and Chief Financial Officer
Thomas V. Chambers				61				President, Engine Group
Joseph Nowak				54				President, Chassis Group
Karen A. Radtke				51				Vice President and Treasurer
Thomas A. Amato				41				Executive Vice President Commercial Operations

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Timothy D. Leuliette.    Mr. Leuliette was elected as one of our directors in November 2000 and currently serves as our Chairman of the Board and President and Chief Executive Officer. Mr. Leuliette was elected chairman of the Board effective April 1, 2002 and became our President and Chief Executive Officer on January 1, 2001. He is a Senior Managing Director and one of the co-founders of Heartland. In 1996, Mr. Leuliette joined Penske Corporation as their President and Chief Operating Officer to address operational and strategic issues. From 1991 to 1996, he served as President and Chief Executive officer of ITT Automotive. He also serves on a number of corporate and charitable boards, including Collins & Aikman and TriMas Corporation, and served as a director of The Federal Reserve Bank of Chicago, Detroit Branch.

Jeffrey M. Stafeil.    Mr. Stafeil has served as our Executive Vice President and Chief Financial Officer since July 2003 and previously served as our Vice President and Corporate Controller from February 2001 to July 2003. In addition, he is a Senior Managing Director of Heartland. From July 1998 until joining Heartland in 2000, he was a consultant with Booz, Allen & Hamilton. Mr. Stafeil has also held a variety of positions with Peterson Consulting, Mobil Corporation and Ernst & Young LLP.

Thomas V. Chambers.    Mr. Chambers has served as the President of our Engine Group since August 2004. Prior to joining us, he served as the President of Piston Automotive from January 2000 to December 2003. Prior to that, Mr. Chambers served as the Managing Director of Operations, Americas at GKN Driveline from November 1998 to December 2000. In addition, Mr. Chambers also served in a variety of positions at ITT Automotive and General Motors and has over 40 years of experience in all phases of product development and manufacturing.

Joseph Nowak.    Mr. Nowak has served as the President of our Chassis Group since November 2001. After joining MascoTech in 1991, he served as MascoTech's Vice President of Operations, President of Industrial Components, and President and General Manager Tubular Products. Mr. Nowak has over 25 years of manufacturing experience in automotive and industrial markets, and has held positions with Kelsey-Hayes/Varity and Ford Motor Company.

Karen A. Radtke.    Ms. Radtke has served as our Vice President and Treasurer since August 2001. She previously served as Treasurer and Corporate Secretary for ASC Exterior Technologies from 1997 to 2001. Prior to that, she was Treasurer of Gelman Sciences, Inc. and Hayes Lemmerz International Inc.

Thomas A. Amato.    Mr. Amato has served as our Executive Vice President Commercial Operations since January 2005 and previously served as our Vice President, Corporate Development from September 2001 to January 2005. After joining Masco Corporation in May 1994 and being assigned to MascoTech as its Manager of Business Development, he transferred to MascoTech in 1996 and became its Director of Corporate Development. In May 2001, Mr. Amato became the Vice President, Corporate Development of TriMas Corporation, which at the time was our wholly owned subsidiary. He is responsible for all of our merger, acquisition, alliance, divestiture, and joint venture activities. Mr. Amato served on the board of directors of NC-M Chassis Systems, LLC, a joint venture between DaimlerChrysler and Metaldyne, and also served on the board of Innovative Coatings Technologies, LLC.

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PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

No trading market for the Company's common stock exists. We did not pay dividends in 2004 or 2003 on our common stock and it is current policy to retain earnings to repay debt and finance our operations and acquisition strategies. In addition, our credit facility restricts the payment of dividends on common stock. See the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources" included in Item 7 of this report and Note 11, Long-Term Debt, to the Company's audited consolidated financial statements, included in Item 8 of this report.

On March 15, 2005, there were approximately 660 holders of record of our common stock.

The table below sets forth information as of January 2, 2005 with respect to compensation plans under which Metaldyne Corporation equity securities are authorized for issuance:

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in Column A)

Plan Category

Column A

Column B

Column C

Equity compensation plans approved by security holders

2,735,570

$

10.57

2,224,430

Item 6.    Selected Financial Data.

The following table sets forth summary consolidated financial information of the Company, for the years and dates indicated. As discussed elsewhere in this report, an Independent Investigation into certain accounting matters at the Company was completed in late September 2004. The Company's financial statements for fiscal 2002 have been restated to reflect adjustments to the Company's previously reported financial information on Form 10-K for fiscal years 2001 and 2002. While certain of the matters that are the subject of the restatement would affect periods prior to 2001, the Company has not investigated or presented the 11-month period prior to the acquisition of the Company in November 2000 in the "Selected Financial Data" tables in this Form 10-K below, as required by Regulation S-K of the Commission under the Securities Act. The Company has omitted such financial data due to the material difficulties the Company has encountered in determining the adjustments necessary to prepare the financial statements for this period. The Company has requested a waiver of the requirement for such information from the Securities and Exchange Commission. While the Company believes information for such pre-acquisition periods would be less relevant due to changes in the Company's basis of accounting following the acquisition, the non-comparability of such information as a consequence of subsequent transactions and different strategies and management, and the passage of time, readers are cautioned that such information is required by the Commission's rules and regulations. Moreover, readers are cautioned that the Company has requested relief from the Commission from this requirement and it is possible that the Staff may not grant such relief, in which case the Company may be required to amend this report to include such information. However, because the necessary financial information from these periods prior to the Company's recapitalization date are not available, it is uncertain whether the Company could comply with such a requirement.

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				(In thousands except per share amounts)
				2004				2003				2002				2001				11/28/00 - - 12/31/00
Net sales				$	2,004,260			$	1,508,200			$	1,792,200			$	2,127,390			$	104,770
Net loss				$	(27,990	)		$	(75,330	)		$	(64,760	)		$	(42,780	)		$	(27,090	)
Loss per share before cumulative effect of change in accounting principle				$	(0.65	)		$	(1.98	)		$	(0.87	)		$	(1.14	)		$	(0.78	)
Loss per share				$	(0.65	)		$	(1.98	)		$	(1.73	)		$	(1.14	)		$	(0.78	)
Dividends declared per common share					—				—				—				—				—
At January 2, 2005, December 28, 2003, December 29, 2002 and December 31, 2001 and 2000:
Total assets				$	2,194,750			$	2,011,860			$	2,017,990			$	2,946,760			$	2,991,280
Long-term debt, net (a)				$	855,450			$	766,930			$	669,020			$	1,359,250			$	1,426,570
Redeemable preferred stock				$	149,190			$	73,980			$	64,510			$	55,160			$	33,370

(a)	See Note 11, Long-Term Debt, to the Company's audited consolidated financial statements (net of current portion).

Results in 2004 include the New Castle facility since the December 31, 2003 acquisition.

Results in 2004 include the Bedford Heights, Ohio and Rome, Georgia facilities through the February 1, 2004 asset sale pursuant to which substantially all of the business associated with two of the aluminum die casting facilities in our Driveline segment was sold to Lester PDC, Ltd. These facilities had 2003 combined sales of approximately $62 million and an operating loss of approximately $14 million. In November 2004, Lester PDC discontinued operations at the Bedford Heights facility and, as a result, we assumed production of some of the products at the Bedford Heights facility that were subject to the terminated supply agreement.

Results in 2003 include the Fittings division through May 9, 2003, at which time it was sold to TriMas for $22.6 million plus the assumption of an operating lease.

Results in 2002 reflect a net loss of $64.8 million, which includes the cumulative effect of a change in recognition and measurement of goodwill impairment related to TriMas. A loss of $28.1 million was recorded before this change in accounting principle.

As more fully described in Note 6 to the Company's audited consolidated financial statements, we sold TriMas Corporation common stock to Heartland and other investors on June 6, 2002. TriMas is included in our financial results through the date of this transaction. Effective June 6, 2002, we account for our investment in TriMas under the equity method of accounting. Our present ownership interest in TriMas is 24%.

Results in 2001 and for the one-month period ended December 31, 2000 include the retroactive adoption of purchase accounting for our acquisition by Heartland and its co-investors. The predecessor company information for the periods prior to November 28, 2000 is not provided due to the reasons identified above.

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

Executive Summary

We are a leading global manufacturer of highly engineered metal components for the global light vehicle market with 2004 sales of approximately $2 billion. We operate three segments focused on the global light vehicle market. The Chassis, Driveline and Engine segments manufacture, design, engineer and assemble metal-formed and precision-engineered components and modular systems used in the

22

transmissions, engines and chassis of vehicles. We serve approximately 200 automotive and industrial customers and our top ten customers represent approximately 67% of total 2004 sales. Prior to November 2000, we were a public company. Since we were acquired in November 2000 by a private investor group, we have actively pursued opportunities for internal growth and strategic acquisitions that were unavailable to us when the majority of our shares were publicly traded. Since November 2000, we have completed four acquisitions — Simpson in December 2000, GMTI effective January 2001, Dana Corporation's Greensboro, NC operation in May 2003, and DaimlerChrysler's New Castle operation at the beginning of our fiscal 2004. Each of these acquisitions has added to the full service, integrated metal supply capabilities of our automotive operations. Additionally, we split off our non-automotive operations, divesting our former TriMas subsidiary in June 2002, our Fittings operation in April 2003 and two aluminum die casting facilities within our Driveline segment in February 2004. In December 2004, we resumed a small operation at one of these two aluminum die casting facilities due to the independent investor's bankruptcy in 2004.

In each of the last three years we have experienced significant net losses. Our net losses for 2004, 2003 and 2002 were $27.8 million, $75.3 million and $64.8 million, respectively. Our 2004 losses declined in part due to the results of our recent New Castle acquisition and benefits associated with our cost restructuring efforts, but were negatively impacted by a 2.6% decline in production from our three largest customers, an approximate $20 million net negative impact from material cost increases described below, approximately $18 million in fees and expenses related to the Independent Investigation and a $7.6 million non-cash loss on the disposition of two manufacturing facilities within our Driveline segment. For additional discussion of these factors, see the "Results of Operations" discussion.

Key Factors Affecting our Reported Results

We operate in extremely competitive markets. Our customers select us based upon numerous factors including technology, quality and price as discussed under Item 1, Business - Competition. Supplier selection is generally finalized several years prior to the start of vehicle production and as a result, business that we win will generally not start production for two years or beyond. In addition, our results are heavily dependent on global vehicle production, and in particular the North American vehicle production of the Big 3 domestic manufacturers (GM, Ford, and DaimlerChrysler). Our customers generally require that we offer annual productivity and efficiency related price decreases on products we sell them. Critical factors to be successful in this market include global low cost production facilities, leading service and parts quality, and differentiated product and process technology. Accordingly, we focus on managing our global manufacturing footprint in line with our customer needs and local market manufacturing cost differences, improving operating efficiency and production quality of our plants, fixing or eliminating unprofitable facilities and reducing our overall material costs. In addition, we spend considerable time and resources developing new technology and products to enhance performance and/or decrease cost of the products we sell to our customers. See "Results of Operations" for more details as to the factors that affect year over year performance.

The rise in material costs, especially steel, continues to negatively impact our results. This and other increases in our raw material costs increased our cost of goods sold by approximately $53 million for fiscal 2004 (approximately $35 million related to steel increases). Note that the steel price increases primarily relate to our Forgings operations within the Driveline segment while the remaining increases are spread across all of our other businesses and are related to numerous raw material increases such as energy, molybdenum and casting components we purchase. However, we were able to recover approximately $31 million of this increase through scrap sales, a decrease in our annual productivity/price reductions given to our customers, steel resourcing efforts and negotiated or contractual price recovery from our customers. Our ability to fully execute this recovery on a going forward basis is not guaranteed. Additionally, it appears that raw material costs will continue to increase in 2005 and although we have initiatives in place to offset these expected increases, there is no guarantee that these efforts will be successful.

Our strategy is centered on growth through new business awards and acquisitions. As discussed in Item 1, Business, we have a significant new project backlog and have completed several recent acquisitions that we believe will enable us to better serve our customer base and provide enhanced returns

23

for our stakeholders. In order to finance a large portion of this activity, we incurred significant new debt. As such, we have substantial leverage and are constrained by various covenant limitations (see "—Financial Covenants" for more details surrounding these covenants). As we continue to invest in the resources to produce our new business backlog and thus grow our business, a significant portion of our operating cash flow will be used to buy new capital equipment, expand production capacity and invest in new technology in addition to servicing principal and interest payments on our debt obligations. Therefore, we are focused on our cash generation ability (we monitor this internally through "Adjusted EBITDA." See the discussion below in "Key Performance Indicators (Non GAAP Financial Measures)" for further explanation), and working capital and fixed asset efficiency to assess our ability to favorably finance our new business backlog.

Net sales for 2004 were $2,004 million versus $1,508 million for 2003. The primary source of the increase in our 2004 sales was our New Castle acquisition, which contributed approximately $446 million for the year. In addition, we had approximately $81 million in additional volume related to new product launches and ramp up of existing programs as well as a $29 million benefit from foreign exchange movements. However, these increases were partially offset by approximately $60 million related to the divestiture of two aluminum die casting facilities within our Driveline segment and a 2.6% decrease in North American vehicles production from our three largest customers (Ford, GM and DaimlerChrysler). Operating profit increased to $29 million in 2004 from $20 million in 2003. The increase in 2004 operating profit is primarily the result of the New Castle acquisition, which contributed approximately $21 million for the year; an approximate $12 million decrease in fixed asset losses; an approximate $10 million decrease in restructuring charges; $5 million from foreign exchange movements; and an approximate $11 million increase in our Engine segment driven primarily by increased sales activity due to new product launches. Negatively offsetting these increases was approximately $18 million in fees and expenses related to the Independent Investigation, an approximate $19 million decline in our North American forging operations and a $7.6 million charge taken in connection with the divestiture of two manufacturing facilities within our Driveline segment.

Key Indicators of Performance (Non-GAAP Financial Measures)

In evaluating our business, our management considers Adjusted EBITDA as a key indicator of financial operating performance and as a measure of cash generating capability.

We define Adjusted EBITDA as net income (loss) before cumulative effect of accounting change and before interest, taxes, depreciation, amortization, asset impairment, non-cash losses on sale-leaseback of property and equipment and non-cash restricted stock award expense. In evaluating Adjusted EBITDA, our management deems it important to consider the quality of our underlying earnings by separately identifying certain costs undertaken to improve our results, such as costs related to consolidating facilities and businesses in an effort to eliminate duplicative costs or achieve efficiencies, costs related to integrating acquisitions and restructuring costs related to expense reduction efforts. Although our consolidation, restructuring and integration efforts are continuing and driven in part by our acquisition activity, our management eliminates these costs to evaluate underlying business performance. Caution must be exercised in eliminating these items as they include substantially (but not necessarily entirely) cash costs and there can be no assurance that we will ultimately realize the benefits of these efforts. Moreover, even if the anticipated benefits are realized, they may be offset by other business performance or general economic issues.

By selecting Adjusted EBITDA, management believes that it is the best indicator (together with a careful review of the aforementioned items) of our ability to service and/or incur indebtedness as we are a highly leveraged company. We use Adjusted EBITDA as a key performance measure because we believe it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and the impact of purchase accounting and SFAS No. 142 (affecting depreciation and amortization expense). Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we also use Adjusted EBITDA for business planning purposes, to incent and compensate our management personnel, as a measure of segment performance,

24

in measuring our performance relative to that of our competitors and in evaluating acquisition opportunities. In addition, we believe Adjusted EBITDA and similar measures are widely used by investors, securities analysts, rating agencies and other interested parties as a measure of financial performance and debt-service capabilities. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•	It does not reflect our cash expenditures for capital equipment or contractual commitments;

•	Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements;

•	It does not reflect changes in, or cash requirements for, our working capital needs;

•	It does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;

•	It includes amounts resulting from matters we consider not to be indicative of underlying performance of our fundamental business operations, as discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations;" and

•	Other companies, including companies in our industry, may calculate these measures differently than we do, limiting their usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally. We carefully review our operating profit margins (operating profit as a percentage of net sales) at a segment level, which are discussed in detail in our year-to-year comparison of operating results.

The following is a reconciliation of our Adjusted EBITDA to net loss for the three years ended January 2, 2005, December 28, 2003 and December 29, 2002:

				(In thousands)
				2004				2003				2002
Net loss				$	(27,990	)		$	(75,330	)		$	(64,760	)
Income tax benefit					(36,870	)			(8,660	)			(40,960	)
Interest expense					82,140				75,510				91,000
Depreciation and amortization in operating profit					132,100				106,350				107,430
Non-cash stock award expense					560				3,090				4,880
Preferred stock dividends and accretion					19,900				—				—
Non-cash gain on maturity of interest rate arrangements					(6,570	)			—				—
Loss on disposition of manufacturing facilities					7,600				—				—
Loss on repurchase of debentures and early retirement of term loans					—				—				68,860
Loss on interest rate arrangements upon early retirement of term loans					—				—				7,550
Asset impairment					—				4,870				—
Gain on disposition of TriMas and Saturn investments					(8,020	)			—				—
Cumulative effect of accounting change					—				—				36,630
Equity(gain) loss from affiliates, net					(1,450	)			20,700				1,410
Certain items within Other, Net (1)					9,270				7,470				10,590
Total Company Adjusted EBITDA				$	170,670			$	134,000			$	222,630

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(1)	Reconciliation of Other Expense:

				(In thousands)
				2004				2003				2002
Items excluded from Adjusted EBITDA (amortization of financing fees and A/R securitization fees)				$	9,270			$	7,470			$	10,590
Items in Adjusted EBITDA (includes foreign currency, royalties and interest income)					(1,000	)			610				(1,610	)
Total other, net				$	8,270			$	8,080			$	8,980

The following details certain items relating to our consolidation, restructuring and integration efforts and other charges not eliminated in determining Adjusted EBITDA, but that we would eliminate in evaluating the quality of our Adjusted EBITDA:

				(In thousands)
				2004				2003				2002
Restructuring charges				$	(2,750	)		$	(13,130	)		$	(3,470	)
Fixed asset disposal losses					(3,180	)			(14,870	)			(750	)
Foreign currency gains (losses)					(940	)			(1,010	)			(200	)
Independent investigation fees					(17,830	)			—				—

Functional and Divisional Realignments

During the first quarter of 2003, we made a decision to realign our European facilities into two distinct groups operating within the Driveline and Engine segments. As part of this realignment, we moved one facility from the Chassis segment into the Engine segment thereby streamlining both the operational and financial management of the facility. In addition, a small tooling facility previously residing in the Driveline segment was transferred into the Engine segment as the Engine segment represented the largest portion of the tooling facilities business. Since these transfers occurred in 2003, we have reflected the transfer of the facilities to the new segments in the comparative 2003 and 2002 amounts.

During the first quarter of 2004, we made a decision to move one of our domestic operations that had historically been part of the Engine segment to the Chassis segment. The 2003 amounts have been restated to reflect this transfer. However, as operations within this transferred facility were moved to other locations in 2003, 2002 amounts have not been restated.

Results of Operations

2004 Versus 2003

Net Sales.    Net Sales by segment and in total for the years ended January 2, 2005 and December 28, 2003 were:

				(In thousands)
Segment				Year Ended January 2, 2005				Year Ended December 28, 2003
Chassis Segment				$	583,620			$	143,590
Driveline Segment					784,460				790,750
Engine Segment					636,180				573,860
Total Company				$	2,004,260			$	1,508,200

Net sales for fiscal 2004 were $2,004 million versus $1,508 million for fiscal 2003. The primary driver of the increase in our 2004 sales was our New Castle acquisition, which contributed approximately $446 million for the year. In addition, we had approximately $81 million in additional volume related to new

26

product launches and ramp up of existing programs and a $29 million benefit from foreign exchange movements. There was also a net $5 million benefit to sales as the price increases to our customers related to increased material prices were not entirely offset by our productivity related price discounts offered to our customers. However, these increases were partially offset by approximately $60 million related to our divestiture of two aluminum die casting facilities within our Driveline segment and a 2.6% decrease in North American vehicle production from our three largest customers (Ford, General Motors and DaimlerChrysler).

Gross Profit.    Gross profit by segment and in total for the years ended January 2, 2005 and December 28, 2003 were:

				(In thousands)
Segment				Year Ended January 2, 2005				Year Ended December 28, 2003
Chassis Segment				$	32,450			$	11,880
Driveline Segment					58,250				68,860
Engine Segment					97,520				87,100
Corporate/centralized resources					(15,210	)			(12,310	)
Total Company				$	173,010			$	155,530

Our gross profit was $173 million or 8.6% of net sales for 2004 compared to $155.5 million or 10.3% of net sales for 2003. The increase of $17.5 million was primarily due to the $21 million contribution from the New Castle acquisition. In addition to the New Castle Acquisition, we also benefited from an approximate $12 million reduction in fixed asset losses, an approximate $11 million increase from our Engine operations driven primarily by additional sales volume and a $5 million benefit in foreign exchange fluctuations. Partially offsetting these increases was a $19 million decline in our Forgings operations (primarily related to a $30 million increase in steel costs during fiscal 2004 offset by approximately $15 million in price increases to our customers) and a $3 million one-time payment made to one of our customers relating to a new business award. Both of these items are further explained in the segment discussion that follows. In addition to these factors, we have also experienced net raw material cost increases (net of price increases associated with the recovery of material costs to our customers) across our other Driveline, Engine and Chassis operations of approximately $7 million.

Selling, General and Administrative.    Selling, general and administrative expense was $133.3 million or 6.6% of net sales for 2004, compared to $117.2 million or 7.8% of total net sales for 2003. The $16 million increase from 2003 to 2004 is primarily related to approximately $18 million of expense associated with the Independent Investigation. These expenses relate to fees paid to our bank group for waivers, professional fees and severance expense for individuals terminated as a result of the Independent Investigation. Selling, general and administrative expenses also benefited by an approximate $1.5 million pension curtailment gain related to the disposition of two manufacturing facilities discussed earlier and an approximate $0.5 million postretirement curtailment gain related to the elimination of benefits for salaried employees not grandfathered by having obtained age 50 with five years of service or 20 years of services as of January 1, 2003. The reduction in selling, general and administrative expenses as a percentage of net sales reflects the benefits from restructuring efforts initiated in 2003 and the fact that New Castle was able to integrate into our operation without significant additional administrative investment.

Depreciation and Amortization.    Depreciation and amortization expense by segment and in total for the years ended January 2, 2005 and December 28, 2003 and was:

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				(In thousands)
Segment				Year Ended January 2, 2005				Year Ended December 28, 2003
Chassis Segment				$	27,300			$	7,630
Driveline Segment					54,940				53,540
Engine Segment					39,290				35,980
Corporate/centralized resources					10,570				9,200
Total Company				$	132,100			$	106,350

The net increase in depreciation and amortization of approximately $25.8 million is principally explained by $18.6 million of depreciation and amortization expense associated with our New Castle acquisition. Additionally, for the past several years capital spending has been in excess of our depreciation expense. Thus, the additional capital spending primarily accounts for the remaining increase in depreciation expense.

Restructuring Charges.    We incurred approximately $2.8 million of restructuring costs in fiscal 2004 compared to $13.1 million incurred in fiscal 2003. Of the 2004 charges, approximately $1.8 million relates to our Driveline segment, where the majority of the charge relates to the closure of a facility in Europe and headcount reduction activities in our Forging operations. An additional $0.8 million relates to costs to reduce headcount in our Corporate center with the remaining amounts relating to headcount reductions of $0.1 million in each of our Chassis and Engine segments. Net restructuring activity for fiscal 2004 is as follows:

				(In thousands)
				Acquisition Related Severance Costs				2002 Additional Severance And Other Exit Costs				2003 Additional Severance And Other Exit Cost				2004 Additional Severance And Other Exit Costs				Total
Balance at December 28, 2003				$	1,380			$	360			$	7,310			$	—			$	9,050
Charges to expense					—				—				—				2,750				2,750
Cash payments					(310	)			(360	)			(4,600	)			(2,240	)			(7,510	)
Reversal of unutilized amounts					(360	)			—				—				—				(360	)
Balance at January 2, 2005				$	710			$	—			$	2,710			$	510			$	3,930

Asset Impairment.    In our fiscal 2003 analysis, we recorded a $4.9 million charge in our Driveline segment associated with two plants with negative operating performance in our fiscal 2003 financial results in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." Subsequent to December 28, 2003, these two facilities were sold to an independent third party. The sales price to this third party was used to determine the fair market value of the facilities for the SFAS No. 144 impairment analysis.

Disposition of Manufacturing Facilities.    In connection with our sale of the two aluminum die casting facilities in our Driveline segment discussed above, we incurred a $7.6 million loss for fiscal 2004. This loss represents a book value of approximately $12 million in fixed assets and deferred financing fees offset by the $4.1 million in cash consideration paid by Lester PDC for the assets. See Note 18, Disposition of Businesses, to the consolidated financial statements included herein for additional discussion.

Operating Profit.    Operating profit was $29.4 million for 2004 compared to $20.3 million in 2003. The $9.1 million increase in operating profit is the result of the $17.5 million increase in gross profit, the $16 million increase in selling general and administrative expenses, the net change between the $7.6 million loss on disposition of manufacturing facilities recorded in 2004 and the $4.9 million asset impairment charge taken in 2003 and the reduction of approximately $10 million in restructuring charges year over year. The elements of each of these variations are discussed in greater detail above.

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				(In thousands)
Segment				Year Ended January 2, 2005				Year Ended December 28, 2003
Chassis Segment				$	17,660			$	4,720
Driveline Segment					1,350				12,740
Engine Segment					57,000				45,800
Corporate/centralized resources					(46,600	)			(42,960	)
Total Company				$	29,410			$	20,300

Adjusted EBITDA.    Management reviews our segment operating results based upon the Adjusted EBITDA definition as discussed in the "Key Indicators of Performance (Non-GAAP Financial Measures)" section. Accordingly, we have separately presented such amounts in the table below. Adjusted EBITDA increased to $170.7 million in 2004 from $134 million in 2003. The primary drivers of this increase are explained above in the operating profit discussion and will be further detailed in the segment detail that follows. Additionally, in the "Segment Information" below provides a reconciliation between Adjusted EBITDA and operating profit.

				(In thousands)
Segment				Year Ended January 2, 2005				Year Ended December 28, 2003
Chassis Segment				$	44,960			$	12,350
Driveline Segment					64,070				71,590
Engine Segment					96,290				81,780
Corporate/centralized resources					(34,650	)			(31,720	)
Total Company				$	170,670			$	134,000
Memo: Fixed asset losses included in the calculation of both operating profit and Adjusted EBITDA				$	(3,180	)		$	(14,870	)
Memo: Other, net (income) expense included in the calculation of Adjusted EBITDA				$	(1,000	)		$	610

Interest Expense.    Interest expense increased by $6.6 million due to higher average debt levels in 2004 compared to 2003. This increase is principally due to $3.2 million in interest arising from the 10% senior subordinated notes from our New Castle acquisition, $13.2 million in interest arising from our 10% senior notes issued in October 2003 and approximately $7 million in interest arising from higher debt balances resulting from increased usage of our revolving credit and slightly increased borrowing rates on our senior debt facilities. These increases were offset by a decrease of $4.0 million in cash interest expense and $7.2 million of interest accretion related to the redemption of the $98.5 million outstanding balance on the 4.5% subordinated debentures that were paid off in December 2003 and $5.4 million in interest expense related to the maturity of our interest rate arrangements in February 2004.

Gain on the Maturity of Interest Rate Arrangements.    In the first quarter of 2004, we recorded a $6.6 million non-cash gain on the maturity of these interest rate arrangements which is reflected as a "non-cash gain on maturity of interest rate arrangements" in our consolidated statement of operations incorporated herein. See the "Liquidity and Capital Resources" section below for additional discussion of our capital structure.

Equity Gain (Loss) from Affiliates, Net.    Equity earnings (loss) from affiliates increased from a loss of $20.7 million to a $1.5 million gain in 2004 due to the operating results of our equity affiliates.

Gain on the Sale of Investments in Saturn and TriMas.    In addition to the equity earnings, we recognized a net gain of $8.0 million on the sale of our interest in Saturn Electronics, which was sold in December 2004, and a gain on the sale of a portion of our investment in TriMas to Masco Corporation which was sold in November 2004. Our equity earnings (loss) from affiliates reflect the change in ownership percentages based upon the date of the sales of the investments. See Note 6, Equity Investments and Receivables in Affiliates, to the consolidated financial statements included herein for additional discussion of the sale of both the Saturn and TriMas investment amounts.

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Other, Net.    Other, net increased by $0.2 million to a loss of $8.3 million in 2004 compared to a loss of $8.1 million in 2003. In conjunction with our 2004 credit facility amendment, $1.2 million of the unamortized balance related to the 2003 credit facility amendment was expensed in 2004. This increase in Other, net was partially offset by a gain on the disposition of a joint venture in Korea during the second quarter of 2004.

Preferred Stock Dividends.    Preferred stock dividends (including accretion of $1.1 million in 2004) were $19.9 million in 2004 as compared to $9.3 million in 2003. This increase is due to the dividends on the $64.5 million of preferred stock issued in connection with the New Castle acquisition and compounded interest on preexisting preferred stock. Due to our adoption of SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" as of the first quarter of 2004, preferred stock dividends are included in "other expense, net" on our consolidated statement of operations beginning in 2004.

Taxes.    The provision for income taxes for 2004 was a benefit of $36.9 million as compared to a benefit of $8.7 million for 2003. The primary reasons for the Company's effective tax rate being different from its statutory rate are non-deductible preferred stock dividends, reversal of a prior period contingent tax accrual, refunds, foreign losses for which tax benefits are not recognized and foreign tax rates below the U.S. rate as well as the provision for unremitted earnings of a foreign subsidiary. In addition, in July 2004, the Company received a $27 million tax refund from the IRS that resulted from a claim filed by the Company in 2002. This claim was based on a 2002 change in the U.S. Treasury Regulations, which permitted the Company to utilize a previously disallowed capital loss that primarily resulted from the sale of a subsidiary in 2000. The $7 million received in excess of the refund previously recorded was considered in the tax provision for fiscal 2004.

Segment Information

Chassis Segment.    Sales for our Chassis segment increased to $583.6 million in 2004 as compared to $143.6 million in 2003. The primary driver of the approximate $440 million increase in sales is a $446 million contribution from the New Castle acquisition offset by a $6 million decrease due to the divestiture of our Fittings business in May 2003. Operating income increased by approximately $12.9 million due primarily to the $21 million contribution from the New Castle acquisition (results are net of approximately $10 million in operating leases used to finance the acquisition) and an increase in fixed asset gains over the prior year by approximately $2.7 million offset by approximately $1.5 million from the divestiture of our Fittings operation, $2 million in customer pricing concessions, and $2 million in net raw material cost increases (net of price increases associated with the recovery of material costs to our customers). The remaining reduction is primarily driven by an increase in leasing expense of approximately $2 million, an increase of approximately $1.5 million in depreciation and amortization relating to the other Chassis entities than New Castle and a slight increase in administrative costs to support the materially increased size of the Chassis operations as a result of the New Castle acquisition. Adjusted EBITDA increased by approximately $33 million in 2004 compared to 2003 due to the aforementioned explanations and an increase of $19.7 million in depreciation and amortization primarily related to the New Castle acquisition.

				(In thousands)
Chassis Segment				Year Ended January 2, 2005				Year Ended December 28, 2003
Sales				$	583,620			$	143,590
Operating profit				$	17,660			$	4,720
Depreciation and amortization					27,300				7,630
Adjusted EBITDA				$	44,960			$	12,350
Memo: Fixed asset (gains) losses included in calculation of both operating profit and Adjusted EBITDA				$	(1,620	)		$	1,080

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Driveline Segment.    Sales for our Driveline segment were $784.5 million in 2004 as compared to $790.8 million in 2003. Sales decreased by approximately $60 million related to the divestiture of two aluminum die casting facilities, but were offset by a $16 million benefit in foreign exchange fluctuations, a $33 million benefit from new launches and ramp up of existing business and approximately $3 million in net price increases (net of price increases associated with the recovery of material costs to our customers and net of productivity related price concessions to our customers) incurred in fiscal 2004.

				(In thousands)
Driveline Segment				Year Ended January 2, 2005				Year Ended December 28, 2003
Sales				$	784,460			$	790,750
Operating profit				$	1,350			$	12,740
Asset impairment					—				4,870
Loss on disposition of manufacturing facilities					7,600				—
Depreciation and amortization					54,940				53,540
Legacy stock award expense					180				440
Adjusted EBITDA				$	64,070			$	71,590
Memo: Fixed asset losses included in calculation of both operating profit and Adjusted EBITDA				$	1,330			$	6,550

Operating profit decreased by approximately $11 million as cost savings and profits from new business were not able to fully offset the approximate $19 million year over year decline in the Forging operations (primary issue was an approximate $30 million increase in the price to procure steel during fiscal 2004 as compared to fiscal 2003 offset by approximately $15 million in price increases to our customers). In addition, our Driveline segment's operating margins were negatively impacted by a $7.6 million loss on the disposition of two aluminum die casting manufacturing facilities, approximately $2 million in net raw material price increases in other non-forging Driveline operations and a $3 million one-time payment made to one of our customers relating to a new business award. Offsetting these amounts in 2004 were a $5.2 million decrease in fixed asset losses, a $6.6 million improvement through the disposition of two aluminum die casting manufacturing facilities, a reduction in restructuring charges and a $3.4 million benefit in foreign exchange fluctuations. The remaining improvement is primarily explained by cost reduction efforts. Adjusted EBITDA decreased by approximately $7.5 million in 2004 compared to 2003 due to the above reasons.

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Engine Segment.    Sales for our Engine segment were $636.2 million in 2004 as compared to $573.9 million in 2003. The $62.3 million increase primarily reflects $48 million in additional volume from new product launches and an approximate $13 million benefit related to foreign exchange movements. Operating profit increased by $11.2 million due primarily to $11 million from increased sales volume on new programs, a decrease in fixed asset losses of approximately $3 million in 2004 versus 2003, a reduction in restructuring charges from 2003 of approximately $1.9 million and an approximate $1.3 million benefit related to foreign exchange movements. Offsetting these amounts was approximately $3.1 million of net material cost increases (net of price increases associated with the recovery of material costs to our customers) and incremental depreciation and amortization expense of $3.3 million. Adjusted EBITDA increased by approximately $14.5 million in 2004 compared to 2003 due to the aforementioned reasons.

				(In thousands)
Engine Segment				Year Ended January 2, 2005				Year Ended December 28, 2003
Sales				$	636,180			$	573,860
Operating profit				$	57,000			$	45,800
Depreciation and amortization					39,290				35,980
Adjusted EBITDA				$	96,290			$	81,780
Memo: Fixed asset losses included in calculation of both operating profit and Adjusted EBITDA				$	2,260			$	5,070

Corporate/Centralized Resources.    Adjusted EBITDA for Corporate/Centralized Resources was a loss of $34.7 million in 2004 versus a loss of $31.7 million in 2003. We incurred approximately $18 million of expenses associated with our Independent Investigation. After considering these expenses, corporate expenses decreased by approximately $15 million. The reduction is principally explained by a $5.0 reduction in restructuring charges in 2004, pension and postretirement curtailment gains of approximately $2.0 million in 2004 and discussed further in Note 24. Employee Benefit Plans, to the consolidated financial statements included herein, a decrease in fixed asset losses of $1 million in 2004 and a decrease of $1.6 million in Other, Net. The remaining decrease in Corporate costs primarily relates to a reduction in overall expenses in part related to restructuring events initiated in 2003. Operating profit decreased by $3.6 million, which is also explained in the factors described above and a $1.4 million increase in depreciation and amortization and a $2.3 million decrease in stock award expense.

				(In thousands)
Corporate/Centralized Resources				Year Ended January 2, 2005				Year Ended December 28, 2003
Operating profit				$	(46,600	)		$	(42,960	)
Depreciation and amortization					10,570				9,200
Stock award expense					380				2,650
Other, net					1,000				(610	)
Adjusted EBITDA				$	(34,650	)		$	(31,720	)
Memo: Fixed asset losses included in calculation of both operating profit and Adjusted EBITDA				$	1,210			$	2,170
Memo: Other, Net (income) expense included in calculation of Adjusted EBITDA				$	(1,000	)		$	610

2003 Versus 2002

Due to the divestiture of our former TriMas subsidiary in June 2002, the 2002 and 2003 consolidated results are not comparable. Thus, for purposes of our discussion, we will exclude TriMas results, where applicable and quantifiable, and discuss the performance of our Automotive Group operations.

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Net Sales.    Net Sales by segment and in total for the years ended December 28, 2003 and December 29, 2002 were:

				(In thousands)
Segment				Year Ended December 28, 2003				Year Ended December 29, 2002
Chassis Segment				$	143,590			$	143,650
Driveline Segment					790,750				807,010
Engine Segment					573,860				512,960
Automotive Group				$	1,508,200			$	1,463,620
TriMas Group					—				328,580
Total Company				$	1,508,200			$	1,792,200

Despite a 6.4% decrease in NAFTA production, sales increased $45 million, but were essentially flat after adjusting for a $44 million impact of exchange rate movement. The specific differences are further explained in the segment information section.

Gross Profit.     Gross profit by segment and in total for the years ended December 28, 2003 and December 29, 2002 were:

				(In thousands)
Segment				Year Ended December 28, 2003				Year Ended December 29, 2002
Chassis Segment				$	11,880			$	16,850
Driveline Segment					68,860				104,340
Engine Segment					87,100				75,770
Corporate/centralized resources					(12,310	)			(4,100	)
Automotive Group				$	155,530			$	192,860
TriMas Group					—				100,780
Total Company				$	155,530			$	293,640

Our gross profit was $155.5 million or 10.3% of net sales for 2003 compared to $192.9 million or 13.2% of net sales for 2002 after adjustment for TriMas. The decrease of $37.4 million was primarily due to incremental depreciation and amortization expense of approximately $14.9 million, increased steel prices of approximately $7 million, incremental losses on the sale and disposal of fixed assets of approximately $15 million and incremental lease expense of approximately $5 million associated with additional sale-leaseback transactions entered into in late 2002 and 2003. Offsetting these decreases was approximately $10.6 million of positive exchange movement primarily due to the appreciation of the euro relative to the dollar. The remaining difference is primarily explained by a reduction in our Driveline margin. This margin reduction is primarily explained by aggressive pricing given to our customers in response to their global sourcing initiatives.

Selling, General and Administrative.    Selling, general and administrative expense was $117.2 million, 7.8% of net sales for 2003, compared to $126.9 million, 8.7% of total net sales for 2002 after adjustment of TriMas. Approximately $4 million of the decrease in selling, general and administrative costs include a $2.5 million curtailment gain recognized in conjunction with a pension plan amendment for our Bedford Heights, Ohio plant which was sold in February 2004 and $1.6 million in reduced restricted stock award amortization. The remaining decrease in 2003 reflects the reduction in costs resulting from our shared services initiative that we undertook to centralize standardized processes and reduce redundant costs throughout 2001 and 2002 (e.g. capability in sales, procurement, IT infrastructure, finance expertise, etc), the restructuring benefits recognized from the Engine segment's 2002 and 2003 European and North American reorganization and 2003 restructuring activities in our Driveline segment. These initiatives have enabled us to streamline and better manage our administrative functions from a consolidated perspective.

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Depreciation and Amortization.    Depreciation and amortization expense by segment and in total for the years ended December 28, 2003 and December 29, 2002 was:

				(In thousands)
Segment				Year Ended December 28, 2003				Year Ended December 29, 2002
Chassis Segment				$	7,630			$	5,330
Driveline Segment					53,540				45,480
Engine Segment					35,980				30,630
Corporate/centralized resources					9,200				9,990
Automotive Group				$	106,350			$	91,430
TriMas Group					—				16,000
Total Company				$	106,350			$	107,430

The net increase of Automotive Group depreciation and amortization of approximately $14.9 million is due to depreciation expense recorded on capital expenditures for the periods presented of $130.7 million for 2003 and $116.5 million for 2002. In the past several years, we have incurred capital spending in excess of our depreciation expense. Thus, the additional capital spending accounts for the increase in depreciation expense.

Restructuring Charges.    In fiscal 2003, we entered into several restructuring actions whereby we incurred approximately $13.1 million of costs associated with severance and facility closures. These actions include the completion of the Engine segment's European operation reorganization that was initiated in fiscal 2002 and completed in the first quarter of 2003 ($2.0 million charge), and actions within our Driveline segment's forging operations and administrative departments to eliminate duplicative headcount and adjust costs to reflect the decline in our forging revenue in 2003 ($5.3 million charge). Also included in this charge are the severance costs to replace certain members of our executive management team, and the costs to restructure several departments in our corporate office including the sales, human resources and information technology departments ($5.8 million charge). We expect to realize additional savings from these restructuring actions in 2004, as reductions in employee related expenses are recognized in both cost of goods sold and selling, general and administrative expense.

				(In thousands)
				Acquisition Related								2002 Severance And Other Exit Costs				2003 Severance And Other Exit Costs				Total
				Severance Costs				Exit Costs
Balance at December 29, 2002				$	9,880			$	540			$	2,380			$	—			$	12,800
Charges to expense					—				—				—				13,130				13,130
Cash payments					(8,110	)			(540	)			(2,020	)			(5,820	)			(16,490	)
Reversal of unutilized amounts					(390	)			—				—				—				(390	)
Balance at December 28, 2003				$	1,380			$	—			$	360			$	7,310			$	9,050

Asset Impairment.    As a result of our impairment analysis performed in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," we recorded a $4.9 million charge in our Driveline segment associated with two plants with negative operating performance. Subsequent to December 28, 2003, these two facilities were sold to an independent third party. The sales price to this third party was used to determine the fair market value of the facilities for the SFAS No. 144 impairment analysis.

Operating Profit.    Operating profit was $20.3 million for 2003 compared to $62.6 million in 2002 after adjustment for TriMas. The $42.3 million reduction in operating profit is the result of the $37 million reduction to gross profit, $10 million improvement in selling general and administrative expenses, the $4.9 million asset impairment charge and $10 million in incremental restructuring charges. The elements of each of these variations are discussed in greater detail above.

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				(In thousands)
Segment				Year Ended December 28, 2003				Year Ended December 29, 2002
Chassis Segment				$	4,720			$	8,190
Driveline Segment					12,740				54,730
Engine Segment					45,800				32,740
Corporate/centralized resources					(42,960	)			(33,090	)
Automotive Group				$	20,300			$	62,570
TriMas Group					—				46,140
Total Company				$	20,300			$	108,710

Adjusted EBITDA.    Management reviews our segment operating results based upon the Adjusted EBITDA definition as discussed in the "Key Indicators of Performance (Non-GAAP Financial Measures)" section. Accordingly, we have separately presented such amounts in the table below. The primary drivers of this decline are explained above in the operating profit and depreciation and amortization discussions, and will be further detailed in the segment detail that follows. Additionally, and as explained earlier, 2003 is negatively impacted by an increase of approximately $15 million in fixed asset losses versus 2002. The "Segment Information" below provides a reconciliation between Adjusted EBITDA and operating profit.

				(In thousands)
Segment				Year Ended December 28, 2003				Year Ended December 29, 2002
Chassis Segment				$	12,350			$	13,520
Driveline Segment					71,590				100,590
Engine Segment					81,780				63,370
Corporate/centralized resources					(31,720	)			(17,250	)
Automotive Group				$	134,000			$	160,230
TriMas Group					—				62,400
Total Company				$	134,000			$	222,630

Interest Expense.    Interest expense decreased by $15.5 million due to lower average debt levels in 2003 compared to 2002. See the "Liquidity and Capital Resources" section below for additional discussion of our capital structure. In addition, we incurred a $68.9 million loss on the repurchase and retirement of debentures and term debt and a $7.5 million non-cash loss on interest rate arrangements in connection with the early retirement of our term loans in the second quarter of 2002. These losses are reflected as a "loss on repurchase of debentures and early retirement of term loans" and a "loss on interest rate arrangements upon early retirement of term loans" in our consolidated statement of operations incorporated herein.

Equity Gain (Loss) from Affiliates, Net.    Equity (loss) from affiliates increased by approximately $19.3 million due to the operating results of our equity affiliates. As a result of the divestiture (as described in Item 1) of our former TriMas subsidiary in June 2002, we recorded six months of equity in earnings (loss) from affiliates in 2002 versus twelve months of activity in 2003. In addition, our equity affiliate Saturn Electronics recorded a SFAS No. 142 intangible asset impairment resulting in an increase of approximately $12 million in equity loss in 2003 versus 2002.

Other, Net.    Other, net decreased by $0.9 million to a loss of $8.1 million in 2003 compared to a loss of $9.0 million in 2002. This decrease is primarily due to the reduction of amortization of prepaid debt expense of approximately $2.3 million in 2003, which was offset by an increase in other miscellaneous expenses. For more detail of this expense see Note 19, Other Income (Expense), Net, to the Company's audited consolidated financial statements included herein.

Taxes.    The provision for income taxes for 2003 was a benefit of $8.7 million as compared to a benefit of $41.0 million for 2002. Our effective tax rate for 2003 was a benefit of 10% compared to a benefit of 59% for 2002. The lower effective tax rate of 10% results mostly from the inclusion of foreign dividends,

35

partial repatriation of foreign earnings and the taxation of income in foreign jurisdictions at rates greater than the U.S. statutory rate. Federally taxable income inclusion items typically serve to increase a company's effective tax rate; however, since the Company incurred a pre-tax loss, the inclusion of foreign earnings results in a lesser U.S. tax benefit, which when compared to the pre-tax loss, results in a lower effective tax rate. Excluding the impact of these items, the Company's effective tax rate would have been approximately 33%.

Preferred Stock Dividends.    Preferred stock dividends were $9.3 million in 2003 as compared to $9.1 million in 2002. This increase is due to the compounded interest of previous year dividends not yet remitted to the shareholders.

Segment Information

Chassis Segment.    Sales for our Chassis segment remained relatively flat in 2003 compared to 2002. The primary factors affecting 2003 activity were the transfer of a manufacturing facility with 2003 sales of approximately $26.5 million from the Engine segment and the sale of our Fittings business in May 2003 that resulted in a $10.9 million sales reduction. This activity was offset by the June 2002 closure of a manufacturing facility which resulted in an approximate $8.7 million sales reduction. The remaining decrease is primarily explained by the 6.4% reduction in North American vehicle production. Operating income decreased by approximately $3.5 million primarily due to the closure of the manufacturing facility resulting in approximately a $1.2 million reduction, the sale of our Fittings business that resulted in approximately a $2.4 million reduction, $1.1 million in additional losses on fixed assets, incremental lease expense related to sale-leasebacks of approximately $1 million, a $2.3 million increase in depreciation and amortization expense and the decline in sales revenue relating to the decrease in North American vehicle production. Offsetting these decreases was additional profitability contributed by the transferred facility from the Engine segment. Adjusted EBITDA decreased by approximately $1.2 million in 2003 compared to 2002 due to the aforementioned explanations.

				(In thousands)
Chassis Segment				Year Ended December 28, 2003				Year Ended December 29, 2002
Sales				$	143,590			$	143,650
Operating profit				$	4,720			$	8,190
Depreciation and amortization					7,630				5,330
Adjusted EBITDA				$	12,350			$	13,520
Memo: Fixed asset losses included in calculation of both operating profit and Adjusted EBITDA				$	1,080			$	—

Driveline Segment.    Sales for our Driveline segment decreased 2% or approximately $16.3 million in 2003 compared to 2002. Adjusting for the positive impact of currency movements of approximately $26 million, sales for our Driveline segment decreased 5.3% or approximately $42 million. Additionally, removing the incremental effect of our Dana Greensboro, North Carolina acquisition in 2003, sales declined an additional $32 million, or 4%. This decrease is due to the 6.4% reduction in North American vehicle production and the loss of both volume and significant price reductions granted to several of our forging customers in response to a global sourcing initiatives from two of our largest customers.

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				(In thousands)
Driveline Segment				Year Ended December 28, 2003				Year Ended December 29, 2002
Sales				$	790,750			$	807,010
Operating profit				$	12,740			$	54,730
Asset impairment					4,870				—
Depreciation and amortization					53,540				45,480
Legacy stock award expense					440				380
Adjusted EBITDA				$	71,590			$	100,590
Memo: Fixed asset losses included in calculation of both operating profit and Adjusted EBITDA				$	6,550			$	—

Operating profit decreased by approximately $42 million primarily due to significant margin reduction within our North American forging operations. Our forging operations were subject to several global sourcing initiatives undertaken by our customers, which resulted in both lost volume and significant price reductions. In addition to the lost volume and price reductions, our Driveline segment's operating margins were negatively impacted by increased steel prices of approximately $7 million, a non-cash $4.9 million asset impairment charge, incremental fixed asset losses of $6.6 million, incremental restructuring charges of $5.3 million, and incremental depreciation and amortization charges of approximately $8.1 million. These unfavorable variations from the prior year were offset by the positive impact of currency movements of $6.1 million, a $2.5 million curtailment gain associated with a pension plan amendment for our Bedford Heights plant that was sold in February 2004 and additional income associated with the Greensboro facility acquisition of approximately $5.4 million. Adjusted EBITDA decreased by approximately $29 million in 2003 compared to 2002 due to the above reasons but excluding the non-cash asset impairment charge recorded in 2003 and the incremental depreciation and amortization discussed above.

Engine Segment.    Sales for our Engine segment increased 11.9% or approximately $60.9 million in 2003 compared to 2002. Adjusting for the transfer in 2003 of a manufacturing facility to the Chassis segment which resulted in an approximate $23 million decrease in sales in 2003 versus 2002 and a favorable change in exchange rates of approximately $17.8 million in 2003, sales for our Engine segment increased by 12.9% or $66.1 million primarily attributable to increased sales for new programs. Operating profit increased by $13.1 million due primarily to the increased sales on new programs, the positive impact of currency movements of $4.5 million and the recognition of costs savings resulting from restructuring efforts initiated in 2002. These increases were offset by incremental depreciation and amortization of approximately $5.4 million and incremental losses incurred on the disposal of fixed assets in 2003 of approximately $4.4 million. Adjusted EBITDA increased by approximately $18.4 million in 2003 compared to 2002 due to the aforementioned reasons but excluding the non-cash charges related to incremental depreciation and amortization.

				(In thousands)
Engine Segment				Year Ended December 28, 2003				Year Ended December 29, 2002
Sales				$	573,860			$	512,960
Operating profit				$	45,800			$	32,740
Depreciation and amortization					35,980				30,630
Adjusted EBITDA				$	81,780			$	63,370
Memo: Fixed asset losses included in calculation of both operating profit and Adjusted EBITDA				$	5,070			$	640

Corporate/Centralized Resources.    Adjusted EBITDA for Corporate/Centralized Resources was a loss of $31.7 million in 2003, or an increase of approximately $14.5 million over the loss in 2002. This increase in expense is primarily attributable to approximately $5.8 million of restructuring costs associated

37

with an employee reduction and changes in management. In addition, we incurred approximately $1.8 million in costs to establish our Asian sales offices, and recognized an increase in professional fees associated with our acquisition, divestiture and audit activity, as well as an additional investment in our Corporate center to support our shared services effort that have allowed us to remove costs from our operations. Further, we incurred approximately $2 million more in non-cash fixed asset losses and over $2 million of reductions in other income and expense (primarily related to foreign currency fluctuations).

				(In thousands)
Corporate/Centralized Resources				Year Ended December 28, 2003				Year Ended December 29, 2002
Operating profit				$	(42,960	)		$	(33,090	)
Depreciation and amortization					9,200				9,990
Legacy stock award expense					2,650				4,240
Other, net					(610	)			1,610
Adjusted EBITDA				$	(31,720	)		$	(17,250	)
Memo: Fixed asset losses included in calculation of both operating profit and Adjusted EBITDA				$	2,170			$	110
Memo: Other, Net (income) expense included in calculation of Adjusted EBITDA				$	610			$	(1,610	)

Liquidity and Capital Resources

Overview.    Our objective is to appropriately finance our business through a mix of long-term and short-term debt and to ensure that we have adequate access to liquidity. Our principal sources of liquidity are cash flow from operations, our revolving credit facility and our accounts receivable securitization facility. As of January 2, 2005, we have unutilized capacity under our revolving credit facility that may be utilized for acquisitions, investments or capital expenditure needs. Our cash flows during the year are impacted by the volume and timing of vehicle production, which includes a shutdown in our North American customers for approximately two weeks in July and one week in December and reduced production in July and August for certain European customers. We believe that our liquidity and capital resources including anticipated cash flow from operations will be sufficient to meet debt service, capital expenditure and other short-term and long-term obligations and needs, but we are subject to unforeseeable events and the risk that we are not successful in implementing our business strategies.

To facilitate the collection of funds from operating activities, we have sold receivables under our accounts receivable facility and have entered into accelerated payment collection programs with certain customers. At January 2, 2005, we accelerated approximately $24 million outstanding under these programs. The majority of the accelerated payment collection programs were discontinued as of or prior to January 2, 2005. However, since the beginning of 2004, we continue to collect approximately $22 million per month on an accelerated basis as a result of favorable payment terms that we negotiated with one of our customers and that will run contractually through fiscal 2006. These payments are received on average 20 days after shipment of product to our customer. While the impact of the discontinuance of these programs may be partially offset by a greater utilization of our accounts receivable securitization facility, we are examining other alternative programs in the marketplace, as well as enhanced terms directly from our customers. However, we may not be able to reach a favorable resolution in a timely manner, and the new arrangements may be less advantageous to the Company. If we are unable to replace these arrangements, it could adversely affect our liquidity and future covenant compliance under our senior secured credit facility.

Our capital planning process is focused on ensuring that we use our cash flow generated from our operations in ways that enhance the value of our company. Historically, we have used our cash for a mix of activities focused on revenue growth, cost reduction and strengthening the balance sheet. In 2004, we used our cash primarily to service our debt obligations and to fund our capital expenditure requirements.

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Liquidity.    At January 2, 2005, we had approximately $71 million and $15 million of undrawn and available commitments from our revolving credit facility and accounts receivable securitization, respectively. Approximately $63.5 million and $63.3 million were outstanding on our revolving credit facility and accounts receivable securitization facility, respectively, at January 2, 2005. Our access to these two facilities is limited by certain covenant restrictions (see "Debt, Capitalization and Available Financing Sources" section following for further discussion on our debt covenants), but at January 2, 2005, we could have drawn the entire $71 million on our revolving credit facility.

For the first calendar quarter of 2005, our maximum debt capacity (including amounts drawn under our accounts receivable securitization program) is computed by multiplying our leverage ratio covenant of 5.25 by our bank agreement defined EBITDA, or approximately $217 million. Thus, our total debt capacity at January 2, 2005 is approximately $1,140 million. Our actual debt plus the accounts receivable securitization at January 2, 2005 approximated $931 million, or approximately $209 million less than our total capacity. However, our revolving credit and accounts receivable securitization availability only amounted to $86 million as of January 2, 2005, as noted in Note 4, Accounts Receivable Securitization and Factoring Agreements, and Note 11, Long-Term Debt, to the Company's audited consolidated financial statements. We are actively pursuing enhancements to our accounts receivable facility (such as the addition of the New Castle receivables into the accounts receivable securitization program and the reduction of the customer concentration limits and/or the reserve factors applied to the facility) that would allow additional liquidity.

TriMas Common Stock.    On November 12, 2004, we sold approximately 924,000 shares of TriMas stock to Masco Corporation for $23 per share, or a total of $21.3 million. The gain recognized on the sale of this stock to Masco was $2.9 million. The Company continues to own 4.8 million shares of TriMas stock, or approximately 24% of the total outstanding shares of TriMas. Masco Corporation owns approximately 6% of the Company's outstanding shares.

Saturn Common Stock.    On December 22, 2004, we sold our 36% common equity investment in Saturn Electronics & Engineering, Inc. ("Saturn") for gross consideration totaling $15 million. Pursuant to modified agreements with former holders of the Company's common stock as of November 28, 2000, such holders received a portion of the net proceeds from this disposition of Saturn. Total consideration paid to the former stock holders was $2.4 million. The gain recognized on the disposition of Saturn was $5.1 million.

Debt, Capitalization and Available Financing Sources.    In December 2004, we obtained an amendment of our credit facility to, among other things, modify certain negative covenants. Under this amendment, the applicable interest rate spreads on our term loan obligations increased from 4.25% to 4.50% over the current London Interbank Offered Rate ("LIBOR") and our leverage covenant was modified to be less restrictive.

On December 31, 2003, the Company issued $31.7 million of 10% senior subordinated notes due 2014 to DaimlerChrysler. These notes have a carrying amount of $27.2 million as of January 2, 2005. The notes were issued as part of the financing of the New Castle acquisition.

On October 20, 2003, we issued $150 million of 10% senior notes due 2013 in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended. As these notes were not registered within 210 days from the closing date, the annual interest rate increased by 1% and will remain so until the registration statement is declared effective. The net proceeds from this offering were used to redeem the balance of the $98.5 million aggregate principal amount of the outstanding 4.5% subordinated debentures ($91 million reflected on the balance sheet at December 29, 2002) that were due in December 2003, and to repay $46.6 million of term loan debt under our credit facility. As a result of this term loan repayment, our semi-annual principle installments on the term loan facility were decreased to $0.4 million with the remaining outstanding balance due December 31, 2009. In connection with this financing, we agreed with our banks to decrease our revolver facility from $250 million to $200 million.

In July 2003, we obtained an amendment to our credit facility to, among other things, permit the $150 million offering of 10% senior subordinated notes and the use of proceeds therefrom, modify certain negative and financial covenants and permit us to complete the acquisition of DaimlerChrysler's common and preferred interest in the New Castle joint venture under certain conditions. Under this amendment, the applicable interest rate spreads on our term loan obligations increased from 2.75% to 4.25% over the current LIBOR.

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The credit facility includes a term loan with $351 million outstanding and a revolving credit facility with a principal commitment of $200 million (prior to our October 2003 senior note offering, this facility was $250 million). The revolving credit facility matures on May 28, 2007 and the term loan facility matures on December 31, 2009. The obligations under the credit facility are collateralized by substantially all of our assets and of the assets of substantially all of our domestic subsidiaries and are guaranteed by substantially all of our domestic subsidiaries on a joint and several basis.

				(In thousands)
				January 2, 2005				December 28, 2003
Senior credit facilities:
Term loan				$	351,080			$	352,000
Revolving credit facility					63,540				—
Total senior credit facility					414,620				352,000
11% senior subordinated notes, with interest payable semi-annually, due 2012					250,000				250,000
10% senior notes, with interest payable semi-annually, due 2013					150,000				150,000
10% senior subordinated notes, with interest payable semi-annually, due 2014 (face value $31.7 million)					27,180				—
Other debt (includes capital lease obligations)					25,900				25,810
Total				$	867,700			$	777,810
Less current maturities					(12,250	)			(10,880	)
Long-term debt				$	855,450			$	766,930

At January 2, 2005, we were contingently liable for standby letters of credit totaling $65 million issued on our behalf by financial institutions. These letters of credit are used for a variety of purposes, including meeting requirements to self-insure workers' compensation claims and for the New Castle sale-leaseback on December 31, 2003.

Our senior credit facility contains covenants and requirements affecting us and our subsidiaries, including a financial covenant requirement for an Earnings Before Interest Taxes Depreciation and Amortization ("EBITDA") to cash interest expense coverage ratio to exceed 2.10 through April 3, 2005, 2.15 through July 3, 2005, 2.20 through October 2, 2005, increasing to 2.30 through April 2, 2006; and a debt to EBITDA leverage ratio not to exceed 5.25 through July 3, 2005, decreasing to 5.00 and 4.75 for the quarters ending October 2, 2005 and January 1, 2006, respectively. We were in compliance with the preceding financial covenants throughout the year.

New Castle Acquisition.    We successfully completed our purchase of DaimlerChrysler's common and preferred interests in NC-M Chassis Systems, LLC ("New Castle") on December 31, 2003. We financed this acquisition with $118.8 million in cash, $31.7 million in aggregate principal amount of a new issue of 10% senior subordinated notes (fair value of $26.9 million as of December 31, 2003) and $64.5 million in aggregate liquidation preference Series A-1 preferred stock (fair value of $55.3 as of December 31, 2003). The cash portion of the consideration was funded in part with the net cash proceeds of approximately $65 million from the sale to and subsequent leaseback of certain equipment from General Electric Capital Corporation, and the remainder was funded through the Company's revolving credit facility.

Interest Rate Hedging Arrangements.    In February 2001, we entered into interest rate protection agreements with various financial institutions to hedge a portion of our interest rate risk related to the term loan borrowings under our credit facility. These agreements include two interest rate collars with a term of three years, a total notional amount of $200 million and a three month LIBOR interest rate cap and floor of 7% and 4.5%, respectively, and four interest rate caps at a three month LIBOR interest rate of 7% with a total notional amount of $301 million. As a result of our early retirement of our term loans in June 2002, we recorded a cumulative non-cash loss of $7.5 million, which is included in our consolidated statement of operations for the year ended December 29, 2002. The two interest rate collars and two of the interest rate caps totaling $200 million were immediately redesignated to our new term loan borrowings in June 2002. The remaining two interest rate caps totaling $101 million no longer qualify for hedge accounting. Therefore, any unrealized gain or loss is recorded as other income or expense in the consolidated statement of operations beginning June 20, 2002.

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The two interest rate collars expired in the first quarter of 2004, and accordingly we recognized a pre-tax non-cash gain of approximately $6.6 million, which reflects the reversal of the majority of the non-realized charge reflected in our 2002 results and explained in the above paragraph. Prior to the expiration of these interest rate collars, we recognized approximately $1.1 million as additional interest expense in 2004. Prior to their maturity, $6.6 million was included in accumulated other comprehensive income related to these arrangements.

Foreign Currency Risk.    The Company is subject to the risk of changes in foreign currency exchange rates due to its global operations. The Company manufactures and sells it products primarily in North America and Europe. As a result, the Company's financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets in which the Company manufactures and distributes its products. The Company's operating results are primarily exposed to changes in exchange rates between the U.S. dollar and European currencies.

As currency exchange rates change, translation of the statements of operations of the Company's international businesses into U.S. dollars affects year-over-year comparability of operating results. The Company does not hedge operating translation risks because cash flows from international operations are generally reinvested locally. Changes in foreign currency exchange rates are generally reported as a component of stockholders' equity for the Company's foreign subsidiaries reporting in local currencies and as a component of income for its foreign subsidiaries using the U.S. dollar as the functional currency. The Company's other comprehensive income was increased by $33 million and $45 million in 2004 and 2003, respectively, due to cumulative translation adjustments resulting primarily from changes in the U.S. dollar to the Euro.

As of January 2, 2005 and December 28, 2003, the Company's net assets (defined as current assets less current liabilities) subject to foreign currency translation risk were $27.8 million and $2.5 million, respectively. The potential decrease in net current assets from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be $2.8 million and $0.3 million, respectively. The sensitivity analysis presented assumes a parallel shift in foreign currency exchange rates. Exchange rates rarely move in the same direction. This assumption may overstate the impact of changing exchange rates on individual assets and liabilities denominated in a foreign currency.

Off-Balance Sheet Arrangements.

Our Receivables Facility.    We have entered into an agreement to sell, on an ongoing basis, the trade accounts receivable of certain business operations to a bankruptcy-remote, special purposes subsidiary, MTSPC, wholly owned by us. MTSPC has sold and, subject to certain conditions, may from time to time sell an undivided fractional ownership interest in the pool of domestic receivables, up to approximately $150 million, to a third party multi-seller receivables funding company, or conduit. Upon sale to the conduit, MTSPC holds a subordinated retained interest in the receivables. Under the terms of the agreement, new receivables are added to the pool as collections reduce previously sold receivables. We service, administer and collect the receivables on behalf of MTSPC and the conduit. The facility is an important source of liquidity to the Company. The receivables facility resulted in net expense of $2.9 million in 2004.

The facility is subject to customary termination events, including, but not limited to, breach of representations or warranties, the existence of any event that materially adversely affects the collectibility of receivables or performance by a seller and certain events of bankruptcy or insolvency. At January 2, 2005, we had used $63.3 million with $15 million available but not utilized at January 2, 2005 . The proceeds of sale are less than the face amount of accounts receivable sold by an amount that approximates the purchaser's financing costs. The agreement expires in November 2005. Refer to Note 29, Subsequent Events, to the Company's audited consolidated financial statements.

We have entered into agreements with international invoice factoring companies to sell customer accounts receivable of Metaldyne foreign locations in France, Germany, Spain, United Kingdom and Mexico on a non-recourse basis. As of January 2, 2005, we had available approximately $63.5 million from these commitments, and approximately $53.1 million of receivables were sold under these programs. We pay a commission to the factoring company plus interest from the date the receivables are sold to the date of customer payment. Commission expense related to these agreements are recorded in other expense, net on the Company's consolidated statement of operations.

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

Sale-Leaseback Arrangements.    We have engaged in a number of sale-leaseback transactions, including five transactions during 2004. In December 2004, we entered into two sale-leaseback transactions for machinery and equipment with third party lessors. We received $11.8 million and $7.2 million cash as part of these two transactions. On June 17, 2004, we entered into a sale-leaseback transaction for machinery and equipment whereby we received $7.5 million cash as part of this transaction. Each of these three sale-leasebacks is accounted for as an operating lease with combined annual lease expense of approximately $5 million. On December 31, 2003, we entered into a sale-leaseback with proceeds of approximately $4.5 million. This lease was accounted for as a capital lease and the present value of lease payments is therefore reflected in our debt balance. We also entered into a $65 million sale-leaseback on December 31, 2003, as part of our financing related to the purchase of New Castle. This lease for New Castle equipment is accounted for as an operating lease and the annual lease expense is approximately $10 million.

In March 2003, we entered into a sale-leaseback transaction with respect to certain manufacturing equipment for proceeds of approximately $8.5 million, and in October 2003, we entered into a sale-leaseback transaction for machinery and equipment for additional proceeds of $8.5 million. In July 2003, we entered into an approximate $10 million operating lease associated with the acquisition of our Greensboro, North Carolina facility. The proceeds from this lease were used to finance a portion of the acquisition of this facility from Dana Corporation. All of these leases are accounted for as operating leases. The sale-leasebacks initiated in 2003 contribute an additional $3.8 million in annualized lease expense.

At the time of the GMTI acquisition in June 2001, GMTI entered into sale-leasebacks with respect to certain manufacturing equipment and three real properties for proceeds of approximately $35 million and reduced the debt that we assumed as part of the acquisition by that amount. In June 2001, we entered into an approximate $25 million sale-leaseback related to manufacturing equipment. In December 2001 and January 2002, we entered into additional sale-leaseback transactions with respect to equipment and approximately 20 real properties for net proceeds of approximately $56 million and used the proceeds to repay a portion of our term debt under our credit facility. In December 2002, three additional sale-leaseback transactions were completed with respect to equipment for net proceeds of approximately $19 million. Of the $56 million in proceeds resulting from the December 2001 and January 2002 sale-leaseback transactions, approximately $21 million were from the sale of TriMas properties.

We continue to look to sale-leaseback and other leasing opportunities as a source of cash to finance capital expenditures and for debt reduction and other uses.

Redeemable Preferred Stock.    We also have outstanding $159.3 million in aggregate liquidation value ($108.9 million aggregate fair value as of January 2, 2005) of Series A, B and A-1 redeemable preferred stock in respect of which we have the option to pay cash dividends, subject to the terms of our debt instruments, at rates of 13%, 11.5% and 11%, respectively, per annum initially and to effect a mandatory redemption in December 2012, June 2013 and December 2013, respectively. For periods that we do not pay cash dividends on the Series A and Series A-1 preferred stock, an additional 2% per annum of dividends is accrued. No cash dividends were paid in 2003 or 2004. In the event of a change in control or certain qualified equity offerings, we may be required to make an offer to repurchase our outstanding preferred stock. We may not be permitted to do so and may lack the financial resources to satisfy these obligations. Consequently, upon these events, it may become necessary to recapitalize our company or secure consents.

TriMas Receivables.    We have recorded approximately $7.1 million as of January 2, 2005, consisting of receivables related to certain amounts from TriMas, $4.3 million of which is recorded in equity investments and receivables in affiliates in the Company's consolidated balance sheet as of January 2, 2005. These amounts include TriMas' obligations resulting from tax net operating losses created prior to the disposition of TriMas of approximately $2.2 million, pension obligations of approximately $4.4 million and various invoices paid on TriMas' behalf of approximately $0.5 million.

Credit Rating.    Metaldyne is rated by Standard & Poor's and Moody's Ratings. As of March 15, 2005, we have long-term ratings of BB- on our senior credit facility, B on our 10% senior notes due 2013 and

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B on our 11% senior subordinated notes due 2012. Our goal is to decrease our total leverage and thus improve our credit ratings. In the event of a credit downgrade, we believe we would continue to have access to additional credit sources. However, our borrowing costs would further increase and our ability to access certain financial markets may become limited.

Capital Expenditures.    Our capital expenditure program promotes our growth-oriented business strategy by investing in our core areas, where efficiencies and profitability can be enhanced. Capital expenditures by product segment for the periods presented were:

				(In thousands)
				2004				2003				2002
Capital Expenditures:
Automotive Group
Chassis				$	36,690			$	24,120			$	14,500
Driveline					46,710				45,110				36,470
Engine					68,090				47,410				49,310
Corporate					950				14,080				6,210
Automotive Group					152,440				130,720				106,490
TriMas Group					—				—				9,960
Total				$	152,440			$	130,720			$	116,450

We anticipate that our capital expenditure requirements for fiscal 2005 will be approximately $120 million.

CONTRACTUAL CASH OBLIGATIONS

Under various agreements, we are obligated to make future cash payments in fixed amounts. These include payments under our long-term debt agreements, rent payments required under lease agreements and various severance obligations undertaken. The following table summarizes our fixed cash obligations over various future periods as of January 2, 2005.

				(In millions)
				Payments Due by Periods
				Total				Less Than One Year				1-3 Years				3-5 Years				After 5 Years
Long-term debt				$	537			$	28			$	116			$	393			$	—
11% Senior subordinated notes due 2012					457				28				55				55				319
10% Senior notes due 2013					285				15				30				30				210
10% Senior subordinated notes due 2014					61				3				6				6				46
Other debt					17				8				1				8				—
Capital lease obligations					11				5				3				2				1
Operating lease obligations					352				52				98				73				129
Purchase obligations (1)					61				50				11				—				—
Redeemable preferred stock, including accrued dividends					453				19				49				65				320
Pension contributions (data available through 2006)					46				24				22				—				—
Contractual severance					5				4				1				—				—
Total contractual obligations (1)				$	2,285			$	236			$	392			$	632			$	1,025

(1)	Total purchase obligations and contractual obligations exclude accounts payable and accrued liabilities.

Total contractual obligations at January 2, 2005 include interest expense and preferred stock dividend obligations based on the terms of each agreement or the rate as of January 2, 2005 for variable instruments.

At January 2, 2005, we were contingently liable for standby letters of credit totaling $65 million issued on our behalf by financial institutions. We are also contingently liable for future product warranty claims. We provide extensive warranties to our customers. As a result of these warranties, we may be responsible for costs associated with a product recall caused by a defect in a part that we manufacture. We continuously monitor potential warranty implications of new and current business.

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Pension Plans and Post Employment Benefits

We sponsor defined benefit pension plans covering certain active and retired employees in the United States, Canada and Europe. On December 28, 2003, the projected benefit obligation (calculated using a 6.11% discount rate) exceeded the market value of plan assets by $126.4 million. During 2004, we made contributions, including employee contributions and benefit payments made directly by Metaldyne, of $19.1 million to the defined benefit plans. The underfunded status at January 2, 2005 is $121.2 million (assuming a 5.99% discount rate). Under SFAS No. 87, "Employers' Accounting for Pensions," Metaldyne is required annually on September 30 to re-measure the present value of projected pension obligations as compared to plan assets at market value. Although this mark-to-market adjustment is required, we maintain a long-term outlook for developing a pension-funding plan. In addition, we are in a period of very low interest rates, which results in a higher liability estimate.

				Underfunded Status (PBO Basis)
				(In thousands)
December 28, 2003				$	(126,400	)
Pension contributions					19,120
2004 asset returns					13,640
Impact of U.S. discount rate decrease by 12.5 basis points					(4,280	)
Interest and service cost					(20,580	)
Curtailments					1,470
Other					(4,210	)
January 2, 2005				$	(121,240	)

The discount rate that we utilize for determining future pension obligations is based on a review of long-term bonds, including published indices, which receive one of the two highest ratings given by recognized rating agencies. The discount rate determined on that basis decreased from 6.11% for 2003 to 5.99% for 2004. This 12 basis point decline in the discount rate had the effect of increasing the underfunded status of our U.S. pension plans by approximately $4.3 million.

For 2004, we have assumed a long-term asset rate of return on pension assets of 8.96%. We will utilize a 9% long-term asset rate of return assumption in 2005. In developing the 9% expected long-term rate of return assumption, we evaluated input from our third party pension plan asset managers, including a review of asset class return expectations and long-term inflation assumptions. At January 2, 2005, our actual asset allocation was consistent with our asset allocation assumption.

Our pension expense was $4.2 million and $2.1 million for 2004 and 2003, respectively. For 2005, we expect pension expense to be $6.4 million. As required by accounting rules, our pension expense for 2005 is determined at the end of September 2004. However, for purposes of analysis, the following table highlights the sensitivity of our pension obligations and expense to changes in assumptions:

				(In millions)
Change In Assumptions				Impact On Pension Expense				Impact On PBO
25 bp decrease in discount rate				$	0.6			$	10.3
25 bp increase in discount rate					(0.6	)			(10.2	)
25 bp decrease in long-term return on assets					(0.5	)			N/A
25 bp increase in long-term return on assets					(0.5	)			N/A

We expect to make contributions of approximately $24.0 million to the defined benefit pension plans for 2005.

On January 1, 2003, we replaced our existing combination of defined benefit plans and defined contribution plans for non-union employees with an age-weighted profit-sharing plan and a 401(k) plan. Defined benefit plan benefits will no longer accrue after 2002 for these employees. This change affected approximately 1,200 employees. The profit-sharing component of the new plan is calculated using

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allocation rates that are integrated with Social Security and that increase with age. Our 2005 defined contribution (profit-sharing and 401(k) matching contribution) expense will be approximately $10.6 million.

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act was signed into law. This law provides for a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to the benefit established by the law. The Company provides retiree drug benefits that exceed the value of the benefits that will be provided by Medicare Part D, and our eligible retirees generally pay a premium for this benefit that is less than the Part D premium. Therefore, we have concluded that these benefits are at least actuarially equivalent to the Part D program so that we will be eligible for the basic Medicare Part D subsidy.

In the second quarter of 2004, a Financial Accounting Standards Board (FASB) Staff Position (FSP FAS 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003") was issued providing guidance on the accounting for the effects of the Act for employers that sponsor postretirement health care plans that provide prescription drug benefits. The FSP is effective for the first interim or annual period beginning after June 15, 2004. We estimate the federal subsidy reduced our postretirement benefit obligation by approximately $7.0 million; this savings is reflected in the balance at January 2, 2005. For 2004, we recognized a net reduction in postretirement expense of $0.9 million as a result of the subsidy.

In December 2004, we announced that we will discontinue retiree medical and life insurance coverage to our salaried and nonunion retirees and their beneficiaries effective January 1, 2006. This event has no impact on our 2004 annual results since the announcement occurred subsequent to the September 30, 2004 measurement date for postretirement benefits. We will record an estimated curtailment gain of $2.5 million in the first quarter of 2005. The Company expects to reduce its 2005 SFAS No. 106 expense by $16.8 million and $1.4 million as a result of the curtailment and of FSP FAS 106-2, respectively.

Cash Flows

Operating activities — Cash flows provided by operations before changes in working capital were $84.5 million for the year ended January 2, 2005 compared to $60 million in 2003 and $158.6 million in 2002. This increase of $24.5 million was primarily due to the increased profitability resulting from the acquisition of New Castle and increased sales volumes in our Engine segment. Net cash provided by operating activities totaled $79.4 million for the year ended January 2, 2005, compared to $99.2 million provided in 2003 and $65.1 million used in 2002. Adjusting 2004 results by the $63 million increased use of the accounts receivable securitization facility, the 2004 operating cash flow would have approximated a $16.1 million inflow, or an approximate $83.1 million decrease versus a $17 million inflow from 2003 excluding refundable income taxes. The primary driver of this decline is an approximate $69 million increase in investment in working capital (excluding the accounts receivable securitization facility). This increase in working capital is explained by the 33% increase in sales in 2004 (driven largely by the New Castle acquisition as accounts receivable was not acquired) and higher inventory levels (largely driven by the increase in raw material pricing combined with higher safety stock to compensate for the decrease in supply). In addition, a $20 million reduction in cash versus 2003 resulted from the receipt of tax refunds in 2004.

Investing activities — Cash flows used in investing activities totaled $230.2 million for the year ended January 2, 2005, compared to a use of cash of $98.8 million in 2003 and a source of cash of $775.7 million in 2002. We acquired the remaining ownership of the New Castle facility in 2004 for approximately $204 million including fees and expenses (net of approximately $14 million in discounts on the $31.7 million subordinated debt and the $64.5 million preferred stock issued to fund the transaction). Capital expenditures totaled $152.4 million in 2004 and were higher than 2003 by approximately $21.7 million primarily related to increased new business launch activity. Offsetting the cost of the New Castle acquisition were proceeds from a sale leaseback transaction of approximately $65 million on the acquired New Castle equipment. Proceeds from sale-leaseback transactions with respect to other equipment represented an additional source of cash of approximately $26.5 million in 2004 as compared to $17 million in 2003. In addition, we received proceeds from the sale of our equity investments and joint venture of $33.8 million and $1.3 million in 2004.

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Financing activities — Cash flows used in financing activities totaled $137 million for the year ended January 2, 2005, compared to a use of cash of $5.7 million in 2003 and $691.5 million in 2002. In 2004, we issued $82.2 million fair value in new debt and preferred stock to acquire New Castle and ended the year with approximately $63.5 million outstanding on our revolving credit and swingline facilities versus zero outstanding at December 28, 2003. In 2003, we secured proceeds of $150 million in a public debt offering, which was offset by repayment of $98.5 million of subordinated convertible debentures that became due in December 2003 and repayment of $47.6 million of term loan debt.

Outlook

Automotive vehicle production in 2005 is expected to be slightly above 2004 production levels in both North America and the global market. However, 2005 automotive vehicle production for the "Big 3" is expected to be approximately 3% below 2004 production levels. There are several factors that could alter this outlook, including a change in interest rates or an increase in vehicle incentives offered to consumers.

Our principal use of funds from operating activities and borrowings for the next several years are expected to fund interest and principal payments on our indebtedness, growth related capital expenditures and working capital increases, strategic acquisitions and lease expense. Management believes cash flow from operations and debt financing and refinancing from our accounts receivable securitization program will provide us with adequate sources of liquidity for the foreseeable future. However, our sources of liquidity may be inadequate if we are unable to obtain operating targets, which would cause us to seek covenant relief from existing lenders in the near future. In addition, matters affecting the credit quality of our significant customers could adversely impact the availability of our receivables arrangements and our liquidity. We continue to explore other sources of liquidity, including additional debt, but existing debt instruments may limit our ability to incur additional debt, and we may be unable to secure equity or other financing.

Consistent with operating in the global vehicle industry, we anticipate significant competitive pressures and thus expect to face significant price reduction pressures from our customer base. In 2003 and 2004, though, we invested significantly in automation and underwent significant restructuring activities to help accommodate these pricing pressures. In addition, we are facing significant increases in the cost to procure certain materials utilized in our manufacturing processes such as steel, energy, molybdenum and nickel. In general, steel prices have recently risen by as much as 60-100% and have thus created significant tension between steel producers, suppliers and end customers. Based on current prices, our material costs could increase approximately $60 million in 2005 over 2004 levels. However, we anticipate several initiatives such as steel scrap sales, steel resourcing efforts, price recovery from several of our customers and reducing or eliminating 2005 scheduled price downs to our customers will offset a significant part of this expected cost increase. Additionally, we are actively working with our customers to 1) obtain additional business to help offset these prices through better utilization of our capacity, 2) negotiate a surcharge to reflect the increased material costs, and/or 3) resource certain of our products made unprofitable by these increases in material costs. We will actively work to mitigate the effect of these steel increases throughout 2005.

Critical Accounting Policies

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

Goodwill.    In June 2001, the Financial Accounting Standards Board ("FASB") approved Statement of Financial Accounting Standards ("SFAS") No. 142 "Goodwill and Other Intangible Assets" which was effective for us on January 1, 2002. Under SFAS No. 142, we ceased the amortization of goodwill. Beginning in 2002, we test goodwill for impairment on an annual basis, unless conditions exist which would require a more frequent evaluation. In assessing the recoverability of goodwill, projections regarding estimated future cash flows and other factors are made to determine the fair value of the respective assets. We may be required to record impairment charges for goodwill if these estimates or related projections change in the future.

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During 2002, 2003 and 2004, we determined that our goodwill was not impaired as fair values continue to exceed their carrying value. Fair value of our goodwill is determined based upon the discounted cash flows of the reporting units using a 9.5% discount. If the discount rate were to increase to 12%, or if anticipated operating profit were to decrease by approximately 1.6% of sales, we would be required to perform further analysis of goodwill impairment in our Driveline segment.

Receivables and Revenue Recognition.    The Company recognizes revenue when there is evidence of a sale, the delivery has occurred or services have been rendered, the sales price is fixed or determinable and the collectibility of receivables is reasonably assured. Consequently, sales are generally recorded upon shipment of product to customers and transfer of title under standard commercial terms. Such pricing accruals are adjusted as they are settled with the Company's customers. Material surcharge pass through arrangements with customers are recognized as revenue when an agreement is reached, delivery of the goods or services has occurred and the amount of the pass through is determinable.

Valuation of Long-Lived Assets.    Metaldyne periodically evaluates the carrying value of long-lived assets to be held and used including intangible assets, when events or circumstances warrant such a review. The carrying value of a long-lived asset to be held and used is considered impaired when the anticipated separately identifiable undiscounted cash flows from such an asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds that fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Impairment losses on long-lived assets that are held for sale are determined in a similar manner, except that fair values are reduced for the cost to dispose of the assets.

Pension and Postretirement Benefits Other Than Pensions.    The determination of our obligation and expense for our pension and postretirement benefits, such as retiree healthcare and life insurance, is dependent on our selection of certain assumptions used by actuaries in calculating such amounts. These assumptions are described in Note 24, Employee Benefit Plans, to the Company's audited consolidated financial statements, which include, among others, discount rate, expected long-term rate of return on plan assets and rate of increase in compensation and health care costs. While we believe that our assumptions are appropriate, significant differences in our actual experience or assumptions may materially affect the amount of our pension and postretirement benefits other than pension obligation and our future expense. Our actual return on pension plan assets was 8.2%, 6.5% and (5.75)% for the years ended January 2, 2005, December 28, 2003 and December 29, 2002, respectively. In comparison, our expected long-term return on pension plan assets was 8.96%, 8.96% and 8.97% for the years ended January 2, 2005, December 28, 2003 and December 29, 2002, respectively. The expected return on plan assets was established by analyzing the long-term returns for similar assets and, as such, no revisions have been made to adjust to actual performance of the plan assets.

New Accounting Pronouncements.

In October 2004, the U.S. government enacted the American Jobs Creation Act of 2004 ("Act"). This Act provides for a special one-time tax deduction of 85% of certain foreign earnings that are repatriated to the U.S. provided certain criteria are met. We are currently analyzing the provisions of the Act and the feasibility of several alternative scenarios for the potential repatriation of a portion of the earnings of our non-U.S. subsidiaries. In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations and therefore we do not currently anticipate repatriation of earnings under the Act.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4," to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) should be recognized as current period charges, and that allocation of fixed production overheads to the costs of conversion be based on normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Accordingly, we will adopt SFAS No. 151 for the fiscal year beginning January 2, 2006. We are currently in the process of evaluating whether the adoption of this pronouncement will have a significant impact on our results of operations or financial position.

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In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment." This Statement is a revision of SFAS No. 123, "Accounting for Stock-Based Compensation" and supercedes APB No. 25, "Accounting for Stock Issued to Employees." SFAS No. 123 (revised 2004) requires that the compensation cost relating to stock options and other share-based compensation transactions be recognized at fair value in financial statements. Due to the Company being a nonpublic entity as defined in SFAS No. 123 (revised 2004), this Statement is effective for us at the beginning of its fiscal year 2006. We will then be required to record any compensation expense using the fair value method in connection with option grants to employees after adoption. We are currently reviewing the provisions of this Statement and will adopt it effective at the beginning of our fiscal year 2006.

Fiscal Year

Effective in 2002, our fiscal year ends on the Sunday nearest to December 31.

Item 7A.    Quantitative and Qualitative Disclosures about Market Risk.

In the normal course of business, we are exposed to market risk associated with fluctuations in foreign exchange rates. We are also subject to interest risk as it relates to long-term debt. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" for details about our primary market risks, and the objectives and strategies used to manage these risks. Also see Note 11, Long-Term Debt, to the Company's audited consolidated financial statements for additional information.

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Item 8.    Financial Statements and Supplementary Data.

Report Of Independent Registered Public Accounting Firm

The Board of Directors
Metaldyne Corporation:

We have audited the accompanying consolidated balance sheets of Metaldyne Corporation as of January 2, 2005 and December 28, 2003, and the related consolidated statements of operations, shareholders' equity and other comprehensive income, and cash flows for the years then ended. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Metaldyne Corporation as of January 2, 2005 and December 28, 2003, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 3, in March 2004, the Company changed its method of accounting for its redeemable preferred stock to conform with Statement of Financial Accounting Standards No. 150, Accounting for Certain Instruments with Characteristics of both Liabilities and Equity.

Detroit, Michigan
March 31, 2005

/s/ KPMG LLP

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Report Of Independent Registered Public Accounting Firm

To the Board of Directors
and Shareholders of Metaldyne Corporation:

In our opinion, the accompanying consolidated statements of operations, of shareholders' equity and of cash flows of Metaldyne Corporation and its subsidiaries present fairly, in all material respects, the results of their operations and their cash flows for the year ended December 29, 2002 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the accompanying financial statement schedule presents fairly, in all material respects, the information set forth therein for the year ended December 29, 2002 when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As discussed in Note 8 to the consolidated financial statements, the Company changed its method of accounting for goodwill resulting from its adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," effective January 1, 2002.

/s/ PricewaterhouseCoopers LLP
Detroit, Michigan
March 11, 2003, except as to the effect of the matters described in Note 2 to the consolidated financial
        statements as filed in the Company's Form 10-K for the year ended December 28, 2003 not appearing
        herein, and Note 15 appearing herein, which are as of November 10, 2004

50

METALDYNE CORPORATION
CONSOLIDATED BALANCE SHEET
January 2, 2005 and December 28, 2003

(Dollars in thousands except per share amounts)

				January 2, 2005				December 28, 2003
ASSETS
Current assets:
Cash and cash equivalents				$	—			$	13,820
Receivables, net:
Trade, net of allowance for doubtful accounts					165,850				139,330
TriMas					2,830				8,390
Other					12,930				26,440
Total receivables, net					181,610				174,160
Inventories					127,020				83,680
Deferred and refundable income taxes					18,470				9,110
Prepaid expenses and other assets					36,650				36,280
Total current assets					363,750				317,050
Equity investments and receivables in affiliates					107,040				155,790
Property and equipment, net					856,250				707,450
Excess of cost over net assets of acquired companies					626,240				584,390
Intangible and other assets					241,470				247,180
Total assets				$	2,194,750			$	2,011,860
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable				$	286,590			$	201,240
Accrued liabilities					117,050				136,840
Current maturities, long-term debt					12,250				10,880
Total current liabilities					415,890				348,960
Long-term debt					855,450				766,930
Deferred income taxes					88,910				121,520
Minority interest					650				800
Other long-term liabilities					142,700				153,760
Redeemable preferred stock (aggregate liquidation value $159.3 million) Authorized: 1,198,693 shares; Outstanding: 1,189,694 shares					149,190				—
Total liabilities					1,652,790				1,391,970
Redeemable preferred stock, (aggregate liquidation value $76.0 million) Authorized: 554,153 shares; Outstanding: 545,154 shares					—				73,980
Shareholders' equity:
Preferred stock (non-redeemable), $1 par, Authorized: 25 million; Outstanding: None					—				—
Common stock, $1 par, Authorized: 250 million; Outstanding: 42.8 million and 42.7 million, respectively					42,830				42,730
Paid-in capital					698,870				692,400
Accumulated deficit					(262,740	)			(234,750	)
Accumulated other comprehensive income					63,000				45,530
Total shareholders' equity					541,960				545,910
Total liabilities, redeemable stock and shareholders' equity				$	2,194,750			$	2,011,860

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

51

METALDYNE CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED JANUARY 2, 2005, DECEMBER 28, 2003 AND
DECEMBER 29, 2002

(Dollars in thousands except per share data)

				January 2, 2005				December 28, 2003				December 29, 2002
Net sales				$	2,004,260			$	1,508,200			$	1,792,200
Cost of sales					(1,831,250	)			(1,352,670	)			(1,498,560	)
Gross profit					173,010				155,530				293,640
Selling, general and administrative expenses (Includes non-cash stock award expense of $0.6 million and $3.1 million in 2004 and 2003, respectively)					(133,250	)			(117,230	)			(181,460	)
Restructuring charges					(2,750	)			(13,130	)			(3,470	)
Loss on disposition of manufacturing facilities					(7,600	)			—				—
Asset impairment					—				(4,870	)			—
Operating profit					29,410				20,300				108,710
Other expense, net:
Interest:
Interest expense					(82,140	)			(75,510	)			(91,000	)
Preferred stock dividends and accretion					(19,900	)			—				—
Non-cash gain on maturity of interest rate arrangement					6,570				—				—
Loss on repurchase of debentures and early retirement of term loans					—				—				(68,860	)
Loss on interest rate arrangements upon early retirement of term loans					—				—				(7,550	)
Equity gain (loss) from affiliates, net					1,450				(20,700	)			(1,410	)
Gain on sale of equity investments, net					8,020				—				—
Other, net					(8,270	)			(8,080	)			(8,980	)
Other expense, net					(94,270	)			(104,290	)			(177,800	)
Loss before income taxes and cumulative effect of change in accounting principle					(64,860	)			(83,990	)			(69,090	)
Income tax benefit					(36,870	)			(8,660	)			(40,960	)
Loss before cumulative effect of change in accounting principle					(27,990	)			(75,330	)			(28,130	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				(36,630	)
Net loss					(27,990	)			(75,330	)			(64,760	)
Preferred stock dividends					—				9,260				9,120
Net loss attributable to common stock				$	(27,990	)		$	(84,590	)		$	(73,880	)
Basic and diluted loss per share:
Before cumulative effect of change in accounting principle less preferred stock dividends				$	(0.65	)		$	(1.98	)		$	(0.87	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				(0.86	)
Net loss attributable to common stock				$	(0.65	)		$	(1.98	)		$	(1.73	)
Weighted average number of shares outstanding for basic and diluted loss per share					42,800				42,730				42,650

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

52

METALDYNE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JANUARY 2, 2005, DECEMBER 28, 2003
AND DECEMBER 29, 2002
(Dollars in thousands)

				January 2, 2005				December 28, 2003				December 29, 2002
Operating activities:
Net loss				$	(27,990	)		$	(75,330	)		$	(64,760	)
Adjustments to reconcile net cash provided by (used for) operating activities:
Depreciation and amortization					132,100				106,350				107,430
Non-cash stock award expense					560				3,090				4,880
Debt fee amortization					3,880				2,480				4,770
Fixed asset (gains) losses					3,180				14,870				750
Asset impairment					—				4,870				—
Loss on disposition of manufacturing facilities					7,600				—				—
Deferred income taxes					(37,730	)			(24,250	)			(21,040	)
Preferred stock dividends and accretion					19,900				—				—
Gain on sale of equity investments					(8,020	)			—				—
Non-cash interest expense (interest accretion)					260				7,390				13,230
Non-cash loss on interest rate arrangements					—				—				7,550
Non-cash gain on maturity of interest rate arrangements					(6,570	)			—				—
Equity (gain) loss from affiliates, net					(1,450	)			20,700				1,410
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				36,630
Loss on repurchase of debentures and early retirement of term loans					—				—				68,860
Other, net					(950	)			280				(1,110	)
Changes in assets and liabilities, net of acquisition/disposition of business:
Receivables, net					(64,170	)			10,790				(8,600	)
Net proceeds of accounts receivable facility					63,260				—				(167,360	)
Inventories					(30,440	)			(5,710	)			(4,870	)
Refundable income taxes					—				21,750				(34,150	)
Prepaid expenses and other assets					(40	)			2,940				(15,120	)
Accounts payable and accrued liabilities					26,000				9,020				6,390
Net cash provided by (used for) operating activities					79,380				99,240				(65,110	)
Investing activities:
Capital expenditures					(152,440	)			(130,720	)			(116,450	)
Disposition of businesses to a related party					—				22,570				840,000
Acquisition of business, net of cash received					(203,870	)			(7,650	)			—
Proceeds from sale/leaseback of fixed assets					91,520				16,970				52,180
Disposition of manufacturing facilities					(500	)			—				—
Proceeds from sale of equity investments					33,830				20,000				—
Investment in joint venture					—				(20,000	)			—
Proceeds on sale of joint venture					1,260				—				—
Net cash provided by (used for) investing activities					(230,200	)			(98,830	)			775,730
Financing activities:
Proceeds of term loan facilities					—				—				400,000
Principal payments of term loan facilities					(1,320	)			(47,600	)			(1,112,450	)
Proceeds of revolving credit facility					279,450				180,000				324,800
Principal payments of revolving credit facility					(215,910	)			(180,000	)			(324,800	)
Proceeds of senior subordinated notes, due 2012					—				—				250,000
Proceeds of senior notes, due 2013					—				150,000				—
Proceeds of senior subordinated notes, due 2014 (face value $31.7 million)					26,920				—				—
Principal payments of convertible subordinated debentures, due 2003 (net of $1.2 million non-cash portion of repurchase).					—				(98,530	)			(205,290	)
Proceeds of other debt					3,740				1,940				920
Principal payments of other debt					(9,840	)			(9,180	)			(6,090	)
Capitalization of debt refinancing fees					(1,380	)			(2,350	)			(12,100	)
Issuance of Series A-1 preferred stock (face value $65.4 million)					55,340				—				—
Penalties on early extinguishment of debt					—				—				(6,480	)
Net cash provided by (used for) financing activities					137,000				(5,720	)			(691,490	)
Net increase (decrease) in cash					(13,820	)			(5,310	)			19,130
Cash and cash equivalents, beginning of year					13,820				19,130				—
Cash and cash equivalents, end of year				$	—			$	13,820			$	19,130
Supplementary cash flow information:
Cash refunded for income taxes, net				$	(8,340	)		$	(27,060	)		$	(2,900	)
Cash paid for interest				$	78,670			$	63,590			$	91,840
Noncash transactions – capital leases				$	6,700			$	5,140			$	6,330

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

53

METALDYNE CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED JANUARY 2, 2005, DECEMBER 28, 2003
AND DECEMBER 29, 2002
(In thousands)

																				Other Comprehensive Income
				Preferred Stock				Common Stock				Paid-In Capital				Accumulated Deficit				Foreign Currency Translation and Other				Minimum Pension Liability				Interest Rate Arrangements				Total Shareholders Equity
Balances, December 31, 2001				$	—			$	42,570			$	679,670			$	(76,270	)		$	890			$	(7,310	)		$	(5,870	)		$	633,680
Comprehensive income:
Net loss																	(64,770	)															(64,770	)
Foreign currency translation																					39,170												39,170
Interest rate arrangements (net of tax, $(380)																													5,100				5,100
Minimum pension liability (net of tax, $17,960)																									(30,570	)							(30,570	)
Increase in TriMas investment																					2,500												2,500
Impact of TriMas disposition																					(1,910	)											(1,910	)
Total comprehensive loss																																	(50,480	)
Preferred stock dividends																	(9,120	)															(9,120	)
Exercise of restricted stock awards													4,270																				4,270
Issuance of shares									80				930																				1,010
Balances, December 29, 2002				$	—			$	42,650			$	684,870			$	(150,160	)		$	40,650			$	(37,880	)		$	(770	)		$	579,360
Comprehensive income:
Net loss																	(75,330	)															(75,330	)
Foreign currency translation																					45,010												45,010
Interest rate arrangements (net of tax $1,080)																													7,340				7,340
Minimum pension liability (net of tax, $(9,450)																									(16,080	)							(16,080	)
Increase in TriMas investment																					7,260												7,260
Total comprehensive loss																																	(31,800	)
Preferred stock dividends																	(9,260	)															(9,260	)
Disposition of business to a related party													6,270																				6,270
Exercise of restricted stock awards									80				1,260																				1,340
Balances, December 28, 2003				$	—			$	42,730			$	692,400			$	(234,750	)		$	92,920			$	(53,960	)		$	6,570			$	545,910
Comprehensive income:
Net loss																	(27,990	)															(27,990	)
Foreign currency translation																					33,320												33,320
Interest rate arrangements																													(6,570	)			(6,570	)
Minimum pension liability (net of tax, $(3,870))																									(6,610	)							(6,610	)
Dissolution of foreign entity upon transfer of operations to other consolidated subsidiaries													5,330								(5,330	)											—
Increase in TriMas investment																					2,660												2,660
Total comprehensive loss																																	(5,190	)
Restricted stock awards									100				1,140																				1,240
Balances, January 2, 2005				$	—			$	42,830			$	698,870			$	(262,740	)		$	123,570			$	(60,570	)		$	—			$	541,960

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

54

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Business and Other Information

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

The Company maintains a fifty-two/fifty-three week fiscal year ending on the Sunday nearest to December 31. Fiscal year 2004 is comprised of fifty-three weeks and fiscal years 2003 and 2002 are comprised of fifty-two weeks and ended on January 2, 2005, December 28, 2003 and December 29, 2002, respectively. All year and quarter references relate to the Company's fiscal year and fiscal quarters unless otherwise stated.

2.    Accounting Policies

Principles of Consolidation.    The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. All significant intercompany transactions have been eliminated. Corporations that are 20 to 50 percent owned are accounted for by the equity method of accounting; ownership less than 20 percent is accounted for on the cost basis unless the Company exercises significant influence over the investee.

Use of Estimates.    The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates.

Revenue Recognition.    The Company recognizes revenue when there is evidence of a sale, the delivery has occurred or services have been rendered, the sales price is fixed or determinable and the collectibility of receivables is reasonably assured. Consequently, sales are generally recorded upon shipment of product to customers and transfer of title under standard commercial terms. The Company has ongoing adjustments to its pricing arrangements with its customers based on the related content and cost of its products. The Company accrues for such amounts as its products are shipped to its customers. Such pricing accruals are adjusted as they are settled with the Company's customers. Material surcharge pass through arrangements with customers are recognized as revenue when an agreement is reached, delivery of the goods or services has occurred and the amount of the pass through is determinable.

Cash and Cash Equivalents.    The Company considers all highly liquid debt instruments with an initial maturity of three months or less to be cash and cash equivalents.

Derivative Financial Instruments.    The Company has entered into interest rate protection agreements to limit the effect of changes in the interest rates on any floating rate debt. All derivative instruments are recognized as assets or liabilities on the balance sheet and measured at fair value. Changes in fair value are recognized currently in earnings unless the instrument qualifies for hedge accounting. Instruments used as hedges must be effective at reducing the risks associated with the underlying exposure and must be designated as a hedge at the inception of the contract. Under hedge accounting, changes are recorded as a component of other comprehensive income to the extent the hedge is considered effective. The ineffective portion of the change in fair value of a derivative instrument that qualifies as a cash flow hedge is reported in earnings. The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative expires or is sold, terminated or exercised, the derivative is de-designated as a hedging instrument, because it is unlikely that a forecasted transaction will occur, a hedged firm commitment no longer meets the definition of a firm commitment, or management determines that designation of the derivative as a hedging instrument is no longer appropriate.

Receivables.    Receivables are presented net of allowances for doubtful accounts of approximately $2.7 million and $3.1 million at January 2, 2005 and December 28, 2003, respectively. The Company

55

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

conducts a significant amount of business with a number of individual customers in the automotive industry. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the existing accounts receivable. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company monitors its exposure for credit losses and maintains adequate allowances for doubtful accounts; the Company does not believe that significant credit risk exists. In accordance with the Company's accounts receivable securitization (see Note 4, Accounts Receivable Securitization and Factoring Agreements), trade accounts receivable of substantially all domestic business operations are sold, on an ongoing basis, to MTSPC, Inc., a wholly owned subsidiary of the Company.

Inventories.    Inventories are stated at the lower of cost or net realizable value, with cost determined principally by use of the first-in, first-out method. The Company secures one-year or longer-term supply contracts for most of its major raw material purchases to protect against inflation and to reduce its raw material cost structure. Therefore, any material savings or price increases (primarily material surcharges) are reflected in the Company's inventory cost.

Property and Equipment, Net.    Property and equipment additions, including significant betterments, are recorded at cost. Upon retirement or disposal of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in income. Repair and maintenance costs are charged to expense as incurred.

Depreciation, Amortization and Impairment of Long-Lived Assets.    Depreciation is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 3.33% to 10%, and machinery and equipment, 6.7% to 33.3%. Deferred financing costs are amortized over the lives of the related debt securities.

Deferred losses on sale-leasebacks are amortized over the life of the respective lease, which range from 3.5 years to 20 years. These losses were recorded as part of the sale-leaseback transactions and represent the difference between the carrying value of the assets sold and the proceeds paid at closing by the leasing companies. Fair value was equal to or in excess of the carrying value of these assets based on asset appraisal information provided by third party valuation firms. These deferred amounts are being amortized, instead of being currently recognized, on a straight-line basis over the lives of the respective leases as required under SFAS No. 28, "Accounting for Sales with Leasebacks" (an amendment of SFAS No. 13). Future amortization amounts relate to the remaining portion of the 2000 and 2001 sale-leaseback deferred losses. For sale-leaseback transactions entered into during 2002 and forward, the Company negotiated more favorable terms for these transactions, resulting in proceeds that were at fair value.

Customer contracts are amortized over a period from 6 years to 14 years depending upon the nature of the underlying contract. Trademarks/trade names are amortized over a 40-year period, while technology and other intangibles are amortized over a period between 3 years and 25 years. At January 2, 2005 and December 28, 2003, accumulated amortization of intangible assets was approximately $88 million and $66 million, respectively. Total amortization expense, including amortization of stock awards and deferred losses related to sale-leaseback transactions, was approximately $34 million in 2004 and 2003 and $44 million in 2002.

Goodwill.    In 2001, the Financial Accounting Standards Board ("FASB") approved Statement of Financial Accounting Standards ("SFAS") No. 142 "Goodwill and Other Intangible Assets" which was effective for the Company on January 1, 2002. Under SFAS No. 142, the Company ceased the amortization of goodwill. Beginning in 2002, it tested goodwill for impairment on an annual basis, unless conditions exist which would require a more frequent evaluation. In assessing the recoverability of goodwill, projections regarding estimated future cash flows and other factors are made to determine the fair value of the respective assets. The Company may be required to record impairment charges for goodwill if these estimates or related projections change in the future.

56

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

During 2002, 2003 and 2004, the Company determined that its goodwill was not impaired as fair values continued to exceed their carrying value. Fair value of our goodwill is determined based upon the discounted cash flows of the reporting units using a 9.5% discount. Assuming an increase in the discount rate to 11%, fair value would continue to exceed the respective carrying value of each automotive segment. At a 12% discount rate, however, the Company would have a goodwill impairment.

Stock-Based Compensation.    The Company has a stock-based employee compensation plan and has issued equity-based incentives in various forms. The Company continues to account for stock-based employee compensation using the intrinsic value method under Accounting Principles Board ("APB") No. 25 "Accounting for Stock Issued to Employees" and related interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under this plan had an exercise price equal to the market value of the underlying common stock on the date of grant. See also Note 21, Stock Options and Awards, to the Company's audited consolidated financial statements.

The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," to stock-based employee compensation.

				(In thousands, except per share amounts)
				January 2, 2005				December 28, 2003				December 29, 2002
Net loss attributable to common stock, as reported				$	(27,990	)		$	(84,590	)		$	(73,880	)
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects					(420	)			(1,740	)			(1,950	)
Pro forma net loss attributable to common stock				$	(28,410	)		$	(86,330	)		$	(75,830	)
Earnings (loss) per share:
Basic and diluted — as reported				$	(0.66	)		$	(1.98	)		$	(1.73	)
Basic and diluted — pro forma for stock-based compensation				$	(0.66	)		$	(2.02	)		$	(1.78	)

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

Comprehensive Income (Loss).    Comprehensive income (loss) is defined as net income and other changes in shareholders' equity from transactions and other events from sources other than shareholders. The components of comprehensive income include foreign currency translation, minimum pension liability and interest rate arrangements. Total accumulated other comprehensive income was $63.0 million, $45.5 million and $2.0 million as of January 2, 2005, December 28, 2003 and December 29, 2002, respectively. Total annual tax effects included in comprehensive income (loss) were $3.9 million, $8.4 million and $18.3 million as of January 2, 2005, December 28, 2003 and December 29, 2002, respectively.

Income Taxes.    Income taxes are accounted for using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to

57

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Self-Insurance Reserves.    The Company self-insures both a medical coverage program and a workers' compensation program for its employees. The determination of accruals and expenses for these benefits is dependent on claims experience and the selection of certain assumptions used by actuaries in evaluating incurred, but not yet reported amounts. Significant changes in actual experience under either program or significant changes in assumptions may affect self-insured medical or workers' compensation reserves and future experience. See also Note 24, Employee Benefit Plans.

Pension Plans and Postretirement Benefits Other Than Pensions.    Annual net periodic pension expense and benefit liabilities under defined benefit pension plans are determined on an actuarial basis. Assumptions used in the actuarial calculations have a significant impact on plan obligations and expense. Each September, the Company reviews the actual experience compared to the more significant assumptions used and make adjustments to the assumptions, if warranted. The healthcare trend rates are reviewed with the actuaries based upon the results of their review of claims experience. Discount rates are based upon an expected benefit payments duration analysis and the equivalent average yield rate for high-quality fixed-income investments. Pension benefits are funded through deposits with trustees and the expected long-term rate of return on fund assets is based upon actual historical returns modified for known changes in the market and any expected change in investment policy. Postretirement benefits are not funded and it is the Company's policy to pay these benefits as they become due.

Environmental Matters.    The Company is subject to the requirements of U.S. federal, state and local and non-U.S. environmental and safety health laws and regulations. These include laws regulating air emissions, water discharge and waste management. The Company recognizes environmental cleanup liabilities when a loss is probable and can be reasonably estimated. Such liabilities are generally not subject to insurance coverage.

Valuation of Long-Lived Assets.    The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets, when events or circumstances warrant such a review. The carrying value of a long-lived asset to be held and used is considered impaired when the anticipated separately identifiable undiscounted cash flows from such an asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds that fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Impairment losses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced for the cost to dispose of the assets. Effective January 1, 2002, the Company adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." See also Note 17, Asset Impairments and Restructuring Related Integration Actions.

Shipping and Handling Fees and Costs.    Prior to 2003, a portion of shipping and handling fees were included in the selling, general and administrative expenses category in the consolidated statement of operations. Shipping and handling expense included in selling, general and administrative accounts was $17.6 million in 2002.

Reclassifications.    Certain prior year amounts have been reclassified to reflect current year classification.

3.    New Accounting Pronouncements

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

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

classifies and measures certain financial instruments with characteristics of both liabilities and equity. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities, for which it is effective for the first fiscal period beginning after December 15, 2003. Due to the Company being a nonpublic entity as defined in SFAS No. 150, the Company adopted this Statement effective for the quarter ended March 28, 2004. As a result of its adoption of SFAS No. 150, the Company's redeemable preferred stock is classified as a long-term liability on its consolidated balance sheet effective as of the quarter ended March 28, 2004, and preferred stock dividends associated with this redeemable preferred stock are classified as other expense, net on its consolidated statement of operations beginning with the quarter ended March 28, 2004.

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act was signed into law. This law provides for a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to the benefit established by the law. The Company provides retiree drug benefits that exceed the value of the benefits that will be provided by Medicare Part D, and its eligible retirees generally pay a premium for this benefit that is less than the Part D premium. Therefore, the Company has concluded that these benefits are at least actuarially equivalent to the Part D program so that Metaldyne will be eligible for the basic Medicare Part D subsidy.

In the second quarter of 2004, a Financial Accounting Standards Board (FASB) Staff Position (FSP FAS 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003" ("FSP")) was issued providing guidance on the accounting for the effects of the Act for employers that sponsor postretirement health care plans that provide prescription drug benefits. The FSP is effective for the first interim or annual period beginning after June 15, 2004. The Company estimates the federal subsidy included in the law resulted in an approximate $7.0 million reduction in its postretirement benefit obligation. For 2004, the Company recognized a net reduction in postretirement expense of $0.9 million as a result of the anticipated subsidiary.

In October 2004, the U.S. government enacted the American Jobs Creation Act of 2004 ("Act"). This Act provides for a special one-time tax deduction of 85% of certain foreign earnings that are repatriated to the U.S. provided certain criteria are met. The Company is analyzing the provisions of the Act and the feasibility of several alternative scenarios for the potential repatriation of a portion of the earnings of its non-U.S. subsidiaries. In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations and therefore does not currently anticipate repatriation of earnings under the Act.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4," to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) should be recognized as current period charges, and that allocation of fixed production overheads to the costs of conversion be based on normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Accordingly, the Company will adopt SFAS No. 151 for the fiscal year beginning January 2, 2006. The Company is currently in the process of evaluating whether the adoption of this pronouncement will have a significant impact on its results of operations or financial position.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment." This Statement is a revision of SFAS No. 123, "Accounting for Stock-Based Compensation" and supercedes APB No. 25, "Accounting for Stock Issued to Employees." SFAS No. 123 (revised 2004) requires that the compensation cost relating to stock options and other share-based compensation transactions be recognized at fair value in financial statements. Due to the Company being a nonpublic entity as defined in SFAS No. 123 (revised 2004), this Statement is effective for the Company at the beginning of its fiscal year 2006. The Company will then be required to record any compensation expense using the fair value method in connection with option grants to after adoption. Management is currently reviewing the provisions of this Statement and will adopt it effective at the beginning of the Company's fiscal year 2006.

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

4.    Accounts Receivable Securitization and Factoring Agreements

The Company has entered into an arrangement to sell, on an ongoing basis, the trade accounts receivable of substantially all domestic business operations to MTSPC, Inc. ("MTSPC"), a wholly owned subsidiary of the Company. MTSPC from time to time may sell an undivided fractional ownership interest in the pool of receivables up to approximately $150 million to a third party multi-seller receivables funding company. The net proceeds of sale are less than the face amount of accounts receivable sold by an amount that approximates the purchaser's financing costs, which amounted to a total of $2.9 million, $2.6 million and $2.8 million in 2004, 2003 and 2002, respectively, and is included in other expense, net in the Company's consolidated statement of operations. At January 2, 2005 and December 28, 2003, the Company's funding under the facility was $63.3 million and zero, respectively, with $15 million available but not utilized at January 2, 2005 and $73.3 million available but not utilized at December 28, 2003. The discount rate at January 2, 2005 was 3.35% compared with 2.14% at December 28, 2003. The usage fee under the facility is 1.5%. In addition, the Company is required to pay a fee of 0.5% on the unused portion of the facility. This facility expires in November 2005. See Note 29, Subsequent Events.

The Company has entered into agreements with international invoice factoring companies to sell customer accounts receivable of Metaldyne foreign locations in France, Germany, Spain, United Kingdom and Mexico on a non-recourse basis. As of January 2, 2005 and December 28, 2003, the Company had available $63.5 million and $54.8 million from these commitments, and approximately $53.1 million and $45.5 million of receivables were sold under these programs, respectively. The Company pays a commission to the factoring company plus interest from the date the receivables are sold to the date of customer payment. Commission expense related to these agreements is recorded in other expense, net on the Company's consolidated statement of operations.

To facilitate the collection of funds from operating activities, the Company has entered into accelerated payment collection programs with certain customers. At January 2, 2005, the Company received approximately $24 million under the accelerated collection programs. The majority of the accelerated payment collection programs were discontinued as of or prior to January 2, 2005. However, since the beginning of 2004, the Company continues to collect approximately $22 million per month on an accelerated basis as a result of favorable payment terms that it negotiated with one of its customers, and that will run contractually through fiscal 2006. These payments are received on average 20 days after shipment of product to its customer. While the impact of the discontinuance of these programs may be partially offset by a greater utilization of the Company's accounts receivable securitization facility, the Company is examining other alternative programs in the marketplace, as well as enhanced terms directly from its customers.

5.    Inventories

				(In thousands)
				January 2, 2005				December 28, 2003
Finished goods				$	42,310			$	25,710
Work in process					36,440				29,480
Raw material					48,270				28,490
				$	127,020			$	83,680

6.    Equity Investments and Receivables in Affiliates

On December 22, 2004, the Company sold its 36% common equity investment in Saturn Electronics & Engineering, Inc. ("Saturn"), a privately held manufacturer of electromechanical and electronic automotive components, for gross consideration totaling $15 million. Holders of Metaldyne options with the exercise price below the November 2000 merger consideration and former holders of Metaldyne restricted stock were entitled to additional cash amounts from the proceeds of the disposition of Saturn

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

stock in accordance with the recapitalization agreement. Pursuant to modified agreements with former holders of the Company's common stock as of November 28, 2000, such holders received a portion of the net proceeds from this disposition of Saturn. Total consideration paid to the former stock holders was $2.4 million. The initial agreements with the former stock holders that were modified upon the disposition of Saturn are now terminated with no additional obligations required by the Company. The gain recognized on the disposition of Saturn was $5.1 million and is included in gain on sale of equity investments, net on the Company's consolidated statement of operations as of January 2, 2005.

On June 6, 2002, the Company sold 13.25 million shares of TriMas common stock to Heartland Industrial Partners ("Heartland") and other investors amounting to approximately 66% of the fully diluted common equity of TriMas. The Company retained approximately 34% of the fully diluted common equity of TriMas in the form of common stock and a presently exercisable warrant to purchase shares of TriMas common stock at a nominal exercise price. As Heartland is the Company's controlling shareholder, this transaction was accounted for as a reorganization of entities under common control and accordingly no gain or loss has been recognized. Consequently, as a result of this transaction, the Company (1) received $840 million in the form of cash, debt reduction and reduced receivables facility balances and (2) received or retained common stock and a warrant in TriMas representing the Company's 34% retained interest. TriMas is included in the Company's financial results through the date of this transaction. Effective June 6, 2002, the Company accounts for its retained interest in TriMas under the equity method of accounting. In April 2003, TriMas exercised its right to repurchase 1 million shares of its common stock from the Company for $20 per share, the same price that it was valued on June 6, 2002, the date of the Company's sale of TriMas.

On November 12, 2004, the Company sold approximately 924,000 shares of TriMas stock to Masco Corporation for $23 per share, or a total of $21.3 million. A gain on the sale of shares totaling $2.9 million was recognized and is included in gain on sale of equity investments, net on the Company's consolidated statement of operations as of January 2, 2005. As a result of this sale of shares to Masco in 2004, the repurchase of shares by TriMas in 2003 and acquisitions performed by TriMas in 2003, the Company's ownership in TriMas decreased to approximately 24%, or approximately 4.8 million shares, as of January 2, 2005. The carrying amount of the Company's investment in TriMas was approximately $102.8 million and $120 million as of January 2, 2005 and December 28, 2003, respectively. Masco Corporation owns approximately 6% of Metaldyne's outstanding shares. See also Note 28, Related Party Transactions.

In June 2004, the Company sold its interest in a Korean joint venture. A gain of $1.2 million was recognized in conjunction with this sale and is included with other, net in the Company's consolidated statement of operations as of January 2, 2005.

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

On December 31, 2003, the Company completed a transaction with DaimlerChrysler that transferred full ownership of the New Castle Machining and Forge manufacturing operations to Metaldyne. See also Note 16, Acquisitions.

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

The carrying amount of investments in affiliates at January 2, 2005 and December 28, 2003 was $103.1 million and $148.8 million, respectively. Approximate combined condensed financial data of the Company's equity affiliates accounted for under the equity method are as follows:

				(In thousands)
				January 2, 2005				December 28, 2003
Current assets				$	302,500			$	347,590
Long-term assets:
Property and equipment, net					198,610				212,030
Excess of cost over net assets of acquired companies					657,980				672,070
Intangible and other assets					304,910				322,750
Other assets					58,200				66,470
Total assets				$	1,522,200			$	1,620,910
Current liabilities				$	209,050			$	245,540
Long-term liabilities:
Long-term debt					735,030				766,060
Other long-term debt					172,960				195,010
Total liabilities				$	1,117,040			$	1,206,610

				(In thousands) For The Years Ended
				January 2, 2005				December 28, 2003				December 29, 2002
Net sales				$	1,045,160			$	1,305,450			$	1,110,530
Operating profit				$	62,360			$	31,370			$	94,500
Net income (loss)				$	(2,190	)		$	(66,280	)		$	(27,570	)

7.    Property and Equipment, Net

				(In thousands)
				January 2, 2005				December 28, 2003
Land and land improvements				$	17,370			$	15,120
Buildings					157,150				114,150
Machinery and equipment					976,670				779,360
					1,151,190				908,630
Less: Accumulated depreciation					(294,940	)			(201,180	)
Property and equipment, net				$	856,250			$	707,450

Depreciation expense totaled approximately $99 million, $76 million and $67 million in 2004, 2003 and 2002, respectively.

8.    Excess of Cost over Net Assets of Acquired Companies and Intangible Assets

At January 2, 2005, the excess of cost over net assets of acquired companies ("goodwill") balance was approximately $626.2 million. For purposes of testing this goodwill for potential impairment, fair values were determined based upon the discounted cash flows of the reporting units using a 9.5% discount rate as of January 2, 2005. The initial assessment for the reporting units within the Automotive Group indicated that the fair value of these units exceeded their corresponding carrying value. This analysis was

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

completed for the years ended January 2, 2005 and December 28, 2003, which indicated that the fair value of these units continued to exceed their carrying values. If the discount rate were to increase to 12%, or if anticipated operating profit were to decrease by approximately 1.6% of sales, the Company would be required to perform further analysis of goodwill impairment in the Company's Driveline segment.

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

Acquired Intangible Assets

				(In thousands, except weighted average life)
				As of January 2, 2005												As of December 28, 2003
				Gross Carrying Amount				Accumulated Amortization				Weighted Average Life				Gross Carrying Amount				Accumulated Amortization				Weighted Average Life
Amortized Intangible Assets:
Customer Contracts				$	127,600			$	(42,750	)		9.0 years				$	94,420			$	(31,050	)		8.2 years
Technology and Other					163,920				(45,260	)		14.9 years					165,280				(35,290	)		14.9 years
Total				$	291,520			$	(88,010	)		14.0 years				$	259,700			$	(66,340	)		13.6 years
Aggregate Amortization Expense
(Included in Cost of Sales):
For the year ended December 29, 2002								$	27,670
For the year ended December 28, 2003									21,630
For the year ended January 2, 2005									24,160
Estimated Amortization Expense:
For the year ended December 31, 2005									23,410
For the year ended December 31, 2006									23,410
For the year ended December 31, 2007									22,640
For the year ended December 31, 2008									21,890
For the year ended December 31, 2009									21,890

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

Goodwill

The carrying amounts of goodwill by segment for the years ended January 2, 2005 and December 28, 2003 are as follows:

				(In thousands)
				Chassis				Driveline				Engine				Total
Balance as of December 29, 2002				$	66,590			$	362,040			$	144,940				573,570
Exchange impact from foreign currency					—				9,190				6,740				15,930
Fittings disposition					(5,210	)			—				—				(5,210	)
Other					250				(220	)			70				100
Balance as of December 28, 2003					61,630				371,010				151,750			$	584,390
Exchange impact from foreign currency					—				9,860				3,750				13,610
New Castle acquisition					28,770				—				—				28,770
Other					—				(450	)			(80	)			(530	)
Balance as of January 2, 2005				$	90,400			$	380,420			$	155,420			$	626,240

9.    Intangible and Other Assets

				(In thousands)
				January 2, 2005				December 28, 2003
Customer contracts, net				$	84,850			$	63,370
Technology and other intangibles, net					118,660				129,990
Deferred loss on sale-leaseback transactions					10,410				21,320
Deferred financing costs, net					16,360				18,420
Other					11,190				14,080
Total				$	241,470			$	247,180

The "technology and other intangibles, net" category represents primarily patents and/or in-depth process knowledge embedded within the Company.

10.    Accrued Liabilities

				(In thousands)
				January 2, 2005				December 28, 2003
Workers' compensation and self insurance				$	17,240			$	17,070
Accrued exit and shutdown costs for plant closures					3,200				6,600
Salaries, wages and commissions					10,040				8,010
Legacy restricted common stock					—				17,170
Vacation, holiday and bonus					15,100				18,440
Interest					11,760				8,560
Property, payroll and other taxes					15,990				11,040
Pension					24,910				18,520
Other					18,810				31,430
Accrued liabilities				$	117,050			$	136,840

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)

11.    Long-Term Debt

Long-term debt consisted of the following:

				(In thousands)
				January 2, 2005				December 28, 2003
Senior credit facilities:
Term loan				$	351,080			$	352,000
Revolving credit facility					63,540				—
Total senior credit facility					414,620				352,000
11% senior subordinated notes, with interest payable semi-annually, due 2012					250,000				250,000
10% senior notes, with interest payable semi-annually, due 2013					150,000				150,000
10% senior subordinated notes, with interest payable semi-annually, due 2014 (face value $31.7 million)					27,180				—
Other debt (includes capital lease obligations)					25,900				25,810
Total				$	867,700			$	777,810
Less current maturities					(12,250	)			(10,880	)
Long-term debt				$	855,450			$	766,930

The maturities of the Company's total debt at January 2, 2005 during the next five years and beyond are as follows (in millions): 2005 — $12; 2006 — $4; 2007 — $66; 2008 — $2; 2009 — $356; 2010 and beyond — $433.

The senior credit facility includes a term loan and revolving credit facility with a principal commitment of $200 million. The Company had $71 million of undrawn and available commitments from our revolving credit facility at January 2, 2005.

The revolving credit facility matures on May 28, 2007 and the term loan matures on December 31, 2009. The obligations under the senior credit facility are collateralized by substantially all of the Company's and substantially all of its domestic subsidiaries' assets and are guaranteed by substantially all of the Company's domestic subsidiaries.

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Borrowings under the credit facility will bear interest, at our option, at either:

•	A base rate corresponding to the prime rate, plus an applicable margin; or

•	A eurocurrency rate on deposits, plus an applicable margin.

The applicable margin on revolving credit facility borrowings is subject to change depending on the Company's leverage ratio and is presently 3.25% on base rate loans and 4.25% on eurocurrency loans. The applicable margin on the term loan borrowing is dependent on the Company's leverage ratio and is currently 3.50% on base rate loans and 4.50% on eurocurrency loans. In December 2004, the Company obtained an amendment to its credit facility to, among other things, modify certain negative covenants. Under this amendment, the applicable interest rate spreads on the Company's term loan obligations increased from 4.25% to 4.50% over the current London Interbank Offered Rate ("LIBOR") and the leverage covenant was modified to be less restrictive. Prior to this, in July 2003, the Company obtained an amendment to its credit facility to, among other things, permit the $150 million offering of 10% senior subordinated notes and the use of proceeds to complete the December 31, 2003 acquisition of DaimlerChrysler's common and preferred interest in the New Castle joint venture and modify certain negative and affirmative covenants. Under this amendment, the applicable interest rate spreads on the Company's term loan obligations increased from 2.75% to 4.25% over LIBOR.

At January 2, 2005, the Company was contingently liable for standby letters of credit totaling $65 million issued on its behalf by financial institutions. These letters of credit are used for a variety of purposes, including meeting requirements to self-insure workers' compensation claims and for the completion of the Company's acquisition of the New Castle manufacturing operations on December 31, 2003.

The senior credit facility contains covenants and requirements affecting the Company and its subsidiaries, including a financial covenant requirement for an Earnings Before Interest Taxes Depreciation and Amortization ("EBITDA") to cash interest expense coverage ratio to exceed 2.10 through April 3, 2005, 2.15 through July 3, 2005, 2.20 through October 2, 2005, increasing to 2.30 through April 2, 2006; and a debt to EBITDA leverage ratio not to exceed 5.25 through July 3, 2005, decreasing to 5.00 and 4.75 for the quarters ending October 2, 2005 and January 1, 2006, respectively. The Company was in compliance with the preceding financial covenants throughout the year.

Other debt includes borrowings by the Company's subsidiaries denominated in foreign currencies and capital lease obligations.

On December 31, 2003, the Company issued $31.7 million of 10% senior subordinated notes due 2014 to DaimlerChrysler. These notes have a carrying amount of $27.2 million as of January 2, 2005. The notes were issued as part of the financing of the New Castle acquisition.

In October 2003, the Company issued $150 million of 10% senior notes due 2013 in a private placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended. As these notes were not registered within 210 days after the closing date, the annual interest rate increased by 1% until the registration statement is declared effective. The net proceeds from this offering were used to redeem the balance of the $98.5 million aggregate principal amount of the outstanding 4.5% subordinated debentures ($91 million reflected on the balance sheet at December 29, 2002) that were due December 15, 2003, and to repay $46.6 million of the term loan debt under the Company's credit facility. In connection with this financing, the Company agreed with its banks to decrease the revolving credit facility from $250 million to $200 million.

Certain of the Company's domestic wholly owned subsidiaries, as defined in the related bond indentures, (the "Guarantors") irrevocably and unconditionally fully guarantee the 11% senior subordinated and 10% senior notes. The condensed consolidating financial information included in Note 31 presents the financial position, results of operations and cash flows of the guarantors.

In connection with the Company's early retirement of its existing term debt and refinancing of its prior credit facility in 2002, it incurred one-time charges totaling $76.4 million, including prepayment

66

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

penalties, write-offs of capitalized debt issuance costs, a write-off of the unamortized discount on the 4.5% subordinated debenture and losses realized on interest rate arrangements associated with the term loans. Of the total charges of $76.4 million, a loss of $7.5 million is reflected as a "loss on interest rate arrangements upon early retirement of term loans" in other expense, net in the Company's consolidated statement of operations for the year ended December 29, 2002 (see Note 14, Derivative Financial Instruments). In accordance with SFAS No. 145, the remaining $68.9 million of costs are reflected as a "loss on repurchase of debentures and early retirement of term loans" in other expense, net in the Company's consolidated statement of operations for the year ended December 29, 2002.

In 2004, the Company capitalized $1.4 million of debt issuance costs associated with the amended credit facility. In 2003, the Company capitalized $6.4 million and $2.3 million of debt issuance costs associated with the 10% senior subordinated notes due 2013 and the amended credit facility, respectively. As a result of the 2004 credit facility amendment, $1.2 million of the unamortized balance related to the 2003 credit facility amendment was expensed in 2004. These debt issuance costs consist of fees paid to representatives of the initial purchasers, legal fees and facility fees paid to the lenders. The $6.4 million of costs are being amortized based on the effective interest method over the 10-year term of the 10% senior notes due 2013, and the credit facility amendment costs are being amortized based on the effective interest method over the 6.5-year term of the term loan agreement. The unamortized balances of $5.6 million related to the senior notes and $2.0 related to the amended credit facility are included in "other assets" in the Company's consolidated balance sheet as of January 2, 2005.

12.    Leases

The Company leases certain property and equipment under operating and capital lease arrangements that expire at various dates through 2023. Most of the operating leases provide the Company with the option, after the initial lease term, either to purchase the property or renew its lease at the then fair value. Rent expense was $49.5 million, $38.7 million and $38.2 million for the years ended January 2, 2005, December 28, 2003, and December 29, 2002, respectively.

The Company completed sale-leaseback financings from 2000 through 2004 relating to certain equipment and buildings, the proceeds of which were used to finance new capital purchases and to pay down the revolving credit and term loan facilities. Due to the sale-leaseback financings, the Company has significantly increased its commitment to future lease payments.

In December 2004, the Company entered into two sale-leaseback transactions for machinery and equipment with third party lessors. The Company received cash proceeds of $11.8 million and $7.2 million as part of these two transactions. On June 17, 2004, the Company entered into a sale-leaseback transaction for machinery and equipment whereby it received cash proceeds of $7.5 million cash as part of this transaction. Each of these three sale-leasebacks is accounted for as an operating lease with combined annual lease expense of approximately $5 million which is included in the Company's financial results on a straight-line basis. On December 31, 2003, the Company entered into a sale-leaseback with proceeds of approximately $4.5 million. This lease was accounted for as a capital lease and is included in long-term debt in the Company's consolidated balance sheet as of January 2, 2005. The Company also entered into a $65 million sale-leaseback on December 31, 2003, as part of its financing related to the purchase of New Castle. This lease for New Castle equipment is accounted for as an operating lease and the annual lease expense is approximately $10 million.

In March 2003, the Company entered into a sale-leaseback transaction with respect to certain manufacturing equipment for proceeds of approximately $8.5 million, and in October 2003, the Company entered into a sale-leaseback transaction for machinery and equipment for additional proceeds of $8.5 million. All of these leases are accounted for as operating leases and the associated rent expense is included in the Company's financial results on a straight-line basis.

In December 2001 and January 2002, the Company entered into additional sale-leaseback transactions with respect to equipment and approximately 20 real properties for net proceeds of approximately

67

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

$56 million and used the proceeds to repay a portion of its term debt under the credit facility. In December 2002, three additional sale-leaseback transactions were completed with respect to equipment for net proceeds of approximately $19 million. Of the $56 million in proceeds resulting from the December 2001 and January 2002 sale-leaseback transactions, approximately $21 million were from the sale of TriMas properties.

In June 2001, a subsidiary of the Company sold and leased back equipment under a synthetic sale-leaseback structure. At closing, the Company provided a guarantee of all obligations of its subsidiary under the lease. At the end of the lease (including the expiration of all renewal options through 2007) the Company has the option of either purchasing all of the equipment for approximately $10 million or returning the equipment to the lessor under the lease. In the event the equipment is returned, the Company and lessor shall arrange for the disposition of the equipment. At such time the Company is obligated to pay approximately $10 million to the lessor and is entitled to receive from the lessor a residual value equal to approximately $1.4 million plus proceeds from the disposition of the equipment for the extent such proceeds exceed $1.4 million.

Deferred losses are recorded as part of the sale-leaseback transactions, and represent the difference between the carrying value of the assets sold and proceeds paid at closing by the leasing companies. Fair value was equal to or in excess of the carrying value of these assets based on asset appraisal information provided by third party valuation firms. These deferred amounts are being amortized, instead of being currently recognized, on a straight-line basis over the lives of the respective leases as required under SFAS No. 28, "Accounting for Sales with Leasebacks." Future amortization amounts relate to the remaining portion of the 2000 and 2001 sale-leaseback deferred losses. Amortization expense of deferred losses on sale-leasebacks was $8.8 million and $8.9 million for the years ended January 2, 2005 and December 28, 2003, respectively, and is included in cost of sales. Unamortized deferred losses on sale-leasebacks are $10 million and $21 million at January 2, 2005 and December 28, 2003, respectively.

Future minimum lease payments under scheduled capital and operating leases that have initial or remaining noncancelable terms in excess of one year as of January 2, 2005 are as follows:

				(In thousands)
				Capital Leases				Operating Leases
2005				$	5,290			$	52,040
2006					2,400				49,620
2007					1,250				48,050
2008					840				40,260
2009					790				33,310
Thereafter					790				129,220
Total minimum payments				$	11,360			$	352,500
Amount representing interest					(1,270	)
Obligations under capital leases					10,090
Obligations due within 1 year					(5,290	)
Long-term obligations under capital leases				$	4,800

13.    Redeemable Preferred Stock

The Company has outstanding 644,540 shares of $64.5 million in liquidation value ($56.2 million fair value as of January 2, 2005) of Series A-1 preferred stock par value $1 and authorized 644,540 shares to DaimlerChrysler Corporation. The Company will accrete from the fair value to the liquidation value ratable over the ten-year period. The preferred stock is mandatorily redeemable on December 31, 2013. Series A-1 preferred stockholders are entitled to receive, when, as and if declared by the Company's board

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

of directors, cumulative quarterly cash dividends at a rate of 11% per annum plus 2% per annum for any period for which there are any accrued and unpaid dividends.

The Company has outstanding 361,001 shares of $36.1 million in liquidation value ($34.3 million fair value as of January 2, 2005) of Series A preferred stock par value $1 and authorized 370,000 shares to Masco Corporation. The Company will accrete from the fair value to the liquidation value ratably over the twelve-year period. The preferred stock is mandatorily redeemable on December 31, 2012. Series A preferred stockholders are entitled to receive, when, as and if declared by the Company's board of directors, cumulative quarterly cash dividends at a rate of 13% per annum for periods ending on or prior to December 31, 2005 and 15% per annum for periods after December 31, 2005 plus 2% per annum for any period for which there are any accrued and unpaid dividends.

The Company has outstanding 184,153 shares with a fair value of $18.4 million of redeemable Series B preferred stock to Heartland. The redeemable Series B preferred shares issued are mandatory redeemable on June 15, 2013. The Series B preferred stockholders are entitled to receive, when, as and if declared by the Company's Board of Directors, cumulative semi-annual cash dividends at a rate of 11.5% per annum. Heartland Industrial Partners ("Heartland") purchased all of the outstanding shares of Series B preferred stock from former GMTI shareholders on December 31, 2003.

Preferred stock dividends (including accretion of $1.1 million in 2004) were $19.9 million and $9.3 million, while dividend cash payments were zero, for the years ended January 2, 2005 and December 28, 2003, respectively. Thus, unpaid accrued dividends were $40.3 million and $21.4 million for the years ended January 2, 2005 and December 28, 2003, respectively. Redeemable preferred stock, consisting of outstanding shares and unpaid dividends, was $149.2 million and $74.0 million in the Company's consolidated balance sheet at January 2, 2005 and December 28, 2003, respectively.

14. Derivative Financial Instruments

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

In February 2001, the Company entered into interest rate protection agreements with various financial institutions to hedge a portion of its interest rate risk related to the term loan borrowings under its credit facility. These agreements included two interest rate collars with a term of three years, a total notional amount of $200 million, and a three-month LIBOR interest rate cap and floor of 7% and approximately 4.5%, respectively. The agreements also included four interest rate caps at a three-month LIBOR interest rate of 7% with a total notional amount of $301 million as of December 28, 2003.

All of the Company's interest rate protection arrangements matured in February 2004 and, as a result of their maturity, a cumulative pre-tax non-cash gain of $6.6 million was recorded and is reflected as a non-cash gain on maturity of interest rate arrangements in the Company's consolidated statement of operations for the year ended January 2, 2005. Prior to their maturity, $6.6 million net of tax was included in accumulated other comprehensive income related to these arrangements. Prior to the expiration of these agreements, the Company recognized additional interest expense of $1.1 million and $6.5 million for the years ended January 2, 2005 and December 28, 2003, respectively.

15. Segment Information

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

The Company has established Adjusted Earnings Before Interest Taxes Depreciation and Amortization ("Adjusted EBITDA") as a key indicator of financial operating performance. The Company

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

defines Adjusted EBITDA as net income (loss) before cumulative effect of accounting change and before interest, taxes, depreciation, amortization, asset impairment, non-cash losses on sale-leaseback of property and equipment and non-cash restricted stock award expense. Adjusted EBITDA is a non-GAAP measure and therefore caution must be exercised in using Adjusted EBITDA as an analytical tool and should not be used in isolation or as a substitute for analysis of our results as reported under GAAP. In evaluating Adjusted EBITDA, management deems it important to consider the quality of the Company's underlying earnings by separately identifying certain costs undertaken to improve the Company's results, such as costs related to consolidating facilities and businesses in an effort to eliminate duplicative costs or achieve efficiencies, costs related to integrating acquisitions and restructuring costs related to expense reduction efforts.

In the second quarter of 2002, the Company modified its organizational structure. As a result, the Company is comprised of three reportable segments: Chassis, Driveline and Engine. In 2003, the Company moved one of its European operations that had historically been part of the Chassis segment to the Engine segment, and moved one of its domestic operations that had historically been part of the Driveline segment to the Engine segment. In 2004, the Company moved one of its North American operations that had historically been part of the Engine segment to the Chassis segment. The 2003 amounts have been restated to reflect this transfer. However, as operations within this transferred facility were moved to other locations in 2003, 2002 amounts have not been restated.

As discussed in Note 18, Disposition of Businesses, the Company completed a divestiture of a portion of its TriMas Group on June 6, 2002. The TriMas Group is presented at the group level, rather than by segment, for all periods presented. Subsequent to June 6, 2002, the Company's equity investment in TriMas and equity share in TriMas' earnings (loss) is included in "Automotive/centralized resources ("Corporate")."

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

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

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

The Company's export sales approximated $333 million, $149 million and $174 million in 2004, 2003 and 2002, respectively. Intercompany sales for 2004 were $8 million and $3 million for the Driveline and Engine segments, respectively. Intercompany sales are recognized in accordance with the Company's revenue recognition policy and are eliminated in consolidation.

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Segment activity for the years ended January 2, 2005, December 28, 2003 and December 29, 2002 is as follows:

				(In thousands)
				2004				2003				2002
Sales
Automotive Group
Chassis				$	583,620			$	143,590			$	143,650
Driveline					784,460				790,750				807,010
Engine					636,180				573,860				512,960
Automotive Group					2,004,260				1,508,200				1,463,620
TriMas Group					—				—				328,580
Total Sales				$	2,004,260			$	1,508,200			$	1,792,200
Adjusted EBITDA
Automotive Group
Chassis				$	44,960			$	12,350			$	13,520
Driveline					64,070				71,590				100,590
Engine					96,290				81,780				63,370
Automotive Operating					205,320				165,720				177,480
Automotive/centralized resources ("Corporate")					(34,650	)			(31,720	)			(17,250	)
Automotive Group				$	170,670			$	134,000			$	160,230
TriMas Group					—				—				62,400
Total Adjusted EBITDA					170,670				134,000				222,630
Depreciation & amortization					(132,100	)			(106,350	)			(107,430	)
Legacy stock award expense					(560	)			(3,090	)			(4,880	)
Asset impairment					—				(4,870	)			—
Loss from operations due to sale of manufacturing facilities					(7,600	)			—				—
Non-cash charges					(1,000	)			610				(1,610	)
Operating profit				$	29,410			$	20,300			$	108,710
Income Taxes
Automotive Group
Chassis				$	—			$	—			$	—
Driveline					(780	)			8,740				13,150
Engine					4,350				7,360				2,850
Automotive Group					3,570				16,100				16,000
Corporate					(40,440	)			(24,760	)			(56,960	)
Total				$	(36,870	)		$	(8,660	)		$	(40,960	)

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Financial Summary by Segment:

				(In thousands)
				2004				2003				2002
Total Assets:
Automotive Group
Chassis				$	338,650			$	135,560			$	148,260
Driveline					926,920				967,790				865,120
Engine					574,630				525,190				653,700
Automotive Group					1,840,200				1,628,540				1,667,080
TriMas Group					—				—				—
Corporate					354,550				383,320				350,910
Total				$	2,194,750			$	2,011,860			$	2,017,990
Capital Expenditures:
Automotive Group
Chassis				$	36,690			$	24,120			$	14,500
Driveline					46,710				45,110				36,470
Engine					68,090				47,410				49,310
Automotive Group					151,490				116,640				100,280
TriMas Group					—				—				9,960
Corporate					950				14,080				6,210
Total				$	152,440			$	130,720			$	116,450
Depreciation and Amortization:
Automotive Group
Chassis				$	27,300			$	7,630			$	5,330
Driveline					54,940				53,540				45,480
Engine					39,290				35,980				30,630
Automotive Group					121,530				97,150				81,440
TriMas Group					—				—				16,000
Corporate					10,570				9,200				9,990
Total				$	132,100			$	106,350			$	107,430

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table presents the Company's revenues for each of the years ended January 2, 2005, December 28, 2003 and December 29, 2002, and total assets and long lived assets (defined as equity investments and receivables in affiliates, net fixed assets, intangible and other assets and excess of cost over net assets of acquired companies) at each year ended January 2, 2005 and December 28, 2003, by geographic area, attributed to each subsidiary's continent of domicile (in thousands). Revenue and total assets from no single foreign country were material to the consolidated revenues and net assets of the Company.

				(In thousands)
				2004												2003												2002
				Sales				Total Assets				Long Lived Assets				Sales				Total Assets				Long Lived Assets				Sales
Europe				$	334,780			$	435,500			$	364,270			$	296,540			$	400,420			$	339,950			$	247,370
Australia					—				—				—				—				—				—				10,850
Other North America					71,930				85,690				62,580				50,200				55,610				44,690				56,150
Other foreign					17,420				32,290				23,450				7,890				6,820				4,320				6,160
Total foreign				$	424,130			$	553,480			$	450,300			$	354,630			$	462,850			$	388,960			$	320,530
United States				$	1,580,130			$	1,641,270			$	1,380,700			$	1,153,570			$	1,549,010			$	1,305,850			$	1,471,670

A significant percentage of the Automotive Group's revenues is from four major customers. The following is a summary of the percentage of Automotive Group revenue from these customers for the fiscal year ended:

				January 2, 2005				December 28, 2003				December 29, 2002(1)
Ford Motor Company					12.5	%			16.9	%			17.5	%
DaimlerChrysler Corporation					24.4	%			10.5	%			12.0	%
General Motors Corporation					7.2	%			10.3	%			12.0	%
New Venture Gear(2)					—				8.2	%			11.5	%

(1)	Excludes net sales to TriMas prior to our June 6, 2002 divestiture.

(2)	New Venture Gear, a joint venture between DaimlerChrysler and General Motors, was dissolved in 2003. Therefore, comparable 2004 sales are now split between DaimlerChrysler, General Motors and other Tier 1 customers.

16.    Acquisitions

In the first quarter of 2004, effective December 31, 2003, the Company completed a transaction with DaimlerChrysler Corporation ("DaimlerChrysler") that transferred full ownership of the New Castle Machining and Forge ("New Castle") manufacturing operations to Metaldyne. From January 2003 until the transaction at December 31, 2003, New Castle was managed as a joint venture between Metaldyne and DaimlerChrysler; at December 28, 2003, the Company's investment in this joint venture was approximately $20 million (before fees and expenses of approximately $2 million). The New Castle facility manufactures suspension and powertrain components for Chrysler, Jeep and Dodge vehicles; additionally, Metaldyne has launched initiatives to expand the customer base beyond DaimlerChrysler. The New Castle manufacturing operations are part of the Company's Chassis segment.

As part of the New Castle transaction, Metaldyne acquired Class A and Class B units representing DaimlerChrysler's entire joint venture interest in New Castle. In exchange, Metaldyne delivered to DaimlerChrysler $215 million (before fees and expenses of approximately $3 million), comprised of $118.8 million in cash; $31.7 million (fair value of $26.9 million as of December 31, 2003) in aggregate principal amount of a new issue of its 10% senior subordinated notes; and $64.5 million (fair value of $55.3 million as of December 31, 2003) in aggregate liquidation preference of its Series A-1 preferred stock. Included in the $5 million fees and expenses is a $2.4 million transaction fee paid to Heartland Industrial

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Partners (Heartland") pursuant to the acquisition of New Castle. The cash portion of the consideration was funded in part by the net cash proceeds of approximately $58 million from the sale-leaseback of certain machinery and equipment with a third-party lessor, with the remainder funded through Metaldyne's revolving credit facility.

The fair value of assets and liabilities of New Castle at December 31, 2003 consisted of the following (in thousands):

Current assets				$	13,370
Property and equipment, net					109,020
Intangible assets, customer contracts					32,880
Goodwill					28,770
Total assets					184,040
Total liabilities (including deferred taxes of $1,690)					15,800
Net assets				$	168,240

In connection with the acquisition of New Castle, the Company recorded $33.6 million of tax deductible goodwill that is amortizable over a 15 year period. The tax deductible goodwill in excess of goodwill recorded in connection with the transaction for financial reporting purposes is attributable to the unamortized accretion, as of the issue date, of the 10% senior subordinated notes.

The following unaudited pro forma financial information summarizes the results of operations for the Company for the year ended December 28, 2003 assuming the New Castle acquisition had been completed as of the beginning of the period.

				(In thousands)
				Year Ended December 28, 2003 (Unaudited)
Net sales				$	1,886.7
Net loss attributable to common stock					(108.1	)
Loss per share					(2.53	)

In addition to the purchase accounting adjustments, the pro forma results reflect a reduction in sales to contractual sales prices and a reduction in labor costs related to the employee agreement with DaimlerChrysler.

Historically revenue for the New Castle facility was determined based upon the sale of product to DaimlerChrysler assembly plants within North America and to third party customers not related to DaimlerChrysler based upon New Castle's standard cost of production. For pro forma presentation, an adjustment of $19 million has been made to reduce net sales based upon the contract with DaimlerChrysler.

The historical results reflect labor costs based upon existing labor agreements. For pro forma purposes, an adjustment of $54 million has been made to reflect the reduction in employee costs based upon the employee matters agreement with DaimlerChrysler.

On May 15, 2003, the Company acquired a facility in Greensboro, North Carolina, from Dana Corporation ("Dana") for approximately $7.7 million at closing and agreed to pay an additional $1.4 million in cash over a period of time ending on December 31, 2004. The Company may also be obligated to pay up to an additional $1.4 million in cash conditioned upon being awarded new business by June 30, 2005 valued at least at $1.4 million. The Greensboro facility became part of the Driveline segment's Transmission and Program Management division. The Greensboro operation, which employs approximately 140 people, machines cast iron and aluminum castings, including various steering knuckles and

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

aluminum carriers for light truck applications. The results of operations of the facility have been included in the consolidated financial statements since that date.

In connection with the acquisition of the Greensboro location, the Company entered into a long-term lease agreement with a third party on the facility. This lease is accounted for as an operating lease with annual lease expense of approximately $1.1 million.

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

17.    Asset Impairments and Restructuring Related Integration Actions

In 2004, the Company entered into several restructuring arrangements whereby it incurred approximately $2.8 million of costs associated with severance for the year ended January 2, 2005. Charges incurred by segment are as follows: Chassis Group $0.1 million relating to headcount reduction initiatives; Driveline Group $1.8 million primarily relating to charges associated with the closure of a facility in Europe; Engine Group $0.1 million relating to headcount reduction initiatives; and Corporate $0.8 million primarily relating to headcount reductions. In fiscal 2003, the Company entered into several restructuring arrangements whereby it incurred approximately $13.1 million of costs associated with severance and facility closures. These actions include the completion of the Engine segment's European operation reorganization that was initiated in fiscal 2002 and completed in the first quarter of 2003 and actions within the Driveline segment's forging operations and administrative departments to eliminate redundant headcount and adjust costs to reflect the decline in the Company's forging revenue in 2003. Also included in this charge were severance costs to replace certain members of the Company's executive management team and the costs to restructure several departments in the Company's corporate office, including the sales, human resources and information technology departments. The Company expects to realize additional savings from the 2004 and 2003 restructuring actions, described above, in 2005 as reductions in employee-related expenses recognized in both cost of goods sold and selling, general and administrative expense.

In June 2002, the Company announced the reorganization of its Engine segment's European operations, to streamline the engineering, manufacturing and reporting structure of its European operations. This restructuring includes the closure of a manufacturing facility in Halifax, England. In addition, the Company announced the closure of a small manufacturing location in Memphis, Tennessee and management restructuring within its North American engine operations.

The following table summarizes the activity for the accruals established relating to the three acquisitions, as well as additional restructuring activities in 2002, and 2003 and 2004. Adjustments to previously recognized acquisition related severance and exit costs were reversed to goodwill.

75

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

				(In thousands)
				Acquisition Related								2002 Additional Severance And Other Exit Costs				2003 Additional Severance And Other Exit Costs				2004 Additional Severance And Other Exit Costs				Total
				Severance Costs				Exit Costs
Balance at December 29, 2002				$	9,880			$	540			$	2,380			$	—			$	—			$	12,800
Charges to expense					—				—				—				13,130				—				13,130
Cash payments					(8,110	)			(540	)			(2,020	)			(5,820	)			—				(16,490	)
Reversal of unutilized amounts					(390	)			—				—				—				—				(390	)
Balance at December 28, 2003				$	1,380			$	—			$	360			$	7,310			$	—			$	9,050
Charges to expense					—				—				—				—				2,750				2,750
Cash payments					(310	)			—				(360	)			(4,600	)			(2,240	)			(7,510	)
Reversal of unutilized amounts					(360	)			—				—				—				—				(360	)
Balance at January 2, 2005				$	710			$	—			$	—			$	2,710			$	510			$	3,930

The above amounts represent total estimated cash payments, of which $3.2 million and $6.5 million are recorded in accrued liabilities, with $0.7 million (which will primarily be paid out in fiscal 2006) and $2.6 million recorded in other long-term liabilities in the Company's consolidated balance sheet at January 2, 2005 and December 28, 2003, respectively.

18.    Disposition of Businesses

On February 1, 2004, the Company completed an asset sale pursuant to which substantially all of the business associated with two of the aluminum die casting facilities in its Driveline segment was sold to Lester PDC, Ltd, a Kentucky-based aluminum die casting and machining company. The Company retained an interest in approximately $5.6 million in working capital (principally accounts receivable). Cash paid in the transaction to buy out the remaining portion of the equipment that had previously been sold under an operating lease arrangement by the Company was approximately $6.1 million, net of proceeds from Lester PDC of $4.1 million. The buyer also agreed to lease the Bedford Heights, Ohio and sub-lease the Rome, Georgia facilities from the Company for total annual lease payment of approximately $0.6 million. In addition, Lester PDC and Metaldyne entered into a supply agreement. These facilities had 2003 combined sales of approximately $62 million and an operating loss of approximately $14 million. Both manufacturing operations were part of the Company's Driveline segment. In connection with the disposition of these manufacturing facilities, the Company recognized a charge of $7.6 million on the Company's consolidated statement of operations for the year ended January 2, 2005. The charge represents the book value of approximately $12 million in fixed assets and deferred financing fees offset by the $4.1 million in cash consideration paid by Lester PDC for the assets.

In November 2004, Lester PDC discontinued operations at the Bedford Heights facility and the supply agreement and lease agreement between Lester PDC and Metaldyne were terminated. As a result, Metaldyne assumed production of some of the products at the Bedford Heights facility that were subject to the terminated supply agreement. One of these product lines is currently being manufactured at the Bedford Heights facility and the remaining products have been moved to other Metaldyne facilities. The lease agreement represented annual lease revenue to Metaldyne of approximately $0.2 million.

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

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

19.    Other Income (Expense), Net

				(In thousands)
				2004				2003				2002
Other, net:
Interest income				$	1,390			$	470			$	1,140
Debt fee amortization					(3,880	)			(2,480	)			(4,770	)
Accounts receivable securitization financing fees					(2,950	)			(2,630	)			(2,840	)
Foreign currency gains (losses)					(940	)			(1,010	)			(200	)
Other, net					(1,890	)			(2,430	)			(2,310	)
Total other, net				$	(8,270	)		$	(8,080	)		$	(8,980	)

20.    Supplementary Cash Flow Information

Significant transactions not affecting cash were: in 2004, the $7.6 million loss on the disposition of manufacturing facilities as a result of the sale of Bedford Heights, Ohio and Rome, Georgia facilities, the $6.6 million gain on the maturity of interest rate arrangements in February 2004, the $1.5 million equity earnings from affiliates and the $3.2 million loss on disposal of fixed assets; in 2003, the asset impairment of $4.9 million from discontinued operations as a result of the sale of the Bedford Heights, Ohio and Rome, Georgia manufacturing facilities completed in February 2004, the $15 million loss on disposal of fixed assets and the $21 million loss from the Company's equity affiliates; and in 2002, the cumulative effect of change in recognition and measurement of goodwill impairment of $36.6 million, the loss on early extinguishment of debt of $68.9 million and the $7.5 million loss on interest rate arrangements. Also refer to Note 18, Disposition of Businesses, for the impact of the TriMas disposition on cash flows.

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METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

21.    Stock Options and Awards

The Company has a stock-based employee compensation plan and has issued equity-based incentives in various forms. At January 2, 2005, the Company has stock options and units outstanding to key employees of the Company for approximately 0.9 million shares at a price of $16.90 per share, 1.0 million shares at a price of $8.50 per share and 0.8 million shares at a price of $6.50 per share. However, these options and units are required to be held and cannot be exercised until the elapse of a certain time period after a public offering.

Beginning in 2004, the Company offered eligible employees the opportunity to participate in a new Voluntary Stock Option Exchange Program (the "Program"), to exchange all of their outstanding options to purchase shares of the Company's common stock granted under the Plan for new stock options and restricted stock units to be granted under the Plan. Participation in the Program is voluntary; however, elections were required to be received by January 14, 2004, with new stock options to be granted on or after July 15, 2004 and restricted stock units granted on January 15, 2004. Non-eligible participants in the existing Plan and those eligible employees not electing to participate in the new Program will continue to be eligible to participate in the existing Plan. Stock compensation expense for the year ended January 2, 2005 was $0.6 million.

Prior to November 2001, the Company's Long Term Stock Incentive Plan provided for the issuance of stock-based incentives. The Company granted long-term stock awards, net, for approximately 0.4 million shares of Company common stock during 2000 (prior to the recapitalization) to key employees of the Company. The weighted average fair value per share of long-term stock awards granted during 2000 on the date of grant was $13. Compensation expense for the vesting of long-term stock awards was approximately $3.1 million and $4.9 million in 2003 and 2002, respectively, and is included with selling, general and administrative expenses in the Company's consolidated statement of operations. Prior to the recapitalization merger, the unamortized value of unvested stock awards were generally amortized over a ten-year vesting period and were recorded in the financial statements as a deduction from shareholders' equity.

As part of the recapitalization, the Company cancelled outstanding stock awards and made new restricted stock awards to certain employees of approximately 3.7 million shares of Company common stock. Under the terms of the recapitalization agreement, those shares become free of restriction, or vest, as to one-quarter upon the closing of the recapitalization merger and one-quarter in each of January 2002, 2003 and 2004. Holders of restricted stock were entitled to elect cash in lieu of 40% of their respective stock, which vested at the closing of the recapitalization merger. On each of the subsequent vesting dates, holders of restricted stock may elect to receive all of the installment in common shares, 40% in cash and 60% in common shares, or 100% of the installment in cash. The number of shares to be received will increase by 6% per annum and any cash to be received will increase by 6% per annum from the $16.90 per share recapitalization consideration.

As a result of the ability of the holder to elect a partial or full cash option, the restricted shares were classified as redeemable restricted common stock on the Company's consolidated balance sheet. There were approximately 0.8 million restricted shares outstanding at December 28, 2003. At December 28, 2003, holders of unvested awards had elected the cash option for approximately $16.0 million of the January 14, 2004 vesting. A portion of this obligation belongs to the Company's former TriMas subsidiary, but the Company must continue to record TriMas' portion of the redeemable restricted common stock recognized on its consolidated balance sheet. The entire portion of the January 14, 2004 vesting amount of $17.2 million was recorded as accrued liabilities on the Company's consolidated balance sheet as of December 28, 2003. TriMas' portion, consisting of approximately 45% of total obligations, is included in the above restricted stock amounts as of December 28, 2003.

78

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

A summary of the status of the Company's stock options and units granted under the Plan for the three years ended 2004, 2003 and 2002 is as follows:

				(Shares in thousands)
				2004				2003				2002
Option shares outstanding, beginning of year					2,661				2,539				2,855
Weighted average exercise price				$	16.90			$	16.90			$	16.90
Option and unit shares granted					1,983				306				153
Weighted average exercise price				$	7.58			$	16.90			$	16.90
Option and unit shares exercised					—				—				—
Weighted average exercise price					—				—				—
Option and unit shares cancelled due to forfeitures					(109	)			(184	)			(469	)
Option shares exchanged for units					(1,799	)			—				—
Weighted average exercise price				$	16.90			$	16.90			$	16.90
Option and unit shares outstanding, end of year					2,736				2,661				2,539
Weighted average exercise price				$	10.57			$	16.90			$	16.90
Weighted average remaining option term (in years)					6.5				7.5				8.5
Option and unit shares exercisable, end of year					—				—				—
Weighted average exercise price					—				—				—

The weighted average exercise price of long-term stock awards is $10.57 per share at January 2, 2005. A combined total of approximately 4.9 million shares of Company common stock was available for the granting of options and incentive awards under the above plans in 2004, 2003 and 2002.

The weighted average fair value on the date of grant of options granted was zero in 2004, 2003 and 2002. Had stock option compensation expense been determined pursuant to the methodology of SFAS No. 123, the pro forma effects on the Company's basic earnings per share would have been no effect in 2004 and a reduction of approximately $0.04 in each of 2003 and 2002. The fair value of the Company's stock at the date of grant was $4.80 (assuming the removal of the lack of marketability and minority discount applied for purposes of this stock valuation, the value would range between $8.50 and $9.00 per share), $8.50 and $11.32 in 2004, 2003 and 2002, respectively.

The fair value of the options was estimated at the date of grant using the minimum value method for 2004, 2003 and 2002, with no assumed dividends or volatility, a weighted average risk-free interest rate of 3.67% in 2004 and 3.36% in 2003, and an expected option life of 5.5 years in both 2004 and 2003.

79

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

22.    Loss Per Share

The following provides a reconciliation of the numerators and denominators used in the computations of basic and diluted loss per common share:

				(In thousands except per share amounts)
				2004				2003				2002
Weighted average number of shares outstanding for basic and diluted					42,800				42,730				42,650
Loss before cumulative effect of change in accounting				$	(27,990	)		$	(75,330	)		$	(28,130	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				(36,630	)
Net loss					(27,990	)			(75,330	)			(64,760	)
Less: Preferred stock dividends					—				9,260				9,120
Loss used for basic and diluted earnings per share computation				$	(27,990	)		$	(84,590	)		$	(73,880	)
Basic and diluted loss per share:
Before cumulative effect of change in accounting principle less preferred stock				$	(0.65	)		$	(1.98	)		$	(0.87	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				—				(0.86	)
Net loss attributable to common stock				$	(0.65	)		$	(1.98	)		$	(1.73	)

Diluted earnings per share reflect the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. Excluded from the calculation of diluted earnings per share are stock options representing 2.69 million and 2.66 million of common shares as they are anti-dilutive at January 2, 2005 and December 28, 2003, respectively.

Contingently issuable shares, representing approximately 0.05 million, 0.9 million and 1.7 million restricted common shares, have an anti-dilutive effect on earnings per share for the years ended January 2, 2005, December 28, 2003 and December 29, 2002, respectively.

23.    Income Taxes

				(In thousands)
				2004				2003				2002
Income (loss) before income taxes:
Domestic				$	(114,050	)		$	(122,690	)		$	(104,740	)
Foreign					49,190				38,700				35,650
				$	(64,860	)		$	(83,990	)		$	(69,090	)
Provision for income taxes:
Currently payable:
Federal				$	(5,910	)		$	—			$	(44,830	)
Foreign					4,900				15,130				8,820
State and local					1,870				410				(1,060	)
					860				15,540				(37,070	)
Deferred:
Federal					(30,380	)			(24,230	)			(11,110	)
Foreign					(1,330	)			970				7,180
State and local					(6,020	)			(940	)			40
					(37,730	)			(24,200	)			(3,890	)
Income taxes				$	(36,870	)		$	(8,660	)		$	(40,960	)

80

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of deferred taxes at January 2, 2005 and December 28, 2003 are as follows:

				(In thousands)
				2004				2003
Deferred tax assets:
Inventories				$	570			$	—
Accrued liabilities and other long-term liabilities					60,850				65,370
Net operating losses					72,970				43,950
Investment in subsidiary					2,980				6,700
					137,370				116,020
Valuation allowance					(12,220	)			(11,260	)
					125,150				104,760
Deferred tax liabilities:
Property and equipment					143,330				153,060
Intangible assets					48,080				51,880
Other, principally investments					9,730				10,650
					201,140				215,590
Net deferred tax liability				$	75,990			$	110,830

The net deferred tax liability resides in the following components of the balance sheet:

				(In thousands)
				2004				2003
Assets:
Deferred and refundable income taxes				$	12,920			$	9,110
Intangible and other assets					—				5,390
					12,920				14,500
Liabilities:
Accrued liabilities					—				3,810
Deferred income taxes					88,910				121,520
					88,910				125,330
Total net deferred tax liability				$	75,990			$	110,830

The following is a reconciliation of tax computed at the U.S. federal statutory rate to the provision for income taxes allocated to income before income taxes:

				(In thousands)
				2004				2003				2002
U.S. federal statutory rate					35	%			35	%			35	%
Tax at U.S. federal statutory rate				$	(22,710	)		$	(29,400	)		$	(24,180	)
State and local taxes, net of federal tax benefit					(1,070	)			(340	)			(1,220	)
Change in valuation allowance for state income taxes					(2,700	)			—				—
Higher (lower) effective foreign tax rate					(4,400	)			2,560				2,600
Foreign dividends					510				5,990				1,070
Refunds received in excess of prior recorded amounts					(7,070	)			—				—
Preferred stock dividends					6,590				—				—
Change in accrual for tax contingencies					(6,250	)			—				—
Valuation allowance on equity earnings					—				1,980				—
Undistributed foreign earnings					750				10,200				—
Change in valuation allowance as a result of utilization of capital losses					—				—				(20,000	)
Other, net					(520	)			350				770
Income taxes				$	(36,870	)		$	(8,660	)		$	(40,960	)

81

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of January 2, 2005, the Company had unused U.S. net operating loss ("NOL") carryforwards of approximately $173 million. $0.4 million of these losses will expire in 2020; $25 million will expire in 2021; $1.2 million will expire in 2022; $54 million will expire in 2023; and $92 million will expire in 2024. The Company has also recognized a deferred tax asset for unused state NOL carryforwards in the current year totaling $2.7 million. These NOL carryforwards expire in various years beginning in 2024.

A provision has been made for U.S. or additional foreign withholding taxes on approximately $11 million and $10 million of the undistributed earnings of one foreign subsidiary at January 2, 2005 and December 28, 2003, respectively. A provision for such taxes has not been made on approximately $368 million and $285 million of the undistributed earnings of the Company's other foreign subsidiaries for the years ended January 2, 2005 and December 28, 2003, respectively, as the Company intends to permanently reinvest the earnings of these entities. Generally, such earnings become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability on such undistributed earnings.

Tax expense for the year ended December 29, 2002 is shown before the cumulative effect of change in recognition and measurement of goodwill impairment of $36.6, for which no tax benefit is available.

In June 2002, the Company completed its analysis of the impact related to the U.S. Department of Treasury's recently issued regulations that replaced the loss disallowance rules applicable to the sale of stock of a subsidiary member of a consolidated tax group. These regulations permit the Company to utilize a previously disallowed capital loss that primarily resulted from the sale of a subsidiary in 2000. In the year ended December 29, 2002, the Company filed an amended tax return to claim a refund relating to the previously disallowed loss and recorded a tax benefit of $20 million relating to the refund claim. In July 2004, the Company received a $27 million refund relating to the claim. The difference in the amount of benefit recorded in 2002 and the refund received in 2004, $7 million, has been recorded as a benefit in the current tax provision.

FASB Statement No. 109, Income Taxes, requires recognition of a valuation allowance when it is "more likely than not that some portion or all of the deferred tax assets will not be realized." The ultimate realization of deferred tax assets depends on Metaldyne's ability to generate sufficient taxable income in the future. The valuation allowance principally relates to the uncertainty of future utilization of certain foreign and state net operating losses, and the excess of the Company's tax cost basis over net book value of TriMas stock, where it is not anticipated that the Company will generate enough capital gain income to offset any capital loss that may occur upon the sale of its shares in future years. The net increase (decrease) in the valuation allowance for the years ending January 2, 2005 and December 28, 2003 was $1 million and ($4.3) million, respectively.

Included in the state deferred tax expense for January 2, 2005 is a benefit of $2.7 million that is attributable to a reduction in a valuation allowance previously established against deferred tax assets for certain net operating loss carryforwards that the Company has determined is no longer warranted.

24.    Employee Benefit Plans

Substantially all employees participate in noncontributory profit-sharing and/or contributory defined contribution plans, to which payments are approved annually by the Board of Directors. Aggregate charges to income under defined contribution plans were $8.8 million in 2004, $9.3 million in 2003 and $4 million in 2002. Anticipated 2005 contributions to the defined contribution plans will be approximately $10.6 million.

As of January 1, 2003, the Company replaced its existing combination of defined benefit plans and defined contribution plans for non-union employees with an age-weighted profit-sharing plan and a 401(k) plan. Defined benefit plan benefits no longer accrue after 2002 for these employees. This change affected approximately 1,200 employees. The profit-sharing component of the new plan is calculated using allocation rates that are integrated with Social Security and that increase with age. As a result of the

82

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

disposition of TriMas on June 6, 2002, the Company is not responsible for TriMas' net periodic pension cost subsequent to this date. However, the Company must continue to record TriMas' portion of the net liability recognized on the Company's consolidated balance sheet.

The Company also provides other postretirement medical and life insurance benefit plans, none of which are funded, for certain of its active and retired employees. The health care plans are contributory with participants' contributions adjusted annually. As a result of the disposition of TriMas on June 6, 2002, the Company is not responsible for TriMas' net periodic postretirement benefit cost, benefit obligations and net liability subsequent to this date.

The Company uses a September 30 measurement date for all of its plans. The straight-line method is used to amortize prior service amounts and unrecognized net gains and losses for all pension and postretirement benefit plans. The below includes all of the Company's domestic and foreign pension and other postretirement benefit plans.

Obligations and funded status at January 2, 2005 and December 28, 2003:

				(In thousands)
				Pension Benefits								Other Benefits
				2004				2003				2004				2003
Change in Benefit Obligation
Benefit obligation at beginning of year				$	289,120			$	260,750			$	53,340			$	45,410
Service cost					3,070				3,220				1,330				1,020
Interest cost					17,320				17,100				2,970				3,010
Plan participants' contributions					190				240				450				—
Amendments					230				1,890				—				—
Actuarial loss					6,930				17,820				1,440				7,040
Benefits paid					(13,950	)			(14,060	)			(3,290	)			(3,140	)
Change in foreign currency					2,740				4,870				—				—
Change due to amendment/settlement/spin-off					—				—				(1,980	)			—
Change due to curtailment					(1,470	)			(2,710	)			—				—
Benefit obligation at end of year					304,180				289,120				54,260				53,340
Change in Plan Assets
Fair value of plan assets at beginning of year					162,720				148,660				—				—
Actual return on plan assets					13,640				9,790				—				—
Employer contribution					18,930				16,380				2,840				3,140
Plan participants' contributions					190				—				450				—
Benefits paid					(13,950	)			(14,060	)			(3,290	)			(3,140	)
Expenses/other					1,410				1,950				—				—
Fair value of plan assets at end of year					182,940				162,720				—				—
Net Amount Recognized
Funded status					(121,240	)			(126,400	)			(54,260	)			(53,340	)
Unrecognized net actuarial loss					101,390				92,510				14,810				13,840
Unrecognized prior service cost (benefit)					2,160				2,060				(2,580	)			(1,370	)
Net amount recognized				$	(17,690	)		$	(31,830	)		$	(42,030	)		$	(40,870	)
Amounts Recognized in the Statement of Financial Position
Accrued benefit cost				$	(115,980	)		$	(119,540	)		$	(42,030	)		$	(40,870	)
Intangible assets					2,160				2,060				—				—
Accumulated other comprehensive income					96,130				85,650				—				—
Net amount recognized				$	(17,690	)		$	(31,830	)		$	(42,030	)		$	(40,870	)
Projected benefit obligation					304,180				289,120				N/A				N/A
Accumulated benefit obligation					298,850				280,810				N/A				N/A
Fair value of plan assets					182,940				162,720				N/A				N/A

83

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The increase in accumulated other comprehensive income to $96.1 million ($60.6 million net of tax) at January 2, 2005 primarily reflects the excess of the accumulated benefit obligation over the fair value of the plan assets.

The Company expects to make contributions of approximately $24.0 million to the defined benefit pension plans for 2005.

				(In thousands)
				Pension Benefits												Other Benefits
				2004				2003				2002				2004				2003				2002
Components of Net Periodic Benefit Cost
Service cost				$	3,070			$	3,210			$	6,410			$	1,330			$	1,020			$	1,040
Interest cost					17,320				17,100				18,340				2,970				3,010				3,010
Expected return on plan assets					(17,220	)			(16,570	)			(15,710	)			—				—				—
Amortization of prior service cost					140				110				40				(290	)			(120	)			—
Recognized (gain) loss due to curtailments/settlements					(1,470	)			(2,450	)			1,280				(480	)			—				—
Amortization of net (gain) loss					2,370				700				30				470				280				(20	)
Net periodic benefit cost				$	4,210			$	2,100			$	10,390			$	4,000			$	4,190			$	4,030
Additional Information
Increase in minimum liability included in other comprehensive income (before tax)				$	10,480			$	25,530			$	48,520				N/A				N/A				N/A
Assumptions
Weighted-average assumptions used to determine benefit obligations at January 2, 2005, December 28, 2003 and December 29, 2002:
Discount rate					5.99	%			6.11	%			6.73	%			6.00	%			6.13	%			6.75	%
Rate of compensation increase					3.62	%			3.59	%			4.01	%			N/A				N/A				N/A
Weighted-average assumptions used to determine net periodic benefit cost for years ended January 2, 2005, December 28, 2003 and December 29, 2002:
Discount rate					6.11	%			6.73	%			7.51	%			6.13	%			6.75	%			7.625	%
Expected long-term return on plan assets					8.96	%			8.96	%			8.97	%			N/A				N/A				N/A
Rate of compensation increase					3.59	%			4.01	%			4.03	%			N/A				N/A				N/A
Assumed health care cost trend rates at January 2, 2005, December 28, 2003 and December 29, 2002:
Health care cost trend rate assumed for next year					N/A				N/A				N/A				9.50	%			10.00	%			10.50	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)					N/A				N/A				N/A				5.00	%			5.00	%			5.00	%
Year that the rate reaches the ultimate trend rate					N/A				N/A				N/A				2013				2013				2013

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

84

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

				(In thousands)
				1-Percentage- Point Increase				1-Percentage- Point Decrease
Effect on total of service and interest cost				$	310			$	(250	)
Effect on postretirement benefit obligation					3,770				(3,010	)

Plan Assets

The Company's pension plans' and other postretirement benefit plans' weighted-average asset allocations at January 2, 2005 and December 28, 2003, by asset category, are as follows:

				Pension Benefits
				Plan Assets At
				January 2, 2005				December 28, 2003
Asset Category
Equity securities					65	%			56	%
Debt securities					33	%			36	%
Other (Cash)					2	%			8	%
Total					100	%			100	%

Cash Flows

The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

				Pension Benefits January 2, 2005
2005				$	12,010
2006				$	12,240
2007				$	12,880
2008				$	13,600
2009				$	14,340
2010 - 2014				$	85,890

Investment Policy and Strategy

The policy, established by the Retirement Plan Administrative Committee, is to provide for growth of capital with a moderate level of volatility by investing assets per the target allocations stated above. The asset allocation and the investment policy will be reviewed on a semi-annual basis, to determine if the policy should be changed.

Determination of Expected Long-Term Rate of Return

The expected long-term rate of return for the plan's total assets is based on the expected return of each of the above categories, weighted based on the target allocation for each class. Equity securities are expected to return 10% to 11% over the long-term, while debt securities are expected to return between 4% and 7%. The Retirement Plan Administrative Committee expects that the plans' asset manager will provide a modest (0.5% to 1.0% per annum) premium to the respective market benchmark indices.

Medicare Prescription Drug, Improvement and Modernization Act

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act was signed into law. This law provides for a federal subsidy to sponsors of retiree health care benefit plans that

85

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

provide a benefit that is at least actuarially equivalent to the benefit established by the law. The Company provides retiree drug benefits that exceed the value of the benefits that will be provided by Medicare Part D, and the Company's eligible retirees generally pay a premium for this benefit that is less than the Part D premium. Therefore, the Company has concluded that these benefits are at least actuarially equivalent to the Part D program so that Metaldyne will be eligible for the basic Medicare Part D subsidy.

In the second quarter of 2004, a Financial Accounting Standards Board (FASB) Staff Position (FSP FAS 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003") was issued providing guidance on the accounting for the effects of the Act for employers that sponsor postretirement health care plans that provide prescription drug benefits. The FSP is effective for the first interim or annual period beginning after June 15, 2004. The Company estimates the federal subsidy included in the law will ultimately result in an approximate $7.0 million reduction in Metaldyne's postretirement benefit obligation. For 2004, the Company recognized a net reduction in postretirement expense of $0.9 million as a result of the anticipated subsidiary.

Postretirement Medical and Life Insurance Benefit Plans

In December 2004, the Company announced that it will discontinue retiree medical and life insurance coverage to its salaried and nonunion retirees and their beneficiaries effective January 1, 2006. This event has no impact on the Company's 2004 annual results since the announcement occurred subsequent to the September 30, 2004 measurement date for postretirement benefits. The Company will record an estimated curtailment gain of $2.5 million in the first quarter of 2005 pursuant to the announcement. The Company expects to reduce its 2005 SFAS No. 106 expense by $16.8 million and $1.4 million as a result of the curtailment and of FSP FAS 106-2, respectively.

25.    Fair Value of Financial Instruments

In accordance with Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments," the following methods were used to estimate the fair value of each class of financial instruments:

Cash and Cash Equivalents

The carrying amount reported in the balance sheet for cash and cash equivalents approximates fair value.

Long-Term Debt

The carrying amount of bank debt and certain other long-term debt instruments approximates fair value as the floating rates applicable to this debt reflect changes in overall market interest rates.

Derivatives

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

All of the Company's interest rate protection agreements matured in February 2004 and, as a result of their maturity, a cumulative pre-tax non-cash gain of $6.6 million was recorded and is reflected as a non-cash gain on maturity of interest rate arrangements in the Company's consolidated statement of operations for the year ended January 2, 2005. See also Note 14, Derivative Financial Instruments.

86

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The carrying amounts and fair values of the Company's financial instruments at January 2, 2005 and December 28, 2003 are as follows:

				(In thousands)
				2004								2003
				Carrying Amount				Fair Value				Carrying Amount				Fair Value
Cash and cash investments				$	—			$	—			$	13,820			$	13,820
Receivables				$	182,410			$	182,410			$	175,020			$	175,020
Interest rate arrangements				$	—			$	—			$	(4,540	)		$	(4,540	)
Long-term debt:
Bank debt				$	413,730			$	413,730			$	351,080			$	351,080
11% senior subordinated notes, due 2012				$	250,000			$	210,000			$	250,000			$	230,000
10% senior notes, due 2013				$	150,000			$	144,750			$	150,000			$	150,000
10% senior subordinated notes, due 2014				$	31,750			$	27,180			$	—			$	—
Other long-term debt				$	14,540			$	14,540			$	15,850			$	15,850

26.    Interim and Other Supplemental Financial Data (Unaudited)

				(In thousands except per share amounts)
				For the Quarters Ended
				January 2nd				October 3rd				June 27th				March 28th
2004:
Net sales				$	499,550			$	501,680			$	521,890			$	481,140
Gross profit				$	34,230			$	34,180			$	52,390			$	52,210
Net loss				$	(2,200	)		$	(17,370	)		$	(3,170	)		$	(5,250	)
Per common share:
Basic and diluted				$	(0.05	)		$	(0.41	)		$	(0.07	)		$	(0.12	)

				(In thousands except per share amounts)
				For the Quarters Ended
				December 28th				September 28th				June 29th				March 30th
2003:
Net sales				$	389,060			$	346,680			$	390,540			$	381,920
Gross profit				$	31,410			$	33,420			$	49,830			$	41,040
Net income (loss)				$	(54,990	)		$	(10,340	)		$	1,060			$	(11,060	)
Per common share:
Basic and diluted				$	(1.35	)		$	(0.29	)		$	(0.03	)		$	(0.31	)

The 2004 results include the adoption of SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." As a result, the 2004 net loss and basic and diluted loss per share include $19.9 million of preferred stock dividends (including accretion of $1.1 million in 2004). Additionally, fourth quarter results include a $8.0 million gain on the sale of Saturn and TriMas common stock.

In the fourth quarter of 2003, the Company incurred several significant charges, including a $4.9 million asset impairment, $15 million fixed asset disposal loss, $6.1 million restructuring charge and $20.7 million equity loss of affiliates. See Note 6, Equity Investments and Receivables in Affiliates, and Note 17, Asset Impairments and Restructuring Related Integration Actions.

27.    Commitments and Contingencies

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

87

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

There are no material pending legal proceedings, other than ordinary routine litigation incidental to the Company's business, to which it is aware that would have a material adverse effect on the Company's financial position or results of operations.

28.    Related Party Transactions

In November 2000, the Company was acquired by an investor group led by Heartland and Credit Suisse First Boston ("CSFB") in a recapitalization transaction. Heartland is a private equity fund established to "buy, build and grow" industrial companies in sectors with attractive consolidation opportunities. In addition to TriMas (see Note 6, Equity Investments and Receivables in Affiliates), Heartland has equity interests in other industrial companies. The recapitalization and Heartland's investment have allowed the Company to continue to aggressively pursue internal growth opportunities and strategic acquisitions, and to increase the scale and future profitability of the Company. At January 2, 2005, Heartland and CSFB owned approximately 45% and 23% of the Company's common stock, respectively.

The Company maintains a monitoring agreement with Heartland for an annual fee of $4 million plus additional fees for financings and acquisitions under certain circumstances. The Heartland monitoring agreement is based on a percentage of assets calculation and Heartland has the option of taking the greater of the calculated fee (which would have totaled $5.3 million for 2004) or $4 million. Total monitoring fees paid to Heartland were $4 million for each of the years ended January 2, 2005, December 28, 2003 and December 29, 2002. Additionally, the Company recorded $0.2 million in 2004 and $0.7 million in both 2003 and 2002 for expense reimbursements to Heartland in the ordinary course of business.

Heartland is also entitled to a 1% transaction fee in exchange for negotiating, contracting and executing certain transactions on behalf of Metaldyne, including transactions for sale-leaseback arrangements and other financings. These fees totaled approximately $1.0 and $1.9 million for the years ended January 2, 2005 and December 28, 2003, respectively. Similar fees through 2002 totaled approximately $1.9 million. Total fee and expense reimbursements paid in 2004 and 2003 were approximately $0.2 million and $2 million, respectively, and amounts not remitted to Heartland total approximately $2.8 million and $1.8 million as of January 2, 2005 and December 28, 2003, respectively. These amounts are recorded as accounts payable in the Company's consolidated balance sheet as of the year ended January 2, 2005.

On December 31, 2003, Heartland purchased all of the outstanding shares of Series B preferred stock from the Company's former GMTI shareholders. See Note 13, Redeemable Preferred Stock.

Effective January 23, 2001, the Company changed its name to Metaldyne Corporation from MascoTech, Inc. The Company had a corporate service agreement through 2002 with Masco Corporation ("Masco"), which at January 2, 2005 owned approximately 6% of the Company's common stock. Under the terms of the agreement, the Company paid fees to Masco for various staff support and administrative services, research and development and facilities. Such fees aggregated zero in 2004 and 2003 and $0.5 million in 2002. Total fee and expense reimbursements not yet remitted to Masco total $0.9 million and $1.0 million as of January 2, 2005 and December 28, 2003, respectively, and are recorded as accounts payable in the Company's consolidated balance sheet as of the year ended January 2, 2005.

On June 6, 2002, the Company sold 66% of its former TriMas subsidiary to Heartland and other investors. The Company's current ownership percentage in TriMas is approximately 24%. The Company has a corporate services agreement with TriMas, which requires the Company to provide corporate staff support and administrative services to TriMas subsequent to the divestiture of TriMas. Under the terms of the agreement, the Company receives fees from TriMas, which aggregated approximately $0.4 million, $2.5 million and $0.3 million in 2004, 2003 and 2002, respectively. TriMas also reimburses Metaldyne for expense reimbursements in the ordinary course of business. The Company has recorded $7.1 million due from TriMas, consisting of tax net operating losses created prior to the disposition of TriMas, pension obligations and other expense reimbursements in the ordinary course of business, of which $2.8 million

88

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

is recorded as receivables from TriMas and $4.3 million is recorded as equity investments and receivables in affiliates in the Company's consolidated balance sheet as of January 2, 2005.

On November 12, 2004, the Company sold approximately 924,000 shares of its TriMas stock to Masco for $23 per shares, or a total of $21.3 million. A gain on the sale of shares totaling $2.9 million was recognized and is included in equity (gain) loss from affiliates, net on the Company's consolidated statement of operations as of January 2, 2005. See Note 6, Equity Investments and Receivables in Affiliates.

29.    Subsequent Events

In January 2005, the Company reorganized to streamline its operating efficiency and cost structure. The Company's operations were consolidated into two segments: Chassis segment and the Powertrain segment. The Chassis segment consists of the former Chassis operations plus a portion of the former Driveline operations, while the Powertrain segment consists of the former Engine operations combined with the remainder of the former Driveline operations. As this change became effective in fiscal 2005, the Company's Form 10-Q for the quarter ending April 3, 2005 will report operating results in these two segments along with restated results for the year ended January 2, 2005.

On February 4, 2005, the Company entered into a sale-leaseback transaction for machinery and equipment with a third party lessor. The Company received $6.5 million cash as part of this transaction.

Metaldyne entered into a Commitment Letter with General Electric Capital Corporation ("GECC") dated as of March 31, 2005 related to its existing accounts receivable securitization facility (the, "Existing Agreement"). The Commitment Letter provides for (i) an initial amendment to the Existing Agreement (the Existing Agreement as so amended, the "Amended Agreement"), (ii) an "Extension Facility" that will further amend the Amended Agreement and (iii) a "New Facility" that is expected to eventually replace the Extension Facility.

The Amended Agreement is expected to (a) change the maturity date of the facility to January 1, 2007, (b) install GECC as the new Administrative Agent, (c) improve customer concentration limits, (d) increase program availability and (e) adjust certain default triggers (clauses (c), (d) and (e) together the "Operative Amendments").

The Extension Facility is expected to (i) improve advance rates relative to the Amended Agreement, (ii) change the margins applicable to advances based on LIBOR to 1.75% for the first 90 days, 2.00% for the next 90 days, and 2.25% thereafter, and (iii) change the maximum financing from $150 million to $175 million. The Extension Facility will also address various administrative and technical matters.

The New Facility is expected to (i) increase the facility size to $225 million, (ii) improve advance rates relative to the Extension Facility, and (iii) provide a term of the agreement for up to five years.

If the Company has not entered into an intercreditor agreement with its lending agent within 60 days subsequent to the date of the Amended Agreement, then the Operative Amendments will cease to be effective until such intercreditor agreement is entered into. Further, such intercreditor agreement is a condition precedent to the Extension Facility and the New Facility. GECC's commitment under the letter agreement to enter into the Amended Agreement expires on May 15, 2005. GECC's commitment to provide the Extension Facility expires on January 1, 2007. GECC's commitment to provide the New Facility expires on August 15, 2005. There can be no assurance that Metaldyne will reach a definitive agreement with GECC on these terms.

The Commitment Letter and related term sheet are filed herewith as Exhibit 10.3.1. Additionally, the Company has financed several lease transactions with GECC, and GECC beneficially owns approximately 1.4% of the Company's common stock.

89

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The following condensed consolidating financial information presents:

(1)	Condensed consolidating financial statements as of January 2, 2005 and December 28, 2003, and for the years ended January 2, 2005, December 28, 2003 and December 31, 2002 of (a) Metaldyne Corporation, the parent and issuer, (b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries and (d) the Company on a consolidated basis, and

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

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

Guarantor/Non-Guarantor
Condensed Consolidating Balance Sheet
January 2, 2005

				(In thousands)
				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Assets
Current assets:
Cash and cash equivalents				$	—			$	—			$	—			$	—			$	—
Total receivables, net					—				128,230				53,380				—				181,610
Inventories					—				84,570				42,450				—				127,020
Deferred and refundable income taxes					—				14,500				3,970				—				18,470
Prepaid expenses and other assets					—				28,830				7,820				—				36,650
Total current assets					—				256,130				107,620				—				363,750
Equity investments and receivables in affiliates					107,040				—				—				—				107,040
Property and equipment, net					—				580,780				275,470				—				856,250
Excess of cost over net assets of acquired companies					—				472,050				154,190				—				626,240
Investment in subsidiaries					584,110				232,280				—				(816,390	)			—
Intangible and other assets					—				222,380				19,090				—				241,470
Total assets				$	691,150			$	1,763,620			$	556,370			$	(816,390	)		$	2,194,750
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable				$	—			$	199,710			$	86,880			$	—			$	286,590
Accrued liabilities					—				92,000				25,050				—				117,050
Current maturities, long-term debt					—				3,630				8,620				—				12,250
Total current liabilities					—				295,340				120,550				—				415,890
Long-term debt					427,180				426,320				1,950				—				855,450
Deferred income taxes					—				61,940				26,970				—				88,910
Minority interest					—				—				650				—				650
Other long-term liabilities					—				135,310				7,390				—				142,700
Redeemable preferred stock					149,190				—				—				—				149,190
Intercompany accounts, net					(427,180	)			256,340				170,840				—				—
Total liabilities					149,190				1,175,250				328,350				—				1,652,790
Shareholders' equity:
Preferred stock					—				—				—				—				—
Common stock					42,830				—				—				—				42,830
Paid-in capital					698,870				—				—				—				698,870
Accumulated deficit					(262,740	)			—				—				—				(262,740	)
Accumulated other comprehensive income					63,000				—				—				—				63,000
Investment by Parent/Guarantor					—				588,370				228,020				(816,390	)			—
Total shareholders' equity					541,960				588,370				228,020				(816,390	)			541,960
Total liabilities and shareholders' equity				$	691,150			$	1,763,620			$	556,370			$	(816,390	)		$	2,194,750

90

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Guarantor/Non-Guarantor
Condensed Consolidating Balance Sheet
December 28, 2003

				(In thousands)
				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Assets
Current assets:
Cash and cash equivalents				$	—			$	10,750			$	3,070			$	—			$	13,820
Total receivables, net					—				144,980				29,180				—				174,160
Inventories					—				54,080				29,600				—				83,680
Deferred and refundable income taxes					—				7,900				1,210				—				9,110
Prepaid expenses and other assets					—				27,880				8,400				—				36,280
Total current assets					—				245,590				71,460				—				317,050
Equity investments and receivables in affiliates					155,790				—				—				—				155,790
Property and equipment, net					—				478,760				228,690				—				707,450
Excess of cost over net assets of acquired companies					—				441,920				142,470				—				584,390
Investment in subsidiaries					464,100				236,550				—				(700,650	)			—
Intangible and other assets					—				225,400				21,780				—				247,180
Total assets				$	619,890			$	1,628,220			$	464,400			$	(700,650	)		$	2,011,860
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable				$	—			$	128,960			$	72,280			$	—			$	201,240
Accrued liabilities					—				96,040				40,800				—				136,840
Current maturities, long-term debt					—				4,820				6,060				—				10,880
Total current liabilities					—				229,820				119,140				—				348,960
Long-term debt					400,000				360,740				6,190				—				766,930
Deferred income taxes					—				95,530				25,990				—				121,520
Minority interest					—				—				800				—				800
Other long-term liabilities					—				148,620				5,140				—				153,760
Intercompany accounts, net					(400,000	)			322,450				77,550				—				—
Total liabilities					—				1,157,160				234,810				—				1,391,970
Redeemable preferred stock					73,980				—				—				—				73,980
Shareholders' equity:
Preferred stock					—				—				—				—				—
Common stock					42,730				—				—				—				42,730
Paid-in capital					692,400				—				—				—				692,400
Accumulated deficit					(234,750	)			—				—				—				(234,750	)
Accumulated other comprehensive income					45,530				—				—				—				45,530
Investment by Parent/Guarantor					—				471,060				229,590				(700,650	)			—
Total shareholders' equity					545,910				471,060				229,590				(700,650	)			545,910
Total liabilities, redeemable stock and shareholders' equity				$	619,890			$	1,628,220			$	464,400			$	(700,650	)		$	2,011,860

91

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Guarantor/Non-Guarantor
Condensed Consolidating Statement of Operations
Year Ended January 2, 2005

				(In thousands)
				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Net sales				$	—			$	1,580,100			$	424,160			$	—			$	2,004,260
Cost of sales					—				(1,491,350	)			(339,900	)			—				(1,831,250	)
Gross profit					—				88,750				84,260				—				173,010
Selling, general and administrative expenses					—				(110,690	)			(22,560	)			—				(133,250	)
Restructuring charges					—				(1,370	)			(1,380	)			—				(2,750	)
Loss on disposition of manufacturing facilities					—				(7,600	)			—				—				(7,600	)
Operating profit (loss)					—				(30,910	)			60,320				—				29,410
Other expense, net:
Interest expense					—				(79,280	)			(2,860	)			—				(82,140	)
Preferred stock dividends and accretion					(19,900	)			—				—				—				(19,900	)
Non-cash gain on maturity of interest rate arrangements					—				6,570				—				—				6,570
Equity gain (loss) from affiliates, net					1,450				—				—				—				1,450
Gain on sale of equity investments					8,020				—				—				—				8,020
Other, net					—				(6,340	)			(1,930	)			—				(8,270	)
Other expense, net					(10,430	)			(79,050	)			(4,790	)			—				(94,270	)
Income (loss) before income taxes					(10,430	)			(109,960	)			55,530				—				(64,860	)
Income tax expense (benefit)					—				(40,640	)			3,770				—				(36,870	)
Equity in net income of subsidiaries					(17,560	)			51,760				—				(34,200	)			—
Earnings (loss) attributable to common stock				$	(27,990	)		$	(17,560	)		$	51,760			$	(34,200	)		$	(27,990	)

92

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Guarantor/Non-Guarantor
Condensed Consolidating Statement of Operations
Year Ended December 28, 2003

				(In thousands)
				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Net sales				$	—			$	1,154,470			$	353,730			$	—			$	1,508,200
Cost of sales					—				(1,060,220	)			(292,450	)			—				(1,352,670	)
Gross profit					—				94,250				61,280				—				155,530
Selling, general and administrative expenses					—				(99,360	)			(17,870	)			—				(117,230	)
Restructuring charges					—				(11,550	)			(1,580	)			—				(13,130	)
Asset impairment					—				(4,870	)			—				—				(4,870	)
Operating profit (loss)					—				(21,530	)			41,830				—				20,300
Other expense, net:
Interest expense					—				(69,640	)			(5,870	)			—				(75,510	)
Equity gain (loss) from affiliates, net					(20,700	)			—				—				—				(20,700	)
Other, net					—				(11,690	)			3,610				—				(8,080	)
Other expense, net					(20,700	)			(81,330	)			(2,260	)			—				(104,290	)
Income (loss) before income taxes					(20,700	)			(102,860	)			39,570				—				(83,990	)
Income tax expense (benefit)					—				(27,440	)			18,780				—				(8,660	)
Equity in net income of subsidiaries					(54,630	)			20,790				—				33,840				—
Net income (loss)					(75,330	)			(54,630	)			20,790				33,840				(75,330	)
Preferred stock dividends					9,260				—				—				—				9,260
Earnings (loss) attributable to common stock				$	(84,590	)		$	(54,630	)		$	20,790			$	33,840			$	(84,590	)

93

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Guarantor/Non-Guarantor
Condensed Consolidating Statement of Operations
Year Ended December 29, 2002

				(In thousands)
				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Net sales				$	—			$	1,165,130			$	627,070			$	—			$	1,792,200
Cost of sales					—				(1,029,500	)			(469,060	)			—				(1,498,560	)
Gross profit					—				135,630				158,010				—				293,640
Selling, general and administrative expenses					—				(106,070	)			(75,390	)			—				(181,460	)
Restructuring charges					—				(3,470	)			—				—				(3,470	)
Operating profit					—				26,090				82,620				—				108,710
Other expense, net:
Interest expense					—				(87,280	)			(3,720	)			—				(91,000	)
Loss on repurchase of debentures and early retirement of term loans					—				(68,860	)			—				—				(68,860	)
Loss on interest rate arrangements upon early retirement of term loans					—				(7,550	)			—				—				(7,550	)
Equity gain (loss) from affiliates, net					(1,410	)			—												(1,410	)
Other, net					—				(10,670	)			1,690				—				(8,980	)
Other expense, net					(1,410	)			(174,360	)			(2,030	)			—				(177,800	)
Income (loss) before income taxes					(1,410	)			(148,270	)			80,590				—				(69,090	)
Income tax expense (benefit)					—				(56,970	)			16,010				—				(40,960	)
Equity in net income of subsidiaries					(63,350	)			64,580				—				(1,230	)			—
Net income (loss) before cumulative effect of change in accounting principle					(64,760	)			(26,720	)			64,580				(1,230	)			(28,130	)
Cumulative effect of change in recognition and measurement of goodwill impairment					—				(36,630	)			—				—				(36,630	)
Net income (loss)					(64,760	)			(63,350	)			64,580				(1,230	)			(64,760	)
Preferred stock dividends					9,120				—				—				—				9,120
Earnings (loss) attributable to common stock				$	(73,880	)		$	(63,350	)		$	64,580			$	(1,230	)		$	(73,880	)

94

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Guarantor/Non-Guarantor
Condensed Consolidating Statement of Cash Flows
Year Ended January 2, 2005

				(In thousands)
				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Cash flows from operating activities:
Net cash provided by operating activities				$	—			$	37,250			$	42,130			$	—			$	79,380
Cash flows from investing activities:
Capital expenditures					—				(112,160	)			(40,280	)			—				(152,440	)
Acquisition of business, net of cash received					—				(203,870	)			—				—				(203,870	)
Proceeds from sale/leaseback of fixed assets					—				91,520				—				—				91,520
Disposition of manufacturing facilities					—				(500	)			—				—				(500	)
Proceeds from sale of equity investments					33,830				—				—				—				33,830
Proceeds on sale of joint venture					—				1,260				—				—				1,260
Net cash provided by (used for) investing activities					33,830				(223,750	)			(40,280	)			—				(230,200	)
Cash flows from financing activities:
Principal payments of term loan facilities					—				(1,320	)			—				—				(1,320	)
Proceeds of revolving credit facility					—				279,450				—				—				279,450
Principal payments of revolving credit facility					—				(215,910	)			—				—				(215,910	)
Proceeds of senior subordinated notes, due 2014					26,920				—				—				—				26,920
Proceeds of other debt					—				—				3,740				—				3,740
Principal payments of other debt					—				(4,530	)			(5,310	)			—				(9,840	)
Capitalization of debt financing fees					—				(1,380	)			—				—				(1,380	)
Issuance of Series A-1 preferred stock					55,340				—				—				—				55,340
Net cash provided by (used for) financing activities					82,260				56,310				(1,570	)			—				137,000
Change in intercompany accounts					(116,090	)			119,440				(3,350	)			—				—
Net increase (decrease) in cash					—				(10,750	)			(3,070	)			—				(13,820	)
Cash and cash equivalents, beginning of period					—				10,750				3,070				—				13,820
Cash and cash equivalents, end of period				$	—			$	—			$	—			$	—			$	—

95

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Guarantor/Non-Guarantor
Condensed Consolidating Statement of Cash Flows
Year Ended December 28, 2003

				(In thousands)
				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Cash flows from operating activities:
Net cash provided by (used for) operating activities				$	—			$	(61,410	)		$	160,650			$	—			$	99,240
Cash flows from investing activities:
Capital expenditures					—				(104,580	)			(26,140	)			—				(130,720	)
Disposition of businesses to a related party					—				—				22,570				—				22,570
Acquisition of business, net of cash received					—				(7,650	)			—				—				(7,650	)
Proceeds from sale/leaseback of fixed assets					—				16,970				—				—				16,970
Proceeds from sale of TriMas shares					20,000				—				—				—				20,000
Investment in joint venture					—				(20,000	)			—				—				(20,000	)
Net cash provided by (used for) investing activities					20,000				(115,260	)			(3,570	)			—				(98,830	)
Cash flows from financing activities:
Principal payments of term loan facilities					—				(47,600	)			—				—				(47,600	)
Proceeds of revolving credit facility					—				180,000				—				—				180,000
Principal payments of revolving credit facility					—				(180,000	)			—				—				(180,000	)
Proceeds of senior notes, due 2013					150,000				—				—				—				150,000
Principal payments of convertible subordinated debentures, due 2003					(98,530	)			—				—				—				(98,530	)
Proceeds of other debt					—				—				1,940				—				1,940
Principal payments of other debt					—				(4,080	)			(5,100	)			—				(9,180	)
Capitalization of debt financing fees									(2,350	)			—				—				(2,350	)
Net cash provided by (used for) financing activities					51,470				(54,030	)			(3,160	)			—				(5,720	)
Change in intercompany accounts					(71,470	)			226,840				(155,370	)			—				—
Net increase (decrease) in cash					—				(3,860	)			(1,450	)			—				(5,310	)
Cash and cash equivalents, beginning of period					—				14,610				4,520				—				19,130
Cash and cash equivalents, end of period				$	—			$	10,750			$	3,070			$	—			$	13,820

96

METALDYNE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (concluded)

Guarantor/Non-Guarantor
Condensed Consolidating Statement of Cash Flows
Year Ended December 29, 2002

				(In thousands)
				Parent				Guarantor				Non-Guarantor				Eliminations				Consolidated
Cash flows from operating activities:
Net cash provided by (used for) operating activities				$	—			$	(79,380	)		$	14,270			$	—			$	(65,110	)
Cash flows from investing activities:
Capital expenditures					—				(82,970	)			(33,480	)			—				(116,450	)
Disposition of businesses to a related party					—				—				840,000				—				840,000
Proceeds from sale/leaseback of fixed assets					—				52,180				—				—				52,180
Net cash provided by (used for) investing activities					—				(30,790	)			806,520				—				775,730
Cash flows from financing activities:
Proceeds of term loan facilities					—				400,000				—				—				400,000
Principal payments of term loan facilities					—				(671,850	)			(440,600	)			—				(1,112,450	)
Proceeds of revolving credit facility					—				324,800				—				—				324,800
Principal payments of revolving credit facility					—				(324,800	)			—				—				(324,800	)
Proceeds of senior subordinated notes, due 2012					250,000				—				—				—				250,000
Principal payments of convertible subordinated debentures, due 2003 (net of $1.2 million non-cash portion of repurchase)					—				(205,290	)			—				—				(205,290	)
Proceeds of other debt					—				—				920				—				920
Principal payments of other debt					—				(2,130	)			(3,960	)			—				(6,090	)
Capitalization of debt financing fees					—				(12,100	)			—				—				(12,100	)
Penalties on early extinguishment of debt					—				(6,480	)			—				—				(6,480	)
Change in intercompany accounts					(250,000	)			622,550				(372,550	)			—				—
Net cash provided by (used for) financing activities					—				124,700				(816,190	)			—				(691,490	)
Net increase (decrease) in cash					—				14,530				4,600				—				19,130
Cash and cash equivalents, beginning of period					—				—				—				—				—
Cash and cash equivalents, end of period				$	—			$	14,530			$	4,600			$	—			$	19,130

97

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not Applicable.

Item 9A.    Controls and Procedures.

In connection with its audit of the Company's financial statements as of January 2, 2005, KPMG advised the Company in March 2005 that the following items constituted material weaknesses: the extent to which manual journal entries at the plant level were able to be made without appropriate review or supporting documentation; the extent to which manual corporate level adjustments were required in the consolidation and financial reporting/close process; the need to perform regular, detailed account analyses and reconciliations; the need to improve controls to limit access to accounts payable and vendor files; the need to enhance controls related to fixed assets to ensure, among other things, timely asset classifications and the need to develop a process for controlling access to its various information technology systems. These material weaknesses, if unaddressed, could result in material errors in the Company's financial statements.

KPMG has made a number of business recommendations relating to the above-referenced material weaknesses. The Company had also been informed by KPMG in October 2004 of certain of these material weaknesses. The Company continues to review and implement remedial measures to compensate for these weaknesses, including additional oversight, centralized reconciliations and personnel reassignments.

The Company believes that certain of the issues highlighted above are caused in part by the predecessor companies' previously highly decentralized structure and the integration of their various financial systems, which current management has been addressing over time since the acquisition of the Company in November 2000.

The Company continues to devote substantial resources to the improvement and review of its control processes and procedures. The Company has taken actions or considered actions to address concerns and issues referred to above, and intends to continue taking actions as necessary to further address such concerns and issues, by (1) making personnel and organizational changes; (2) improving communications and internal reporting; (3) simplifying and making consistent various accounting policies and procedures and enhancing related documentation; (4) significantly expanding its training programs for both accounting and non-accounting employees related to accounting matters; (5) increasing management's focus on internal controls and improving the extent and timing of management oversight in a number of areas; and (6) implementing processes and procedures to reduce manual interventions and adjustments and more appropriately limit access to certain files and systems. The Company's Audit Committee and its Board of Directors have reviewed the actions undertaken to date in response to the material weaknesses outlined above and have authorized actions to improve control processes and procedures.

Specific remedial actions that have been undertaken since the Independent Investigation in 2004 include the following:

•	substantial additional training of accounting personnel and non-accounting personnel in accounting matters, including a Senior Financial Director of European operations;

•	revised incentive compensation system to eliminate plant specific performance criteria in favor of division-wide criteria;

•	in order to improve consistency in the financial reporting process, we appointed a Financial Controller to oversee all North American plant controllers and work to ensure that public reporting requirements are understood throughout the North American plants;

•	appointed a Director, Sarbanes Oxley Implementation in order to manage the Company's efforts to comply with the requirements of Section 404 of the Sarbanes-Oxley Act.

•	hired new members of the corporate accounting staff to work closely with plant operating personnel and institute fixed asset inventory and construction-in-progress analysis improvements;

•	improved corporate accounting policies and procedures documentation, including the institution of quarterly updates on accounting policy and procedure changes;

98

•	improved internal controls over financial reporting at the Company's European locations by reorganizing the reporting structure and requiring all European plant controllers to report directly to a Senior Finance Director that, in turn, reports directly to the Chief Financial Officer;

•	separated assignments, responsibility and access between the accounts payable group and central procurement group; and

•	improved procedures and review processes relative to plant manual journal entries, including the adoption of a new corporate policy requiring pre-approval of manual journal entries exceeding certain designated thresholds.

The Company will continue to evaluate the effectiveness of its controls and procedures on an ongoing basis, including consideration of internal control weaknesses and business recommendations identified by its auditors and intends to implement further actions in its continuing efforts to strengthen the control process.

In addition, the Company is undertaking a thorough review of its internal controls, including information technology systems and financial reporting as part of the Company's preparation for compliance with the internal control over financial reporting requirements of Section 404 of the Sarbanes-Oxley Act. Given the need to fully remedy the internal control weaknesses identified by KPMG, there can be no assurance that the Company will be able to remedy these weaknesses and take other actions required for compliance with Section 404 of the Sarbanes-Oxley Act by the required compliance date, which is the beginning of fiscal 2006.

Disclosure Controls and Procedures

Concurrent with the annual audit of the Company's financial statements, management, with the participation of our Chief Executive Officer and Chief Financial Officer, concluded an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934) pursuant to Rule 13a-15 of the Exchange Act. Our disclosure controls and procedures are designed only to provide reasonable assurance that they will meet their objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are not effective to provide reasonable assurance that they will meet their objectives as of January 2, 2005. Consequently, in connection with the preparation of this Annual Report, management of the Company undertook and completed reconciliations, analyses and reviews in addition to those historically completed to confirm that this Annual Report fairly presents in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in accordance with generally accepted accounting principles.

Item 9B.    Other Information.

Not Applicable.

99

PART III

Item 10.    Directors and Executive Officers of the Registrant.

Information regarding executive officers required by this Item is set forth as a Supplementary Item at the end of Part I hereof (pursuant to Instruction 3 to Item 401(b) of Regulation S-K). Other information required by this Item will be contained in the Company's definitive Proxy Statement for its 2005 Annual Meeting of Stockholders, to be filed on or before May 2, 2005, and such information is incorporated herein by reference.

Item 11.    Executive Compensation.

Information required by this Item will be contained in the Company's definitive Proxy Statement for its 2005 Annual Meeting of Stockholders, to be filed on or before May 2, 2005, and such information is incorporated herein by reference.

Item 12.    Security Ownership of Certain Beneficial Owners and Management.

Information required by this Item will be contained in the Company's definitive Proxy Statement for its 2005 Annual Meeting of Stockholders, to be filed on or before May 2, 2005, and such information is incorporated herein by reference.

Item 13.    Certain Relationships and Related Transactions.

Information required by this Item will be contained in the Company's definitive Proxy Statement for its 2005 Annual Meeting of Stockholders, to be filed on or before May 2, 2005, and such information is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

Information required by this Item will be contained in the Company's definitive Proxy Statement for its 2005 Annual Meeting of Stockholders, to be filed on or before May 2, 2005, and such information is incorporated herein by reference.

100

PART IV

Item 15. Exhibits, Financial Statement Schedule.

(A)    Listing of Documents.

(1)	Financial Statements.    The Company's Consolidated Financial Statements included in Item 8 hereof, as required at January 2, 2005 and December 28, 2003, and for the periods ended January 2, 2005, December 28, 2003 and December 29, 2002, consist of the following:

Consolidated Balance Sheet

Consolidated Statement of Income

Consolidated Statement of Cash Flows

Consolidated Statement of Shareholders' Equity

Notes to Consolidated Financial Statements

(2)	Financial Statement Schedule.

	Financial Statement Schedule of the Company appended hereto, as required for the periods ended January 2, 2005, December 28, 2003 and December 29, 2002, consist of the following:

Valuation and Qualifying Accounts

(3)    Exhibits.

Exhibit Number				Description of Exhibit
2.1				Recapitalization Agreement, dated as of August 1, 2000, between MascoTech, Inc. (now known as Metaldyne Corporation) and Riverside Company LLC (including Amendment No. 1 to the Recapitalization Agreement dated October 23, 2000 and Amendment No. 2 to the Recapitalization Agreement dated November 28, 2000) (Incorporated by reference to Exhibit 2 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
3.1				Restated Certificate of Incorporation of MascoTech, Inc. (Incorporated by reference to Exhibit 3.1 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2000).
3.2				Bylaws of Metaldyne Corporation, as amended (Incorporated by reference to Exhibit 3.2 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
3.3				Certificate of Designation of Series A-1 Preferred Stock and Series A-2 Preferred Stock (Incorporated by reference to Exhibit 10.5 to Metaldyne Corporation's Current Report on Form 8-K filed December 11, 2002).
3.4				Certificate of Designation of Series B Preferred Stock.
4.1				Shareholders Agreement, dated as of November 28, 2000, by and among MascoTech, Inc., Masco Corporation, Richard Manoogian, certain of their respective affiliates and other co-investors party thereto (Incorporated by reference to Exhibit 10.20 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
4.2				Indenture relating to the 11% Senior Subordinated Notes due 2012, dated as of June 20, 2002, by and among Metaldyne Corporation, each of the Guarantors named therein, and The Bank of New York as Trustee (Incorporated by reference to Exhibit 4.1 to Metaldyne Corporation's Registration Statement on Form S-4 filed on September 10, 2002).

101

Exhibit Number				Description of Exhibit
4.3				Form of note relating to the 11% Senior Subordinated Notes due 2012 (Incorporated by reference to Exhibit 4.2 to Metaldyne Corporation's Registration Statement on Form S-4 filed on September 10, 2002).
4.4				Registration Rights Agreement relating to the notes, dated as of June 20, 2002, by and among Metaldyne Corporation and the parties named therein (Incorporated by reference to Exhibit 4.3 to Metaldyne Corporation's Registration Statement on Form S-4 filed on September 10, 2002).
4.5				Indenture relating to the 10% Senior Subordinated Notes due 2013, dated as of December 31, 2003, by and among Metaldyne Corporation, the Guarantors named therein and the Trustee (as defined therein) (Incorporated by reference to Exhibit 10.3 to Metaldyne Corporation's Current Report on Form 8-K filed January 14, 2004).
4.6				Form of note relating to the 10% Senior Subordinated Notes due 2013 (included in Exhibit 4.5).
4.7				Registration Rights Agreement, dated as of December 31, 2003, by and among Metaldyne Corporation, each of the Guarantors named therein, and DaimlerChrysler Corporation (Incorporated by reference to Exhibit 10.4 to Metaldyne Corporation's Current Report on Form 8-K filed January 14, 2004).
4.8				Indenture relating to the 10% Senior Notes due 2013, dated as of October 27, 2003, by and among Metaldyne Corporation, each of the Guarantors named therein, and The Bank of New York as Trustee (Incorporated by reference to Exhibit 4.8 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
4.9				Form of note relating to the 10% Senior Notes due 2013 (included in Exhibit 4.8).
4.10				Registration Rights Agreement relating to the Senior Notes due 2013, dated as of October 27, 2003, by and among Metaldyne Corporation and the other parties named therein (Incorporated by reference to Exhibit 4.10 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.1				Assumption and Indemnification Agreement, dated as of May 1, 1984, between Masco Corporation and Masco Industries, Inc. (now known as Metaldyne Corporation) (Incorporated by reference to Exhibit 10.3 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2000).
10.2				Credit Agreement, dated as of November 28, 2000, as amended and restated as of June 20, 2002, by and among Metaldyne Corporation, Metaldyne Company, the foreign subsidiary borrowers party thereto, the lenders party thereto and JP Morgan Chase Bank, as administrative agent and collateral agent (the "Amended and Restated Credit Agreement") (Incorporated by reference to Exhibit 10 to Metaldyne Corporation's Quarterly Report on Form 10-Q for the period ended June 30, 2002).
10.2.1				Amendment No. 1 and Agreement to the Amended and Restated Credit Agreement dated July 15, 2003 (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Report on Form 10-Q for the period ended June 29, 2003).
10.2.2				Waiver and Agreement to the Amended and Restated Credit Agreement, dated as of April 1, 2004 (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed April 5, 2004).

102

Exhibit Number				Description of Exhibit
10.2.3				Waiver and Amendment No. 2 to the Amended and Restated Credit Agreement, dated as of May 26, 2004 (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed April 5, 2004).
10.2.4				Waiver and Amendment No. 3 to the Amended and Restated Credit Agreement, dated as of September 29, 2004 (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed October 1, 2004).
10.2.5				Amendment No. 4 to the Amended and Restated Credit Agreement, dated as of December 21, 2004 (Incorporated by reference to Exhibit 99.1 to Metaldyne Corporation's Current Report on Form 8-K filed December 27, 2004).
10.3				Receivables Purchase Agreement dated as of November 28, 2000 among MascoTech, Inc. the Sellers named therein and MTSPC, Inc., as Purchaser (Incorporated by reference to Exhibit 10.2 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
10.3.1				Commitment Letter dated as of March 31, 2005, between Metaldyne Corporation and General Electric Capital Corporation, relating to an extension of the existing accounts receivable securitization facility and a replacement accounts receivable securitization facility.
10.4				Receivables Transfer Agreement dated as of November 28, 2000 by and among MTSPC, Inc., MascoTech, Inc., The Chase Manhattan Bank, and the other parties named therein (Incorporated by reference to Exhibit 10.3 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
10.4.1				Amendment No. 1 to Receivables Transfer Agreement dated as of December 15, 2000 (Incorporated by reference to Exhibit 10.4 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2000).
10.4.2				Amendment No. 2 to the Receivables Transfer Agreement dated as of March 23, 2001 (Incorporated by reference to Exhibit 10.21 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2001).
10.4.3				Amendment No. 3 to the Receivables Transfer Agreement dated as of June 22, 2001 (Incorporated by reference to Exhibit 10.22 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2001).
10.4.4				Amendment No. 4 to the Receivables Transfer Agreement dated as of October 18, 2001 (Incorporated by reference to Exhibit 10.23 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2001).
10.4.5				Amendment No. 5 to the Receivables Transfer Agreement dated as of March 15, 2002.
10.4.6				Amendment No. 6 to the Receivables Transfer Agreement dated as of February 13, 2003.
10.4.7				Waiver and Agreement to the Receivables Transfer Agreement, dated as of April 1, 2004 (Incorporated by reference to Exhibit 10.2 to Metaldyne Corporation's Current Report on Form 8-K filed April 5, 2004).
10.4.8				Waiver and Agreement to the Receivables Transfer Agreement, dated as of May 26, 2004 (Incorporated by reference to Exhibit 10.2 to Metaldyne Corporation's Current Report on Form 8-K filed May 28, 2004).
10.4.9				Waiver and Agreement to the Receivables Transfer Agreement, dated as of September 29, 2004 (Incorporated by reference to Exhibit 10.2 to Metaldyne Corporation's Current Report on Form 8-K filed October 1, 2004).

103

Exhibit Number				Description of Exhibit
10.5				Master Lease Agreement, dated as of December 21, 2000, between General Electric Capital Corporation and Simpson Industries, Inc (Incorporated by reference to Exhibit 10.7 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2000).
10.6				Metaldyne Corporation 2001 Long Term Incentive and Share Award Plan (Incorporated by reference to Exhibit 4.1 to Metaldyne Corporation's Registration Statement of Form S-8 filed April 15, 2002).
10.7				MascoTech, Inc. Supplemental Executive Retirement and Disability Plan (Incorporated by reference to Exhibit 10.n to MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1999).
10.8				Description of the MascoTech, Inc. program for Estate, Financial Planning and Tax Assistance (Incorporated by reference to Exhibit 10.x to MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).
10.9				Description of the Metaldyne Annual Value Creation Plan (Incorporated by reference to Exhibit 10.9 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.10				Description of the Metaldyne Executive Retirement Plan (Incorporated by reference to Exhibit 10.10 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.11				Metaldyne Corporation Voluntary Stock Option Exchange Program Offer Summary (Incorporated by reference to Exhibit 10.11 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.12				Joint Venture Formation Agreement, dated as of December 8, 2002, by and among NC-M Chassis Systems, LLC, DaimlerChrysler Corporation and Metaldyne Corporation (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed December 11, 2002).
10.13				Investor Rights Agreement, dated as of December 31, 2003, by and among Metaldyne Corporation and DaimlerChrysler Corporation (Incorporated by reference to Exhibit 10.2 to Metaldyne Corporation's Current Report on Form 8-K filed January 14, 2004).
10.14				Asset Purchase Agreement, dated as of May 9, 2003, by and among TriMas Corporation, Metaldyne Corporation and Metaldyne Company LLC (Incorporated by reference to Exhibit 10.2 to Metaldyne Corporation's Quarterly Report on Form 10-Q for the period ended June 29, 2003).
10.15				Fittings Facility Sublease, dated May 9, 2003, by and between Metaldyne Company LLC and Fittings Products Co., LLC (Incorporated by reference to Exhibit 10.3 to Metaldyne Corporation's Report Quarterly on Form 10-Q for the period ended June 29, 2003).
10.16				Employment Agreement between Metaldyne Corporation and Timothy Leuliette (as amended) (Incorporated by reference to Exhibit 10.16 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.17				Employment Agreement between Metaldyne Corporation and Jeffrey M. Stafeil (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Quarterly Report on Form 10-Q for the period ended September 28, 2003.)

104

Exhibit Number				Description of Exhibit
10.17.1				Amendment to Employment Agreement between Metaldyne Corporation and Jeffrey M. Stafeil (Incorporated by reference to Exhibit 10.17.1 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.18				Employment Agreement between Metaldyne Corporation and Bruce Swift (as amended) (Incorporated by reference to Exhibit 10.18 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.19				Employment Agreement between Metaldyne Corporation and Joseph Nowak (as amended) (Incorporated by reference to Exhibit 10.19 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.20				Employment Agreement between Metaldyne Corporation and George Thanopolous (Incorporated by reference to Exhibit 10.20 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.24				Release Agreement between Metaldyne Corporation and George Thanopolous (Incorporated by reference to Exhibit 10.24 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.25				Change of Control Agreement, dated August 11, 2004, between Metaldyne Corporation and Thomas Chambers (Incorporated by reference to Exhibit 10.25 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.26				Release Agreement between Metaldyne Corporation and Bruce Swift (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed January 20, 2005).
10.27				Employment Agreement between Metaldyne Corporation and Thomas Amato (as amended).
12.1				Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
14.1				Code of Ethics (Incorporated by reference to Exhibit 14.1 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
21.1				Subsidiaries of Metaldyne Corporation (Incorporated by reference to Exhibit 21.1 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
23.1				Consent of PricewaterhouseCoopers LLP.
23.2				Consent of KPMG LLP.
31.1				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

105

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

				Metaldyne Corporation
				By: /s/ Jeffrey M. Stafeil
				Jeffrey M. Stafeil Executive Vice President and Chief Financial Officer (Chief Accounting Officer and Authorized Signatory) March 31, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature		Title		Date
/s/ Timothy D. Leuliette		President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)		March 31, 2005
Timothy D. Leuliette
/s/ Jeffrey M. Stafeil		Executive Vice President and Chief Financial Officer (Chief Accounting Officer)		March 31, 2005
Jeffrey M. Stafeil
/s/ J. Michael Losh		Director		March 31, 2005
J. Michael Losh
/s/ Gary M. Banks		Director		March 31, 2005
Gary M. Banks
/s/ Charles E. Becker		Director		March 31, 2005
Charles E. Becker
/s/ Marshall A. Cohen		Director		March 31, 2005
Marshall A. Cohen
/s/ Cynthia L. Hess		Director		March 31, 2005
Cynthia L. Hess
/s/ Richard A. Manoogian		Director		March 31, 2005
Richard A. Manoogian
/s/ Wendy B. Needham		Director		March 31, 2005
Wendy B. Needham
/s/ David A. Stockman		Director		March 31, 2005
David A. Stockman
/s/ Daniel P. Tredwell		Director		March 31, 2005
Daniel P. Tredwell
/s/ Samuel Valenti, III		Director		March 31, 2005
Samuel Valenti, III

106

METALDYNE CORPORATION

FINANCIAL STATEMENT SCHEDULE
PURSUANT TO ITEM 14(A)(2) OF FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
FOR THE YEAR ENDED JANUARY 2, 2005

Schedule, as required for the years ended January 2, 2005, December 28, 2003 and December 29, 2002.

				Page
II.    Valuation and Qualifying Accounts				108

107

METALDYNE CORPORATION
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JANUARY 2, 2005, DECEMBER 28, 2003 AND DECEMBER 29, 2002

Column A				Column B				Column C								Column D				Column E
								Additions
Description				Balance at Beginning of Period				Charged (Credited) to Cost and Expenses				Charged (Credited) to Other Accounts				Deductions				Balance at End of Period
												(A)				(B)
Allowance for doubtful accounts, deducted from accounts receivable in the balance sheet:
2004				$	3,090,000			$	(90,000	)		$	860,000			$	1,120,000			$	2,740,000
2003				$	3,820,000			$	2,390,000			$	(1,700,000	)		$	1,420,000			$	3,090,000
2002				$	5,380,000			$	2,970,000			$	(2,400,000	)		$	2,130,000			$	3,820,000

	Notes:

	(A)    Allowance of companies acquired, reduction of allowance for companies divested, and other adjustments, net.

	(B)    Deductions, representing uncollectible accounts written off, less recoveries of accounts written off in prior years.

108

EXHIBIT INDEX

Exhibit Number				Description of Exhibit
2.1				Recapitalization Agreement, dated as of August 1, 2000, between MascoTech, Inc. (now known as Metaldyne Corporation) and Riverside Company LLC (including Amendment No. 1 to the Recapitalization Agreement dated October 23, 2000 and Amendment No. 2 to the Recapitalization Agreement dated November 28, 2000) (Incorporated by reference to Exhibit 2 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
3.1				Restated Certificate of Incorporation of MascoTech, Inc. (Incorporated by reference to Exhibit 3.1 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2000).
3.2				Bylaws of Metaldyne Corporation, as amended (Incorporated by reference to Exhibit 3.2 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
3.3				Certificate of Designation of Series A-1 Preferred Stock and Series A-2 Preferred Stock (Incorporated by reference to Exhibit 10.5 to Metaldyne Corporation's Current Report on Form 8-K filed December 11, 2002).
3.4				Certificate of Designation of Series B Preferred Stock.
4.1				Shareholders Agreement, dated as of November 28, 2000, by and among MascoTech, Inc., Masco Corporation, Richard Manoogian, certain of their respective affiliates and other co-investors party thereto (Incorporated by reference to Exhibit 10.20 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
4.2				Indenture relating to the 11% Senior Subordinated Notes due 2012, dated as of June 20, 2002, by and among Metaldyne Corporation, each of the Guarantors named therein, and The Bank of New York as Trustee (Incorporated by reference to Exhibit 4.1 to Metaldyne Corporation's Registration Statement on Form S-4 filed on September 10, 2002).
4.3				Form of note relating to the 11% Senior Subordinated Notes due 2012 (Incorporated by reference to Exhibit 4.2 to Metaldyne Corporation's Registration Statement on Form S-4 filed on September 10, 2002).
4.4				Registration Rights Agreement relating to the notes, dated as of June 20, 2002, by and among Metaldyne Corporation and the parties named therein (Incorporated by reference to Exhibit 4.3 to Metaldyne Corporation's Registration Statement on Form S-4 filed on September 10, 2002).
4.5				Indenture relating to the 10% Senior Subordinated Notes due 2013, dated as of December 31, 2003, by and among Metaldyne Corporation, the Guarantors named therein and the Trustee (as defined therein) (Incorporated by reference to Exhibit 10.3 to Metaldyne Corporation's Current Report on Form 8-K filed January 14, 2004).
4.6				Form of note relating to the 10% Senior Subordinated Notes due 2013 (included in Exhibit 4.5).
4.7				Registration Rights Agreement, dated as of December 31, 2003, by and among Metaldyne Corporation, each of the Guarantors named therein, and DaimlerChrysler Corporation (Incorporated by reference to Exhibit 10.4 to Metaldyne Corporation's Current Report on Form 8-K filed January 14, 2004).

Exhibit Number				Description of Exhibit
4.8				Indenture relating to the 10% Senior Notes due 2013, dated as of October 27, 2003, by and among Metaldyne Corporation, each of the Guarantors named therein, and The Bank of New York as Trustee (Incorporated by reference to Exhibit 4.8 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
4.9				Form of note relating to the 10% Senior Notes due 2013 (included in Exhibit 4.8).
4.10				Registration Rights Agreement relating to the Senior Notes due 2013, dated as of October 27, 2003, by and among Metaldyne Corporation and the other parties named therein (Incorporated by reference to Exhibit 4.10 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.1				Assumption and Indemnification Agreement, dated as of May 1, 1984, between Masco Corporation and Masco Industries, Inc. (now known as Metaldyne Corporation) (Incorporated by reference to Exhibit 10.3 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2000).
10.2				Credit Agreement, dated as of November 28, 2000, as amended and restated as of June 20, 2003, by and among Metaldyne Corporation, Metaldyne Company, the foreign subsidiary borrowers party thereto, the lenders party thereto and JP Morgan Chase Bank, as administrative agent and collateral agent (the "Amended and Restated Credit Agreement") (Incorporated by reference to Exhibit 10 to Metaldyne Corporation's Quarterly Report on Form 10-Q for the period ended June 30, 2002).
10.2.1				Amendment No. 1 and Agreement to the Amended and Restated Credit Agreement dated July 15, 2003 (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Report on Form 10-Q for the period ended June 29, 2003).
10.2.2				Waiver and Agreement to the Amended and Restated Credit Agreement, dated as of April 1, 2004 (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed April 5, 2004).
10.2.3				Waiver and Amendment No. 2 to the Amended and Restated Credit Agreement, dated as of May 26, 2004 (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed April 5, 2004).
10.2.4				Waiver and Amendment No. 3 to the Amended and Restated Credit Agreement, dated as of September 29, 2004 (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed October 1, 2004).
10.2.5				Amendment No. 4 to the Amended and Restated Credit Agreement, dated as of December 21, 2004 (Incorporated by reference to Exhibit 99.1 to Metaldyne Corporation's Current Report on Form 8-K filed December 27, 2004).
10.3				Receivables Purchase Agreement dated as of November 28, 2000 among MascoTech, Inc. the Sellers named therein and MTSPC, Inc., as Purchaser (Incorporated by reference to Exhibit 10.2 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
10.3.1				Commitment Letter dated as of March 31, 2005, between Metaldyne Corporation and General Electric Capital Corporation, relating to an extension of the existing accounts receivable securitization facility and a replacement accounts receivable securitization facility.

Exhibit Number				Description of Exhibit
10.4				Receivables Transfer Agreement dated as of November 28, 2000 by and among MTSPC, Inc., MascoTech, Inc., The Chase Manhattan Bank, and the other parties named herein (Incorporated by reference to Exhibit 10.3 to MascoTech, Inc.'s Registration Statement on Form S-1 filed December 27, 2000).
10.4.1				Amendment No. 1 to Receivables Transfer Agreement dated as of December 15, 2000 (Incorporated by reference to Exhibit 10.4 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2000).
10.4.2				Amendment No. 2 to the Receivables Transfer Agreement dated as of March 23, 2001 (Incorporated by reference to Exhibit 10.21 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2001).
10.4.3				Amendment No. 3 to the Receivables Transfer Agreement dated as of June 22, 2001 (Incorporated by reference to Exhibit 10.22 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2001).
10.4.4				Amendment No. 4 to the Receivables Transfer Agreement dated as of October 18, 2001 (Incorporated by reference to Exhibit 10.23 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2001).
10.4.5				Amendment No. 5 to the Receivables Transfer Agreement dated as of March 15, 2002.
10.4.6				Amendment No. 6 to the Receivables Transfer Agreement dated as of February 13, 2003.
10.4.7				Waiver and Agreement to the Receivables Transfer Agreement, dated as of April 1, 2004 (Incorporated by reference to Exhibit 10.2 to Metaldyne Corporation's Current Report on Form 8-K filed April 5, 2004).
10.4.8				Waiver and Agreement to the Receivables Transfer Agreement, dated as of May 26, 2004 (Incorporated by reference to Exhibit 10.2 to Metaldyne Corporation's Current Report on Form 8-K filed May 28, 2004).
10.4.9				Waiver and Agreement to the Receivables Transfer Agreement, dated as of September 29, 2004 (Incorporated by reference to Exhibit 10.2 to Metaldyne Corporation's Current Report on Form 8-K filed October 1, 2004).
10.5				Master Lease Agreement, dated as of December 21, 2000, between General Electric Capital Corporation and Simpson Industries, Inc. (Incorporated by reference to Exhibit 10.7 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 31, 2000).
10.6				Metaldyne Corporation 2001 Long Term Incentive and Share Award Plan (Incorporated by reference to Exhibit 4.1 to Metaldyne Corporation's Registration Statement of Form S-8 filed April 15, 2002).
10.7				MascoTech, Inc. Supplemental Executive Retirement and Disability Plan (Incorporated by reference to Exhibit 10.n to MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1999).
10.8				Description of the MascoTech, Inc. program for Estate, Financial Planning and Tax Assistance (Incorporated by reference to Exhibit 10.x to MascoTech, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).
10.9				Description of the Metaldyne Annual Value Creation Plan (Incorporated by reference to Exhibit 10.9 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).

Exhibit Number				Description of Exhibit
10.10				Description of the Metaldyne Executive Retirement Plan (Incorporated by reference to Exhibit 10.10 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.11				Metaldyne Corporation Voluntary Stock Option Exchange Program Offer Summary (Incorporated by reference to Exhibit 10.11to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.12				Joint Venture Formation Agreement, dated as of December 8, 2002, by and among NC-M Chassis Systems, LLC, DaimlerChrysler Corporation and Metaldyne Corporation (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed December 11, 2002).
10.13				Investor Rights Agreement, dated as of December 31, 2003, by and among Metaldyne Corporation and DaimlerChrysler Corporation (Incorporated by reference to Exhibit 10.2 toMetaldyne Corporation's Current Report on Form 8-K filed January 14, 2004).
10.14				Asset Purchase Agreement, dated as of May 9, 2003, by and among TriMas Corporation, Metaldyne Corporation and Metaldyne Company LLC (Incorporated by reference to Exhibit 10.2 to Metaldyne Corporation's Quarterly Report on Form 10-Q for the period ended June 29, 2003).
10.15				Fittings Facility Sublease, dated May 9, 2003, by and between Metaldyne Company LLC and Fittings Products Co., LLC (Incorporated by reference to Exhibit 10.3 to Metaldyne Corporation's Quarterly Report on Form 10-Q for the period ended June 29, 2003).
10.16				Employment Agreement between Metaldyne Corporation and Timothy Leuliette (as amended) (Incorporated by reference to Exhibit 10.16 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.17				Employment Agreement between Metaldyne Corporation and Jeffrey M. Stafeil (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Quarterly Report on Form 10-Q for the period ended September 28, 2003.)
10.17.1				Amendment to Employment Agreement between Metaldyne Corporation and Jeffrey M. Stafeil (Incorporated by reference to Exhibit 10.17.1 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.18				Employment Agreement between Metaldyne Corporation and Bruce Swift (as amended) (Incorporated by reference to Exhibit 10.18 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.19				Employment Agreement between Metaldyne Corporation and Joseph Nowak (as amended) (Incorporated by reference to Exhibit 10.19 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.20				Employment Agreement between Metaldyne Corporation and George Thanopolous (Incorporated by reference to Exhibit 10.20 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.24				Release Agreement between Metaldyne Corporation and George Thanopolous (Incorporated by reference to Exhibit 10.24 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
10.25				Change of Control Agreement, dated August 11, 2004, between Metaldyne Corporation and Thomas Chambers (Incorporated by reference to Exhibit 10.25 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).

Exhibit Number				Description of Exhibit
10.26				Release Agreement between Metaldyne Corporation and Bruce Swift (Incorporated by reference to Exhibit 10.1 to Metaldyne Corporation's Current Report on Form 8-K filed January 20, 2005).
10.27				Employment Agreement between Metaldyne Corporation and Thomas Amato (as amended).
12.1				Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
14.1				Code of Ethics (Incorporated by reference to Exhibit 14.1 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
21.1				Subsidiaries of Metaldyne Corporation (Incorporated by reference to Exhibit 21.1 to Metaldyne Corporation's Annual Report on Form 10-K for the year ended December 28, 2003).
23.1				Consent of PricewaterhouseCoopers LLP.
23.2				Consent of KPMG LLP.
31.1				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2				Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-3.4

                                                                  Execution Copy

                           CERTIFICATE OF DESIGNATIONS
                                       OF
                            SERIES B PREFERRED STOCK
                                       OF
                              METALDYNE CORPORATION

                  We, Timothy D. Leuliette, President, and R. Jeffrey Pollock,
Secretary, of Metaldyne Corporation, a corporation organized and existing under
the laws of the State of Delaware (the "Company"), certify that pursuant to the
authority contained in Article 4B of the Company's Amended and Restated
Certificate of Incorporation, and in accordance with the provisions of Section
151 of the General Corporation Law of the State of Delaware, the Board of
Directors of the Company has adopted, on June 13, 2001, the following resolution
creating a new series of preferred stock of the Company, designated as Series B
Preferred Stock:

                  RESOLVED, by the Board of Directors of Metaldyne Corporation,
a Delaware corporation (the "Company"), that pursuant to Article 4B of the
Amended and Restated Certificate of Incorporation of the Company, there be, and
hereby is, established a new series of preferred stock of the Company,
consisting of One Hundred Eighty Four Thousand One Hundred and Fifty Three
(184,153) shares, par value $1.00 per share, designated "Series B Preferred
Stock" and having the powers, designations, preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions on such preferences and/or rights as set forth as
follows:

                  (1)DESIGNATION. One Hundred Eighty Four Thousand One Hundred
         and Fifty Three (184,153) shares of preferred stock, par value one
         dollar ($1.00) per share, shall be designated "Series B Preferred
         Stock." The Series B Preferred Stock shall have the following rights,
         terms and privileges set forth in subsections (2) through (10) below.

                  (2) DIVIDENDS ON PREFERRED STOCK. (a) The holders of the
         Series B Preferred Stock shall be entitled to receive, when, as and if
         declared by the Company's Board of Directors, out of the funds of the
         Company legally available therefor pursuant to the Delaware General
         Corporation Law (the "Legally Available Funds"), cumulative dividends
         on each share of Series B Preferred Stock for Each Preferred Stock
         Dividend Period (as hereinafter defined) equal to the Series B
         Liquidation Preference, in effect as of the end of the immediately
         preceding Preferred Stock Dividend Period, of each such share
         multiplied by a rate equal to 5.75% (or the equivalent of 11.5% per
         annum). Dividends, whether or not declared, will accumulate until
         declared and paid. Dividends for any Preferred Stock Dividend Period
         will be payable, if declared, on each Dividend Payment Date (as
         hereinafter defined) with respect to such Preferred Stock Dividend
         Period and any accrued dividends not paid on any Dividend Payment Date
         will be added to the Series B Liquidation Preference and


         dividends will thereafter accrue on such amount so at to achieve
         semi-annual compounding. The addition of accrued and unpaid dividends
         to the Series B Liquidation Preference of a share of Series B Preferred
         Stock on any Dividend Payment Date will constitute payment of such
         dividends for all purposes. Each such dividend shall be paid to the
         holders of record of shares of Series B Preferred Stock as they appear
         on the stock register of the Company on such record date as shall be
         fixed by the Board of Directors of the Company or a duly authorized
         committee thereof, which date shall be not more than 30 days nor less
         than 10 days preceding the Dividend Payment Date relating thereto.

                           (b) If dividends are not paid in full or declared on
         the Series B Preferred Stock and any other Parity Stock (as hereinafter
         defined), all dividends declared upon shares of Series B Preferred
         Stock and any other Parity Stock shall be declared pro rata so that in
         all cases the amount of dividends declared per share on the Series B
         Preferred Stock and such other Parity Stock shall bear to each other
         the same ratio that accumulated dividends per share, including
         dividends accrued or in arrears, if any, on the share of Series B
         Preferred Stock and such other Parity Stock shall bear to each other;
         provided that no dividends shall be declared on any Parity Stock if the
         Series B Preferred Stock is in arrearage unless the number of Preferred
         Stock Dividend Periods for which the Series B preferred Stock is in
         arrears does not exceed the number of quarterly periods for which such
         Parity Stock is in arrearage immediately prior to the making of the
         such pro rata dividends.

                           (c) Dividends payable on the Series B Preferred Stock
         for any period less than a full Preferred Stock Dividend Period shall
         be computed on the basis of a 360-day year of twelve 30-day months and
         the actual number of days elapsed in the period for which payable.

                           (d) "Preferred Stock Dividend Period" means, with
         respect to the Series B Preferred Stock, the period from January 1
         through June 30 and from July 1 through December 31; provided that the
         first Preferred Stock Dividend Period shall mean the period commencing
         on June 15, 2001 and ending on December 31, 2001. The last day of any
         Preferred Stock Dividend Period or, if such is not a Business Day, the
         next succeeding Business Day shall be referred to as a "Dividend
         Payment Date."

                           (e) Business Day" means, with respect to the Series B
         Preferred Stock, any day other than a Saturday, a Sunday or any day on
         which banking institutions in the State of New York or the New York
         Stock Exchange is closed.

                           (3) REDEMPTION OF SERIES B PREFERRED STOCK.

                           (a) Mandatory Redemption. The Company shall redeem,
         out of Legally Available Funds on June 15, 2013 all then outstanding
         shares of Series B Preferred Stock at a redemption price of 100% of the
         then Series B Liquidation


         Preference. Immediately prior to authorizing or making any such
         redemption with respect to the Series B Preferred Stock, the Company,
         by resolution of its Board of Directors, shall, to the extent of any
         Legally Available Funds, declare a dividend on the Series B Preferred
         Stock payable on the redemption date in an amount equal to any accrued
         and unpaid dividends on the Series B Preferred Stock as of such date
         and, if the Company does not have sufficient Legally Available Funds to
         declare and pay all dividends accrued at the time of such redemption,
         any remaining accrued and unpaid dividends shall be added to the
         redemption price. If the Company shall fail to discharge its obligation
         to redeem all of the outstanding shares of Series B Preferred Stock
         required to be redeemed pursuant to this subsection(3) (the "Series B
         Mandatory Redemption Obligation"), the Series B Mandatory Redemption
         Obligation shall be discharged as soon as the Company is able to
         discharge such Series B Mandatory Redemption Obligation and the Voting
         Period set forth in subsection (7) will apply in accordance with its
         terms, without otherwise affecting the Company's obligations hereunder.

                  (b) Optional Redemption. The Series B Preferred Stock shall be
         redeemable, in whole or in part, at any time out of Legally Available
         Funds, at the option of the Company by resolution of its Board of
         Directors, at a redemption price of 100% of the then Series B
         Liquidation Preference, upon giving notice as provided in paragraph (c)
         below. Immediately prior to authorizing or making any such redemption
         with respect to the Series B Preferred Stock, the Company, by
         resolution of its Board of Directors, shall, to the extent of any
         Legally Available Funds, declare a dividend on the Series B Preferred
         Stock payable on the redemption date in an amount equal to any accrued
         and unpaid dividends on the Series B Preferred Stock as of such date
         and, if the Company does not have sufficient Legally Available Funds to
         declare and pay all dividends accrued at the time of such redemption,
         any remaining accrued and unpaid dividends shall be added to the
         redemption price.

                  (c) Notice of Redemption. At least 30 days but not more than
         60 days prior to the date fixed for the redemption of shares of the
         Series B Preferred Stock pursuant to paragraph (a) or (b) above, a
         written notice shall be mailed to each holder of record (or such
         holder's authorized representative) of shares of Series B Preferred
         Stock to be redeemed in a postage prepaid envelope addressed to such
         holder at his post office address as shown on the records of the
         Company, notifying such holder of the election of the Company to redeem
         such shares, stating the date fixed for redemption thereof (hereinafter
         referred to as the redemption date) and calling upon such holder to
         surrender to the Company of the redemption date at the place designated
         in such notice his certificate or certificates representing the number
         of shares specified in such notice of redemption. On or after the
         redemption date each holder of shares of Series B Preferred Stock to be
         redeemed shall present and surrender his certificate or certificates
         for such shares to the Company at the place designated in such notice
         and thereupon the redemption price of such shares shall be paid to or
         on the order of the person whose name appears on such certificate or
         certificates as the owner thereof and


         each surrendered certificate shall be canceled. In case less than all
         the shares represented by such certificate are redeemed, a new
         certificate shall be issued representing the unredeemed shares. From
         and after the redemption date (unless default shall be made by the
         Company in payment of the redemption price) all dividends on the shares
         of Series B Preferred Stock designated for redemption in such notice
         shall cease to accrue and all rights of the holders thereof as
         stockholders of the Company, except the right to receive the redemption
         price thereof (including an amount equal to all accrued and unpaid
         dividends up to the redemption date) upon the surrender of certificates
         representing the same, shall cease and terminate and such shares shall
         not thereafter be transferred (except with the consent of the Company)
         on the books of the Company and such shares shall not be deemed to be
         outstanding for any purpose whatsoever. At its election, the Company
         prior to the redemption date may deposit the redemption price
         (including an amount equal to all accrued and unpaid dividends up to
         the redemption date) of the shares of Series B Preferred Stock so
         called for redemption in trust for the holders thereof with a bank or
         trust company in the Borough of Manhattan, City and State of New York,
         in which case such notice to holders of the Series B Preferred Stock to
         be redeemed shall state the date of such deposit, shall specify the
         office of such bank or trust company as the place of payment of the
         redemption price and shall call upon such holders to surrender the
         certificates representing such shares at such price on or after the
         date fixed in such redemption notice (which shall not be later than the
         redemption date) against payment of the redemption price (including all
         accrued and unpaid dividends up to the redemption date). From and after
         the making of such deposit, the shares of Series B Preferred Stock so
         designated for redemption shall not be deemed to be outstanding for any
         purpose whatsoever and the rights of the holders of such shares shall
         be limited to the right to receive the redemption price of such shares
         (including all accrued and unpaid dividends up to the redemption date),
         without interest, upon surrender of the certificates representing the
         same to the Company at said office of such bank or trust company. Any
         interest accrued on such funds shall be paid to the Company from time
         to time. Any moneys so deposited which shall remain unclaimed by the
         holders of such Series B Preferred Stock at the end of six months after
         the redemption date shall be returned by such bank or trust company to
         the Company, after which the holders of the Series B Preferred Stock
         shall have no further interest in such moneys, except as unsecured
         claimants of the Company.

                  (d) Reissuances. Shares of Series B Preferred Stock which have
         been issued and reacquired by the Company in any manner, including
         shares purchased or redeemed or exchanged, shall be cancelled and
         retired and shall not be reissued as shares of Series B Preferred Stock
         and, following any required filing with the Delaware Secretary of
         State, such shares shall resume the status of authorized but unissued
         shares of preferred stock.


                  (e) Selection of Shares to Be Redeemed. If less than all of
         the shares of Series B Preferred Stock are to be redeemed, the Board of
         Directors of the Company shall allocate the total liquidation
         preference to be redeemed pro rata.

                  (4) CHANGE IN CONTROL. (a) If a Preferred Stock Change in
         Control (as hereinafter defined) shall occur at any time, then each
         holder of Series B Preferred Stock shall have the right to require that
         the Company purchase such holder's Series B Preferred Stock, in whole
         or in part, out of Legally Available Funds at a cash purchase price (a
         "Preferred Stock Change in Control Payment") in an amount equal to 100%
         of the then Series B Liquidation Preference plus accrued and unpaid
         dividends, if any, to the date of purchase, pursuant to the offer
         described below (the "Preferred Stock Change in Control Offer") and the
         other procedures set fourth herein.

                  (b) Within the time period specified in subsection (4)(d)
         below, the Company will mail a notice to each holder of Series B
         Preferred Stock with the following information: (i) a Preferred Stock
         Change in Control Offer is being made pursuant to this subsection (4)
         and that all Series B Preferred Stock properly tendered pursuant to
         such Change in Control Offer will be accepted for payment; (ii) the
         purchase price and the purchase date, which will be no earlier than 30
         days nor later than 60 days from the date such notice is mailed, except
         as may be otherwise required by applicable law (the "Preferred Stock
         Change in Control Payment Date"); (iii) any Series B Preferred Stock
         not properly tendered will remain outstanding and continue to accrue
         dividends; (iv) unless the Company defaults in making the Preferred
         Stock Change in Control Payment, all Series B Preferred Stock accepted
         for payment pursuant to the Preferred Stock Change in Control Offer
         will cease to accumulate dividends on the Preferred Stock Change in
         Control Payment Date; (v) holders of Series B Preferred Stock electing
         to have any shares of Series B Preferred Stock purchased pursuant to a
         Preferred Stock Change in Control Offer will be required to surrender
         such shares, properly endorsed for transfer, to the transfer agent for
         the Series B Preferred Stock at the address specified in the notice
         prior to the close of business on the third Business Day preceding the
         Change in Control Payment Date; (vi) holders of Series B Preferred
         Stock will be entitled to withdraw their tendered shares of Series B
         Preferred Stock and their election to require the Company to purchase
         such shares, provided that the transfer agent receives, not later than
         the close of business on the last day of the offer period, a telegram,
         telex, facsimile transmission or letter setting forth the name of the
         holder of Series B Preferred Stock, the number of shares of Series B
         Preferred Stock tendered for purchase, and a statement that such holder
         is withdrawing his tendered shares of Series B Preferred Stock and his
         election to have such shares of Series B Preferred Stock purchased; and
         (vii) that holders whose shares of Series B Preferred Stock are being
         purchased only in part will be issued new shares of Series B Preferred
         Stock equal in number to the unpurchased portion of the shares of
         Series B Preferred Stock surrendered.


                  (c) On the Preferred Stock Change in Control Payment Date, the
         Company shall, to the extent permitted by law, (i) accept for payment
         all shares of Series B Preferred Stock properly tendered pursuant to
         the Preferred Stock Change in Control Offer, (ii) deposit with the
         transfer agent for the Series B Preferred Stock an amount in cash equal
         to the aggregate Preferred Stock Change in Control Payment in respect
         of all shares of Series B Preferred Stock so tendered and (iii)
         deliver, or cause to be delivered, to such transfer agent for
         cancellation the shares of Series B Preferred Stock so accepted. The
         Company shall promptly mail, or cause to be mailed, to each holder of
         Series B Preferred Stock the Preferred Stock Change in Control payment
         for such Series B Preferred Stock and new shares of Series B Preferred
         Stock equal in aggregate liquidation preference to any unpurchased
         portion of Series B Preferred Stock surrendered, if any. The Company
         may act as transfer agent for the Series B Preferred Stock.

                  (d) The Company shall mail the notice referred to in
         subsection (4)(b) above not later than 60 days after learning of a
         Preferred Stock Change in Control specified in clause (e)(1) or (2)
         below or not more than 60 days after an occurrence specified in clause
         (e)(3) or (4) (except to the extent the occurrence referred to in
         clause (e)(4) would otherwise have occurred under clause (e)(1) or (2)
         below) (such 60th day being the "Preferred Stock Notice Trigger Date").
         Prior to making a Preferred Stock Change in Control Offer, but in any
         event not later than the Preferred Stock Notice Trigger Date, the
         Company covenants to (i) repay in full all indebtedness under
         agreements containing change of control puts or defaults (and terminate
         all commitments thereunder) or offer to repay in full all such
         indebtedness (and terminate all commitments) and to repay the
         indebtedness owed to (and terminate the commitments of) each creditor
         which has accepted such offer, (ii) purchase any shares of Series A
         Preferred Stock tendered pursuant to change of control provisions
         governing the Series A Preferred Stock, or (iii) obtain the requisite
         consents in respect of such indebtedness of Series A Preferred Stock to
         permit the purchase of the Series B Preferred Stock. The Company will
         first comply with the covenant in the preceding sentence before it will
         be required to repurchase Series B Preferred Stock pursuant to the
         provisions described below; provided that the Company's failure to
         comply with the covenant described in the preceding sentence shall give
         rise to a Voting Period under subsection (7) below, without otherwise
         affecting the Company's obligations hereunder.

                  (e) The occurrence of any one or more of the following events
         will constitute a "Preferred Stock Change in Control":

                  (1) if Heartland Industrial Partners, L.P. and its Affiliates
         (as such term is defined under the Securities Exchange Act of 1934 (the
         "1934 Act"))(collectively "Heartland") (i) cease to directly or
         indirectly beneficially own 40% or more of the number of shares of
         common stock of the Company received by them in the merger
         (appropriately adjusted for stock splits, combinations, subdivisions,
         stock dividends and similar events) provided for


         under the Recapitalization Agreement dated as of August 1, 2000 between
         the Company and Riverside Company LLC (the "Recapitalization
         Agreement") (after taking account of any commitments or agreements in
         principle existing prior to such merger for Heartland to sell some of
         its shares of common stock of the Company following such merger) or
         (ii) do not have the right or ability by voting power, contract or
         otherwise to elect or designate for election a majority of the Board of
         Directors of the Company provided that the foregoing subclause (ii)
         will not be operative after any underwritten public offering of common
         stock of the Company;

                  (2) any person or group within the meaning of Section 13
         (d)(3) of the 1934 Act other than Heartland (an "other entity") shall
         attain beneficial ownership, within the meaning of Rule 13d-3 adopted
         under the 1934 Act, of capital stock representing a majority of the
         voting power for the election of the Directors of the Company;

                  (3) the Company, directly or indirectly, consolidates or
         merges with any other entity or sells, transfers, licenses or leases
         its properties and assets substantially as an entirety to any other
         entity, provided that this clause shall not apply to a transaction if,
         immediately following such transaction, no person or group, within the
         meaning of Section 13(d)(3) of the 1934 Act, other than Heartland,
         beneficially owns capital stock representing a majority of the voting
         power for the election of Directors of the Company; and

                  (4) any event constituting a "change of control" in the
         Company's Senior Credit Facilities. As used herein, "Senior Credit
         Facilities" means the Credit Agreement, dated as of November 28, 2000,
         among The Chase Manhattan Bank, Chase Securities Inc., the Company and
         certain of its subsidiaries and the other lenders and financial
         institutions party thereto from time to time, as the same may be
         amended, modified, waived, refinanced or replaced from time to time
         (whether under a new credit agreement or otherwise).

                  (5) QUALIFYING EQUITY. In the event of a Preferred Stock
         Equity Offering Triggering Event (as hereinafter defined), each holder
         of Series B Preferred Stock shall have the right to require that the
         Company purchase each such holder's Series B Preferred Stock, in whole
         or in part, out of Legally Available Funds at a cash purchase price (a
         "Preferred Stock Qualifying Equity Payment") in an amount equal to 100%
         of the then Series B Liquidation Preference plus accumulated and unpaid
         dividends, if any, to the date of purchase, but only to any Preferred
         Stock Excess Proceeds received by the Company from a Preferred Stock
         Equity Offering Triggering Event. As used herein, "Preferred Stock
         Equity Offering Triggering Event" means an underwritten public offering
         of common stock of the Company for gross proceeds to the Company of
         $200.0 million or more and to the extent that there are net proceeds to
         the Company in excess of (i) amounts required to finance any proposed
         or contemplated Acquisition (as hereinafter defined) as determined in
         good faith by the Board of Directors (such


         determination of the Board of Directors of the Company shall be
         conclusive), whether or not publicly announced, or refinance, refund or
         replace any debt or preferred stock incurred, issued or assumed in
         connection with any Acquisition or to refinance, refund or replace any
         debt of the Company or any of its subsidiaries, (ii) amounts required
         to refinance, refund, repay or make any other payments to the
         administrative agent for the benefit of the lenders under the Senior
         Credit Facilities and (iii) amounts required to be paid to holders of
         Series A Preferred Stock pursuant to its terms (any such excess
         proceeds are referred to as "Preferred Stock Excess Proceeds"). Once
         Preferred Stock Qualifying Equity Proceeds Offer(s) are made for
         amounts in aggregate sufficient to repurchase all outstanding shares of
         Series B Preferred Stock, no further Preferred Stock Qualifying Equity
         Proceeds Offer need be made for the Series B Preferred Stock.

                  Within 30 days following any Preferred Stock Equity Offering
         Triggering Event, the Company will mail a notice to each holder of
         Series B Preferred Stock, to the extent of any Preferred Stock Excess
         Proceeds, stating that it will make an offer (the "Preferred Stock
         Qualifying Equity Proceeds Offer") to purchase Preferred Stock with the
         following information: (i) a Preferred Stock Qualifying Equity Proceeds
         Offer is being made pursuant to this subsection (5), and that all
         Series B Preferred Stock properly tendered pursuant to such Preferred
         Stock Qualifying Equity Proceeds Offer will be accepted for payment on
         a pro rata basis (or as nearly a pro rata basis as practicable) to the
         extent of any Preferred Stock Excess Proceeds; (ii) the purchase price
         and the purchase date, which will be no earlier than 30 days nor later
         than 60 days from the date such notice is mailed, except as may be
         otherwise required by applicable law (the "Preferred Stock Qualifying
         Equity Payment Date"); (iii) any Series B Preferred Stock not properly
         tendered will remain outstanding and continue to accumulate dividends;
         (iv) unless the Company defaults in the payment of the Preferred Stock
         Qualifying Equity Payment, all Series B Preferred Stock accepted for
         payment pursuant to the Preferred Stock Qualifying Equity Proceeds
         Offer will cease to accumulate dividends on the date of payment in
         respect of such Preferred Stock Qualifying Equity Proceeds Offer; (v)
         holders of Series B Preferred Stock electing to have any shares of
         Series B Preferred Stock purchased pursuant to a Preferred Stock
         Qualifying Equity Proceeds Offer will be required to surrender such
         shares, properly endorsed for transfer, to the transfer agent for the
         Series B Preferred Stock at the address specified in the notice prior
         to the close of business on the third Business Day preceding the
         Preferred Stock Qualifying Equity Payment Date; (vi) holders of Series
         B Preferred Stock will be entitled to withdraw their tendered shares of
         Series B Preferred Stock and their election to require the Company to
         purchase such shares, provided that the transfer agent receives, not
         later than the close of business on the last day of the offer period, a
         telegram, telex, facsimile transmission or letter setting forth the
         name of the holder of the Series B Preferred Stock, the aggregate
         Liquidation Preference of Series B Preferred Stock tendered for
         purchase, and a statement that such holder is withdrawing his tendered
         shares of Series B Preferred Stock and his election to have such shares
         of Series B Preferred Stock purchased; and (vii) that holders


         whose shares of Series B Preferred Stock are being purchased only in
         part will be issued new shares of Series B Preferred Stock equal in
         number to the unpurchased portion of the shares of Series B Preferred
         Stock surrendered, which unpurchased portion must be in whole shares.

                  On the Preferred Stock Qualifying Equity Payment Date, the
         Company shall, to the extent permitted by law, (i) accept for payment
         all shares of Series B Preferred Stock properly tendered pursuant to
         the Preferred Stock Qualifying Equity Proceeds Offer on a pro rata
         basis as practicable) to the extent of any Preferred Stock Excess
         Proceeds, (ii) deposit with the transfer agent for the Series B
         Preferred Stock an amount in cash equal to the aggregate Preferred
         Stock Qualifying Equity Payment in respect of all shares of Series B
         Preferred Stock so tendered and (iii) deliver, or cause to be
         delivered, to such transfer agent for cancellation the shares of Series
         B Preferred Stock so accepted. The Company shall promptly mail, or
         cause to be mailed, to each holder of Series B Preferred Stock, the
         Preferred Stock Qualifying Equity Payment for such Series B Preferred
         Stock and new shares of Series B Preferred Stock equal in number to any
         unpurchased portion of Series B Preferred Stock surrendered, if any.
         The Company may act as transfer agent for the Series B Preferred Stock.

                  (6) PRIORITY OF SERIES B PREFERRED STOCK IN EVENT OF
         LIQUIDATION OR DISSOLUTION. In the event of any liquidation,
         dissolution, or winding up of the affairs of the Company, whether
         voluntary or otherwise, after payment or provision for payment of the
         debts and other liabilities of the Company and the payment in full of
         the Series A Preferred Stock and any other capital stock of the Company
         ranking senior in right of payment as to dividends or liquidation
         rights in (any such case, "Senior Stock"), the holders of the Series B
         Preferred Stock shall be entitled to receive, out of the remaining net
         assets of the Company for each share of Series B Preferred Stock, an
         amount of (1) one hundred dollars ($100.00) plus (2) all amounts added
         to the Series B Liquidation Preference on any Dividend Payment Date as
         provided in subsection (2) hereof. In addition, holders of Series B
         Preferred Stock will be entitled to an amount equal to all dividends
         accrued and unpaid on each such share up to the date fixed for
         distribution, before any distribution shall be made to the holders of
         the common stock or any other stock of the Company ranking (as to any
         such distribution) junior to the Series B Preferred Stock. In the event
         of any involuntary or voluntary liquidation, dissolution or winding up
         of the affairs of the Company, the Company by resolution of its Board
         of Directors shall, to the extent of any Legally Available Funds,
         declare a dividend on the Series B Preferred Stock payable before any
         distribution is made to any holder of any series of preferred stock or
         common stock or any other stock of the Company ranking junior to the
         Series B Preferred Stock as to liquidation, dissolution or winding up,
         in an amount equal to any accrued and unpaid dividends on the Series B
         Preferred Stock as of such date and if the Company does not have
         sufficient Legally Available Funds to declare and pay all dividends
         accrued at the time of such liquidation, any remaining accrued and
         unpaid dividends shall be added to


         the price to be received by the holders of the Series B Preferred Stock
         for such Series B Preferred Stock. If, upon any liquidation,
         dissolution or winding up of the Company, the assets distributable
         among the holders of any Parity Stock shall be insufficient to permit
         the payment in full to the holders of all such series of Preferred
         Stock of all preferential amounts payable to all such holders, then
         subject to subsection (2)(b), the entire assets of the Company thus
         distributable shall be distributed ratably among the holders of all
         Parity Stock in proportion to the respective amounts that would be
         payable per share if such assets were sufficient to permit payment in
         full. Except as otherwise provided in this subsection (6), holders of
         Series B Preferred Stock shall not be entitled to any distribution in
         the event of liquidation, dissolution, or winding up of the affairs of
         the Company.

         For the purposes of this subsection (6), neither the voluntary sale,
lease conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all the property or assets of the
Company, nor the consolidation or merger of the Company with one or more other
corporations, shall be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, unless such voluntary sale, lease, conveyance,
exchange or transfer shall be in connection with a plan of liquidation,
dissolution or winding up of the Company.

         (7) VOTING RIGHTS. (a) The holders of the Series B Preferred Stock
shall not, except as required by law or as otherwise set forth herein, have any
right or power to vote on any question or in any proceeding or to be represented
at, or to received notice of, any meeting of the Company's stockholders. On any
matters on which the holders of the Series B Preferred Stock shall be entitled
to vote, they shall be entitled to one vote for each share held.

         (b) In case at any time (i) the Company shall have failed to make a
mandatory redemption of shares of Series B Preferred Stock as set forth in
subsection (3) (a), or (ii) the Company shall have failed to comply with the
provisions in subsection (4) or (5) in any material respect, then during the
period (the "Preferred Stock Voting Period") commencing with such time and
ending with the time when (i) the Company shall have redeemed all shares of the
Series B Preferred Stock as set forth in subsection (3) (a), or (ii) the Company
shall have purchased any shares of Series B Preferred Stock validly tendered for
purchase under the provisions of subsection (4) or (5), in each case as
applicable, the remedy for such matters, without otherwise affecting the
Company's obligations, shall be that the number of members of the Board of
Directors shall automatically be increased by one and the holders of a majority
of the outstanding shares of Series B Preferred Stock represented in person or
by proxy at any meeting of the stockholders of the Company held for the election
of directors during the Voting Period shall be entitled as a class to the
exclusion of the holders of other classes of series of capital stock of the
Company, to collectively elect one director of the Company to fill the
directorship so created. The remaining directors shall be elected by the other
class or classes of stock entitled to vote therefor, at each meeting of
stockholders held for the purpose of electing directors.


         (c) At any time when the voting rights set forth in subsection (7) (b)
with respect to the election of directors shall have vested in the holders of
Series B Preferred Stock and if such right shall not already have been initially
exercised, a proper officer of the Company shall, upon the written request of
any holder of record of Series B Preferred Stock then outstanding, addressed to
the Secretary of the Company, call a special meeting of holders of Series B
Preferred Stock. Such meeting shall be held at the earliest practicable date
upon the notice required for annual meetings of stockholders at the place for
holding annual meetings of stockholders of the Company or, if none, at a place
designated by the Secretary of the Company. If such meeting shall not be called
by the proper officers of the Company within 30 days after the personal service
of such written request upon the Secretary of the Company, or within 30 days
after mailing the same within the United States, by registered mail, addressed
to the Secretary of the Company at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal authorities), then the
holders of record of 25% of the shares of Series B Preferred Stock then
outstanding may designate in writing a holder of Series B Preferred Stock to
call such meeting at the expense of the Company, and such meeting may be called
by such person so designated upon the notice required for annual meetings of
stockholders and shall be held at the same place as is elsewhere provided in
this subsection (7)(c). Any holder of Series B Preferred Stock which would be
entitled to vote at such meeting shall have access to the stock ledger books of
the Company for the purpose of causing a meeting of the stockholders to be
called pursuant to the provisions of this subsection (7)(c). Notwithstanding the
other provisions of this subsection (7)(c), however, no such special meeting
shall be called during a period within 60 days immediately preceding the date
fixed for the next annual meeting of stockholders.

         (d) At any meeting held for the purpose of electing directors at which
the holders of Series B Preferred Stock shall have the right to elect directors
as provided herein, the presence in person or by proxy of the holders of at
least one-third of the then outstanding shares of Series B Preferred Stock shall
be required and be sufficient to constitute a quorum of such class for the
election of directors by such class. At any such meeting or adjournment thereof
(i) the absence of a quorum of the holders of Series B Preferred Stock shall not
prevent the election of directors other than those to be elected by the holders
of stock of such class and the absence of a quorum or quorums of the holders of
capital stock entitled to elect such other directors shall not prevent the
election of directors to be elected by the holders of Series B Preferred stock
and (ii) in the absence of a quorum of the holders of any class of stock
entitled to vote for the election of directors, a majority of the holders
present in person or by proxy of such class shall have the power to adjourn the
meeting for the election of directors which the holders of such class are
entitled to elect, form time to time without notice (except as required by law)
other than announcement at the meeting, until a quorum shall be present.

         (e) Any director who shall have been elected by holders of Series B
Preferred Stock may be removed at any time during a Voting Period, either for or
without cause, by and only by the affirmative vote of the holders of record of a
majority of the outstanding shares of Series B Preferred Stock given at a
special meeting of such stockholders called


for such purpose, and any vacancy thereby created may be filled during such
Voting Period by the holders of Series B Preferred Stock present in person or
represented by proxy at such meeting. Any director elected by holders of Series
B Preferred Stock who dies, resigns or otherwise ceases to be a director shall
be replaced by the affirmative vote of the holders of record of a majority of
the outstanding shares of Series B Preferred Stock at a special meeting of
stockholders called for that purpose. At the end of the Voting Period, the
holders of Series B Preferred Stock shall be automatically divested of all
voting power vested in them under this subsection 7(e) but subject always to the
subsequent vesting hereunder of voting power in the holders of Series B
Preferred Stock if any subsequent event would again trigger a new Voting Period
under subsection 7(b). The term of all directors elected pursuant to the
provisions of this subsection 7(e) shall in all events expire at the end of the
Voting Period and upon such expiration the number of directors constituting the
Board of Directors shall, without further action, be reduced by one director,
subject always to the increase of the number of directors pursuant to subsection
7(b) hereof in case of the future right of the holders of Series B Preferred
Stock to elect directors as provided herein.

         (8)  CONVERSION. The Series B Preferred Stock shall not be convertible.

         (9)  LIMITATIONS. Except as expressly permitted by this subsection (9),
              the Company shall not and shall not permit any of its subsidiaries
              to (1) declare, pay or set apart for payment any dividend or make
              any distribution on, or directly or indirectly purchase, redeem or
              discharge any redemption, sinking fund or other similar obligation
              in respect of any other stock of the Company ranking on a parity
              with the Series B Preferred Stock as to dividends or liquidation
              rights (collectively, "Parity Stock"), or in respect of any
              warrants, rights or options exercisable for or convertible into
              any such Parity Stock or (2) declare, pay or set apart for payment
              any dividend or make any distributions on, or, directly or
              indirectly, purchase, redeem or satisfy any such mandatory
              redemption, sinking fund or other similar obligation in respect of
              any stock of the Company ranking junior to the Series B Preferred
              Stock as to dividends or liquidation rights (collectively, "Junior
              Stock"), or in respect of any warrants, rights or options
              exercisable for or convertible into any Junior Stock; provided,
              however, that (1) with respect to dividends and distributions,
              payments may be made or amounts set aside for payment of dividends
              on Parity Stock if either (x) it is made in accordance with
              subsection (2)(b) hereof or (y) prior to or concurrently with such
              payment or setting apart for payment, all accrued and unpaid
              dividends on shares of the Series B Preferred Stock not paid on
              the dates provided for in subsection (2) hereof shall have been or
              shall be paid and no Voting Period shall be in effect; (2) with
              respect to any purchase, redemption or retirement of Parity Stock,
              shares of Series B Preferred Stock shall be redeemed so that the
              number of shares of Series B Preferred Stock and Parity Stock so
              purchased or redeemed shall bear to each other the same ratio that
              the Series B Liquidation Preference and the liquidation preference
              of such Parity Stock shall bear to each other; (3) dividends and
              distributions may be made or set aside for


              payment in respect of any Junior Stock if the Company is not in
              arrears in the payment of dividends with respect to Series B
              Preferred stock and no Voting Period is in effect with respect to
              the Series B Preferred Stock. In addition, notwithstanding the
              foregoing, the Company will be permitted to (1) pay dividends and
              distributions in respect of capital stock in the form of Junior
              Stock and dividends and distributions in respect of Parity Stock
              in the form of Parity Stock; (2) pay dividends or make other
              distributions in respect of any capital stock if at the time of
              declaration of such dividend or distribution the Company could
              have made such payment in compliance with this subsection (9); (3)
              exchange or replace Junior Stock with other Junior Stock or Parity
              Stock with Parity Stock or Junior Stock; (4) make payments to
              redeem, repurchase or acquire for value Junior Stock or Parity
              Stock or options in respect thereof, in each case in connection
              with any repurchase, cash settlement, put or call provisions under
              employee stock option, management subscription, retained share or
              stock purchase agreements or other agreements to compensate
              employees, including in respect of restricted stock awards, as
              contemplated by the Recapitalization Agreement; and (5) redeem,
              purchase or acquire Junior Stock upon a change in control or an
              equity issuance following or at the time of satisfaction or waiver
              of the provisions contained in subsection (4) or (5) and in any
              indebtedness of the surviving company to such change of control.

                  (a) So long as any shares of the Series B Preferred Stock are
              outstanding and unless the vote or consent of the holders of a
              greater number of shares shall then be required by law, except as
              otherwise provided in the Company's Amended and Restated
              Certificate of Incorporation, the Company shall not amend its
              Amended and Restated Certificate of Incorporation without the
              approval, by vote or written consent, by the holders of at least a
              majority of the then outstanding shares of the Series B Preferred
              Stock if such amendment would amend any of the rights,
              preferences, privileges of or limitations provided for herein for
              the benefit of any share of Series B Preferred Stock so as to
              affect such holders adversely. Without limiting the generality of
              the preceding sentence, the Company will not amend its Amended and
              Restated Certificate of Incorporation without the approval by the
              holders of at least a majority of the then outstanding shares of
              Series B Preferred Stock if such amendment would:

                           (i) change the relative seniority rights of the
              holders of Series B Preferred Stock as to the payment of dividends
              in relation to the holders of any other capital stock of the
              Company;

                           (ii) reduce the amount payable to the holders of
              Series B Preferred Stock upon the voluntary or involuntary
              liquidation, dissolution or winding up of the Company, or change
              the relative seniority of the liquidation preference of the
              holders of Series B Preferred Stock to the rights upon


              liquidation of the holders of other capital stock of the Company,
              or change the dividend or redemption rights of the holders of
              Series B Preferred Stock;

                           (iii) cancel or modify the rights of the holders of
              the Series B Preferred Stock provided for in this subsection (9)
              or in subsection (3) through (7);

                           (iv) increase or decrease (other than by redemption
              or purchase and any subsequent filing in connection therewith) the
              authorized number of shares of Series B Preferred Stock; or

                           (v) subject to the following paragraph, allow for the
              issuance of Senior Stock.

              Notwithstanding the foregoing provisions, the designation or
authorization of any Senior Stock shall be permitted without a separate class
vote of the Series B Preferred Stock for the authorization of such equity
security, if such equity security is issued in connection with an investment by
the Company or any Subsidiary of the Company in (1) any other person pursuant to
which such person shall become a Subsidiary of the Company or any Subsidiary of
the Company, or shall be merged with or into the Company or any Subsidiary of
the Company, or (2) the assets of any person which constitute all or
substantially all of the assets of such person or comprises any division or line
of business of such person or any other properties or assets of such person
acquired outside of the ordinary course of business (either of subclauses (1)
and (2), an "Acquisition").

              (b) So long as any shares if the Series B Preferred Stock are
outstanding and unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of a majority
of all of the outstanding shares of Series B Preferred Stock (given in person or
by proxy, either by written consent pursuant to the Delaware General Corporation
Law or by a vote at a special meeting of stockholders called for such purpose or
at any annual meeting of stockholders, with the holders of Series B Preferred
Stock voting as a class and with each share of Series B Preferred Stock having
one vote) shall be required prior to the sale, lease or conveyance of all or
substantially all of the Company's assets or the merger or consolidation of the
Company with or into any other entity if as a result of such transaction the
Series B Preferred Stock would be cashed out at the closing of any such
transaction for less than 100% of its Series B Liquidation Preference plus any
accrued and unpaid dividends, or as a result of which the Series B Preferred
Stock would continue in existence (either as stock in the Company or in the
surviving company in a merger or in any parent company of the Company or such
surviving corporation) but with an adverse alteration in its specified
designations, rights, preferences or privileges.

              (c) Nothing herein contained shall be construed so as to require a
class vote or the consent of the holders of the outstanding shares of Series B
Preferred Stock (i) in connection with any increase in the total number of
authorized shares of common stock,


or (ii) in connection with the authorization or increase of any class or series
of Junior Stock or Parity Stock.

              The limitations stated above shall not apply if, at or prior to
the time when the distribution, payment, purchase, redemption, discharge,
conversion, exchange, amendment, alteration, repeal, issuance, sale, lease,
conveyance, merger or consolidation is to occur, as the case may be, provision
is made for the redemption or reacquisition of all shares of Series B Preferred
Stock at the time outstanding. Nothing herein contained shall in any way limit
the right and power, subject to the limitations set forth herein, of the Company
to issue the presently authorized but unissued shares of its capital stock, or
bonds, notes, mortgages, debentures, and other obligations, and to incur
indebtedness to banks and to other lenders.

              (10) RANKING OF PREFERRED STOCK. With regard to rights to receive
dividends, mandatory redemption payments and distributions upon liquidation,
dissolution or winding up of the Company, the Series B Preferred Stock shall
rank (i) junior to all Series A Preferred Stock outstanding at the time of
issuance of the Series B Preferred Stock, and (ii) prior to all other capital
stock of the Company outstanding at the time of issuance of the Series B
Preferred Stock. As contemplated by subsection (9), the Series B Preferred Stock
shall be subject to creation of Junior and Parity Stock and, pursuant to the
voting requirements of subsection (9), Senior Stock.

              IN WITNESS WHEREOF, Metaldyne Corporation has caused this
Certificate of Designations to be signed by its duly authorized officers on this
21st day of June, 2001.





                                            /s/ Timothy D. Leuliette
                                            ------------------------------------
                                            Name:  Timothy D. Leuliette
                                            Title: President


                                            /s/ R. Jeffrey Pollock
                                            ------------------------------------
                                            Name:  R. Jeffrey Pollock
                                            Title: Secretary

EX-10.3.1

                                                                   EXECUTED COPY


March 31, 2005

Mr. Jeffrey M. Stafeil
Executive Vice President
and Chief Financial Officer
Metaldyne Corporation
47603 Halyard Drive
Plymouth, Michigan 48170-2429

Re:  Commitment Letter

Gentlemen:

You have advised General Electric Capital Corporation ("GE Capital" or "Agent";
the terms "GE Capital" and "Agent" shall include any affiliate of GE Capital
designated by it to provide all or any portion of the facility described herein)
that Metaldyne Corporation (the "Company") is seeking (a) a seventh amendment
(the "Seventh Amendment") of its existing accounts receivable securitization
facility (the "Existing Facility"), (b) an extension of the Existing Facility
and an increase of the maximum financing available under the Existing Facility
to $175 million (the "Extension") and (c) a replacement accounts receivable
securitization facility providing financing with availability in an amount up to
$225 million (the "New Facility", together with the Seventh Amendment and the
Extension, the "Facilities"), the proceeds of which New Facility would be used
to refinance the Existing Facility and to provide for ongoing accounts
receivable financing and to pay fees and expenses associated with the New
Facility (the transactions contemplated by the New Facility, the "Transaction").

Based on our understanding of the transactions as described above, the
information provided to date and subject to the terms and conditions herein, GE
Capital is pleased to offer its commitments to (a) take an assignment of the
Existing Facility and agree to the Seventh Amendment, (b) grant the Extension
and (c) provide the New Facility described in this commitment letter (the
"Commitment Letter").

As part of your review of this Commitment Letter, you should be aware that it is
critical that both the Company and its external counsel conclude that the terms
of the Transaction described below, which include, among other things, the
Originators' (as defined below) sale, transfer and assignment of receivables and
related security, the Originators' grant of a security interest with respect to
such receivables and related security, the incurrence of additional obligations
by the Originators and their affiliates, and the purchase of an undivided
percentage ownership interest in accounts receivable by GE Capital from a
special purpose subsidiary of the Company, do not conflict with any existing
loan agreement, security agreement, bond indenture or any supplement thereto or
any other material agreement to which the Company or any of its affiliates is a
party. In addition, and without limitation, we wish to note that (i) a customary
opinion of your external counsel to the effect that the terms of the Transaction
do not conflict with material loan agreements, security agreements, bond
indentures or any supplements thereto, in each case, to which the Originators or
any of their affiliates party to the Transaction is a party (which agreements
may be specified in an opinion from internal counsel to the Company) and (ii)
such


                                       1


other opinions standard for a securitization of this type, in each case in form
and substance acceptable to GE Capital and its counsel, shall be required in
order to close the Transaction.


                            SUMMARY OF PROPOSED TERMS

            --------------------------------------------------------


                    I. SEVENTH AMENDMENT TO EXISTING FACILITY

MATURITY OF SEVENTH
AMENDMENT:                          January 1, 2007.

PURCHASE OF EXISTING
COMMITMENTS AND NET
INVESTMENTS:                        Pursuant to Transfer Supplements with the
                                    existing Committed and Conduit Purchaser, GE
                                    Capital will purchase and assume all
                                    Commitments and all outstanding Net
                                    Investments under the Receivables Transfer
                                    Agreement, dated as of November 28, 2000, as
                                    heretofore amended (the "Existing RTA"; all
                                    capitalized terms used in Parts I and II of
                                    this Commitment Letter shall have the
                                    meanings assigned to such terms in the
                                    Existing RTA if not otherwise defined
                                    herein). Such purchase shall be made at par
                                    value. The Transfer Supplements will also be
                                    signed and consented to by the Company,
                                    MTSPC, Inc. ("MTSPC") and JPMorgan Chase
                                    Bank, as existing Administrative Agent.

TRANSFER OF
ADMINISTRATIVE AGENCY:              Pursuant to a Seventh Amendment to the
                                    Existing RTA, the existing Administrative
                                    Agent will resign and GE Capital will
                                    appoint itself as the replacement
                                    Administrative Agent. GE Capital will review
                                    the agency provisions of the Existing RTA
                                    and consider whether any amendments thereto
                                    are necessary to conform to GE Capital
                                    institutional requirements; however, no
                                    substantive impact on MTSPC is expected. The
                                    Company, as limited guarantor, will
                                    acknowledge and agree to succession of GE
                                    Capital as Administrative Agent.

ADDITIONAL AMENDMENTS
TO RECEIVABLES TRANSFER


                                       2


AGREEMENT:                          As part of the Seventh Amendment, the
                                    Existing Facility shall be further amended
                                    in accordance with the terms and conditions
                                    of the copy of the March 22, 2005 draft of
                                    Amendment No. 7 to the Existing Facility
                                    attached as Exhibit A hereto (with the
                                    exception of the revised maturity date)
                                    (collectively, the "Additional Amendments");
                                    provided that the Additional Amendments
                                    shall cease to be effective on the 60th day
                                    after the effective date of the Seventh
                                    Amendment unless on or before such date the
                                    Agent has entered into an intercreditor
                                    agreement (in form and substance
                                    satisfactory to Agent) with JPMorgan Chase
                                    Bank, as administrative agent under the
                                    Company's senior credit agreement (the
                                    "Lender Agent").

AMENDMENT TO
RECEIVABLES
PURCHASE AGREEMENT:                 Any direct references to JPMorgan Chase Bank
                                    in the Receivables Purchase Agreement will
                                    be replaced with references to GE Capital.

AMENDMENT TO LOCKBOX
AGREEMENTS, CURRENCY
HEDGING ARRANGEMENTS,
CREDIT DEFAULT SWAPS
AND UCC FINANCING
STATEMENTS:                         Existing lockbox providers will execute
                                    consents to assignments of the Lockbox
                                    Agreements to GE Capital as the replacement
                                    Administrative Agent; existing currency
                                    hedge providers and credit default swap
                                    issuers will execute consents to assignments
                                    of any currency hedge agreements and credit
                                    default swaps to GE Capital as the
                                    replacement Administrative Agent; and the
                                    UCC-1 Financing Statements filed by the
                                    existing Administrative Agent against the
                                    Originators and MTSPC will need to be
                                    amended to reflect their


                                       3


                                    assignment to GE Capital as replacement
                                    Administrative Agent.

LIEN SEARCHES:                      Lien searches to be performed and results to
                                    confirm no existence of adverse claims on
                                    the transferred Receivables and the
                                    collateral granted pursuant to Section 10.10
                                    of the RTA.

CERTIFIED
DOCUMENTATION:                      MTSPC will certify and provide GE Capital
                                    with copies of all existing documentation of
                                    the Existing Facility so that GE Capital can
                                    confirm whether any other matters necessary
                                    to facilitate the Seventh Amendment or the
                                    Extension are necessary.


SEVENTH AMENDMENT
CLOSING FEE
AND ADMINISTRATIVE FEE:             Set forth in the Fee Letter of even date
                                    between GE Capital and the Company (the "Fee
                                    Letter").

CLOSING:                            Closing of the Seventh Amendment is
                                    conditioned upon satisfaction of each of the
                                    following: (a) no Termination Event or
                                    Potential Termination Event shall have
                                    occurred and be continuing, (b) the
                                    above-stated fees shall have been paid, (c)
                                    the above-described matters shall have been
                                    completed, (d) GE Capital has received
                                    reliance letters in form and substance
                                    reasonably satisfactory to GE Capital
                                    permitting GE Capital to rely on the legal
                                    opinions originally delivered in connection
                                    with the closing of the Existing Facility by
                                    (i) Cahill Gordon & Reindel LLP and (ii)
                                    other external counsel to any Originators
                                    that are parties to the Existing Facility on
                                    the date of the Extension, except in the
                                    case of (ii) to the extent that any such
                                    original opinion contains reliance language
                                    that is reasonably satisfactory to the Agent
                                    and its counsel, (e) the representations and
                                    warranties set forth in Section 3.01 of the
                                    Existing RTA shall be true and correct as of
                                    the closing date of the Seventh Amendment,
                                    and (f) Agent shall received satisfactory
                                    cash dominion and lock-box arrangements,
                                    including without limitation deposit account
                                    control agreements satisfactory to Agent
                                    (but until the New Facility is effective and
                                    provided that no Termination Event or
                                    Potential Termination Event is then in
                                    existence, Agent shall return to MTSPC on
                                    each business day the cash swept to Agent
                                    that day as a result of such cash dominion).
                                    The closing of the Seventh Amendment shall
                                    also be subject to the execution and
                                    delivery of final legal documentation with
                                    respect to the Seventh Amendment acceptable
                                    to GE


                                       4


                                    Capital and its counsel consistent with the
                                    terms set forth in this Commitment Letter.

ASSIGNMENTS:                        GE Capital intends to assign and syndicate a
                                    portion of the Commitments with respect to
                                    the Existing Facility as amended through the
                                    Seventh Amendment pursuant to the terms and
                                    conditions described in the Fee Letter.

            --------------------------------------------------------

                       II. EXTENSION OF EXISTING FACILITY

MATURITY OF EXTENSION:              January 1, 2007.

MAXIMUM COMMITMENT:                 One hundred seventy-five million dollars
                                    ($175,000,000).

REVISED PRICING:                    LIBOR Reference Rate plus (a) 1.75% plus (b)
                                    on and after the 90th day after the closing
                                    of the Extension, 0.25%, plus (c) on and
                                    after the 180th day following the closing of
                                    the Extension, an additional 0.25%. The
                                    LIBOR Reference Rate shall be established as
                                    the 30-day LIBOR Rate applicable on the
                                    first business day of each calendar month
                                    (determined by reference to the Telerate
                                    Service).

AMENDMENTS TO
RECEIVABLES TRANSFER
AGREEMENT:                          The Existing RTA as amended through the
                                    Seventh Amendment will be further amended to
                                    (a) modify the advance rates applicable to
                                    the Receivables based on the criteria set
                                    forth below in "Section III - New Facility,"
                                    except that 75% will be the maximum
                                    percentage in the Dynamic Advance Rate (as
                                    defined below), (b) incorporate new
                                    eligibility criteria based on the criteria
                                    set forth below in "Section III - New
                                    Facility", (c) add a representation and
                                    warranty to Section 3.01 of the Existing RTA
                                    regarding the absence of a material adverse
                                    effect on MTSPC since its creation, (d)
                                    apply the concentration limits set forth in
                                    Exhibit B hereto, (e) incorporate the new
                                    portfolio reporting requirements set forth
                                    below in "Section III - New Facility" and
                                    (f) reflect other modifications acceptable
                                    to the Agent.


                                       5


CLOSING:                            Closing of the Extension is conditioned upon
                                    satisfaction of each of the following: (a)
                                    Agent shall have entered into the aforesaid
                                    intercreditor agreement with the Lender
                                    Agent, (b) no Termination Event or Potential
                                    Termination Event shall have occurred and be
                                    continuing, and (c) the representations and
                                    warranties set forth in Section 3.01 of the
                                    Existing RTA shall be true and correct as of
                                    the closing date of the Extension, The
                                    closing of the Extension shall also be
                                    subject to the execution and delivery of
                                    final legal documentation acceptable to GE
                                    Capital and its counsel consistent with the
                                    terms set forth in this Commitment Letter.

ASSIGNMENTS:                        GE Capital intends to assign and syndicate a
                                    portion of the Commitments with respect to
                                    the Extension pursuant to the terms and
                                    conditions described in the Fee Letter.


                                       6


            --------------------------------------------------------

                                III. NEW FACILITY

TRANSACTION OVERVIEW:               Trade receivables securitization facility
                                    pursuant to which the Purchasers will
                                    acquire an undivided percentage ownership
                                    interest ("Purchaser Interest") in
                                    Receivables owned or generated by the
                                    Originators and transferred to the Seller.
                                    Following the initial purchase, the Seller
                                    would automatically acquire a 100% interest
                                    in all newly generated Receivables of the
                                    Originators. Purchases of the Purchaser
                                    Interest shall be made by cash payments to
                                    the Seller.

TRANSACTION PARTIES:

ORIGINATORS:                        The "Originators" (as defined in the
                                    Existing Facility) and other subsidiaries of
                                    the Company approved by Agent (as defined
                                    below) following satisfactory completion of
                                    all business and legal due diligence with
                                    respect thereto and receipt of satisfactory
                                    results of an audit with respect to such
                                    other subsidiary and completion of the same
                                    conditions precedent as required for the
                                    addition of a "Seller" under and as defined
                                    in the Existing Facility (individually, an
                                    "Originator" and collectively, the
                                    "Originators").

SELLER:                             MTSPC or a newly-formed, special purpose
                                    bankruptcy-remote limited liability company
                                    that is wholly-owned by the Originators and
                                    a special purpose corporation that is a
                                    bankruptcy-remote subsidiary of any
                                    Originator ("SPE Member"), which Seller will
                                    acquire Receivables from each Originator via
                                    true sale pursuant to a Receivables Sale and
                                    Contribution Agreement (the "Sales
                                    Agreement").

PURCHASERS:                         GE Capital and other acceptable
                                    co-purchasers to be determined pursuant to
                                    syndication of the New Facility, and, so
                                    long as a Termination Event has not occurred
                                    nor is continuing, subject to the consent of
                                    Seller (not to be unreasonably withheld or
                                    delayed).

SERVICER:                           Company, as "Master Servicer", through its
                                    operating subsidiaries and affiliates as
                                    Sub-Servicers (collectively, the
                                    "Servicers") will continue to perform all
                                    servicing and administration of the
                                    receivables portfolio in accordance with its
                                    normal practices, adhering to the Company's
                                    established credit and collection policies.
                                    The Servicers will also perform all
                                    collection duties relating to the
                                    Receivables. Pursuant to certain


                                       7


                                    conditions under a Servicer Termination
                                    Event, the Agent will reserve the right to
                                    replace any Servicer in any or all of these
                                    roles.

ADMINISTRATIVE
AGENT ("AGENT"):                    General Electric Capital Corporation or one
                                    of its affiliates.

LEAD ARRANGER/ LEAD BOOKRUNNER:     GECC Capital Markets Group, Inc. ("GECMG"),
                                    and GECMG will collaborate with the Company
                                    regarding designation of other arrangers and
                                    bookrunners, if any.

TRANSACTION PARAMETERS:

TERM:                               The New Facility shall expire on the
                                    earliest to occur of:

                                    a)    Sixty (60) months after the closing of
                                          the Transaction (the "Closing Date");

                                    b)    Sixty-Three (63) months after the
                                          closing of the Seventh Amendment; and

                                    c)    The occurrence of a Termination Event.

MAXIMUM COMMITMENT:                 Two hundred twenty-five million dollars
                                    ($225,000,000).

RECEIVABLES:                        Indebtedness of any person ("Obligor")
                                    arising from the sale of goods or provision
                                    of services under contract by the Company or
                                    any other Originator and any security or
                                    supporting obligations related thereto.

CAPITAL:                            The sum of cash paid to the Seller by the
                                    Purchasers for the ownership interest in the
                                    Receivables, as reduced from time to time by
                                    Receivables collections.

                                    The maximum amount of Capital available to
                                    be paid to the Seller at any time shall
                                    equal the lesser of (a) the Maximum
                                    Commitment, and (b) an amount equal to the
                                    positive difference, if any, of: (i) the
                                    product of (1) the Dynamic Advance Rate
                                    multiplied by (2) the Net Receivables
                                    Balance, minus (ii) an amount equal to the
                                    Availability Block (as defined below), minus
                                    (iii) if the "Credit Memo Lag" (as defined
                                    in a manner acceptable to the parties) is
                                    greater than a number of days to be
                                    determined, a reserve amount calculated by a
                                    formula to be determined, minus (iv) the
                                    lesser of (X) such other reserves as the
                                    Agent (using its reasonable credit judgment
                                    and based on information regarding the
                                    Company, the Originators, the Seller, the
                                    Obligors or the Receivables, whether as a
                                    result of an audit or


                                       8


                                    otherwise) may from time to time specify to
                                    the Seller and the Company, which reserves
                                    shall be determined as a percentage of the
                                    Net Receivables Balance (and which reserves
                                    shall include, without limitation, reserves
                                    with respect to servicing fees and discount
                                    that would be instituted upon the occurrence
                                    and during the continuance of any
                                    Termination Event or incipient Termination
                                    Event) and (Y) so long as no Termination
                                    Event or prospective Termination Event shall
                                    have occurred and be continuing, 5.0% of the
                                    Net Receivables Balance. The "Availability
                                    Block" shall equal $5 million less an
                                    amount, if any, by which clause (i) minus
                                    clauses (iii) and (iv) exceeds the Maximum
                                    Commitment.

TRANSFER PRICE OF RECEIVABLES:      Receivables will be sold by the Originators
                                    under the Sales Agreement in true sales to
                                    the Seller at a price to be determined by
                                    the Originators and the Seller.

NET RECEIVABLES BALANCE:            The difference of the aggregate outstanding
                                    of all Eligible Receivables minus (a)
                                    amounts in excess of the Concentration
                                    Limits, and minus (b) unapplied cash and
                                    credits.

DYNAMIC ADVANCE RATE:               At any time, the lesser of (i) 85% and (ii)
                                    a percentage equal to 100% minus the sum of
                                    (A) 2 times the Monthly Dilution Ratio as of
                                    such date plus (B) 5%.

DILUTION FACTORS:                   The portion of any Receivable which (a) was
                                    reduced or canceled as a result of (i) any
                                    defective, rejected or returned merchandise
                                    or services, or any failure by any
                                    Originator to deliver any merchandise or
                                    services or otherwise perform under the
                                    underlying contract or invoice, (ii) any
                                    change in or cancellation of any of the
                                    terms of such contract or invoice or any
                                    cash discount, rebate, retroactive price
                                    adjustment or any other adjustment by the
                                    Originators which reduces the amount payable
                                    by the Obligor on the related Receivable,
                                    (iii) any written-off amounts or (iv) any
                                    setoff in respect of any claim by the
                                    Obligor thereof (whether such claim arises
                                    out of the same or a related transaction or
                                    an unrelated transaction) or (b) is subject
                                    to any specific dispute, offset,
                                    counterclaim or defense whatsoever.

MONTHLY DILUTION RATIO:             As of the date of any determination, the
                                    quotient of: (a) the aggregate Dilution
                                    Factors for all Receivables during the month
                                    most recently ended divided by (b) the
                                    aggregate billed amount of all Receivables
                                    originated during the month that is two
                                    months prior to the most recently ended
                                    month.

CONCENTRATION LIMIT:                See Exhibit B attached hereto.


                                       9


ELIGIBLE RECEIVABLES:               To be included in Eligible Receivables, each
                                    Receivable and its related Obligor must meet
                                    certain eligibility criteria including, but
                                    not limited to, those listed below.

                                    a)    Receivables must be generated solely
                                          by one of the Originators in the
                                          ordinary course of business;

                                    b)    Receivables must be owned by Seller
                                          and transferred to the Purchasers free
                                          of claims, security interests or other
                                          encumbrances and not subject to
                                          recission, counterclaims, defenses or
                                          offset;

                                    c)    Receivables must satisfy all
                                          applicable requirements of the
                                          Originators' credit and collection
                                          policies which must be acceptable to
                                          the Agent;

                                    d)    A Receivable that is (i) unpaid for
                                          more than 120 days past its invoice
                                          date, or (ii) the Obligor of which is
                                          in a bankruptcy or similar proceeding,
                                          or (iii) which consistent with the
                                          Originators' Credit and Collection
                                          Policy has been or should be written
                                          off as uncollectible (each of the
                                          foregoing, a "Defaulted Receivable")
                                          will be ineligible;

                                    e)    Receivables owed by Obligors with more
                                          than 25% of its Receivables classified
                                          as Defaulted Receivables at any time
                                          will be ineligible;

                                    f)    No obligor may be a government entity,
                                          unless it is the U.S. Government and
                                          the Receivables have been assigned in
                                          accordance with the Federal Assignment
                                          of Claims Act and otherwise acceptable
                                          to the Agent;

                                    g)    Receivables must be payable in U.S.
                                          dollars and due from Obligors
                                          domiciled in the U.S., except that (i)
                                          Receivables owing by Obligors
                                          domiciled in Canada will be considered
                                          eligible to the extent that such
                                          Receivables do not exceed in the
                                          aggregate 20% of the Net Receivables
                                          Balance and (ii) Receivables payable
                                          in Canadian dollars will be considered
                                          eligible to the extent that the
                                          Transferor has entered into currency
                                          hedge agreements in form, substance
                                          and notional amounts acceptable to
                                          Agent and complied with other
                                          conditions to be set forth in the
                                          Financing documentation;

                                    h)    Any "Tooling Receivable" (defined
                                          below) must be subject to an
                                          Obligor-approved Production Part
                                          Approval Process (P-PAP) document; as
                                          used herein, "Tooling Receivable"
                                          means an obligation of


                                       10


                                          an Obligor to pay for (i) tooling or
                                          equipment purchased or built by an
                                          Originator for the purpose of
                                          manufacturing products for such
                                          Obligor or (ii) services rendered in
                                          connection with building tooling for
                                          the purposes of manufacturing products
                                          for such Obligor.

                                    i)    Receivables may not be from an
                                          affiliate of any Originator or the
                                          Seller;

                                    j)    Receivables may not arise with respect
                                          to goods delivered on a "bill and
                                          hold" basis, consigned goods,
                                          unperformed services, "billed but not
                                          yet shipped" goods, "sale or return"
                                          goods or "progress billed" goods;

                                    k)    An invoice and all other necessary
                                          documentation must have been issued
                                          with respect to such Receivables, and
                                          the Originator thereof has fulfilled
                                          all of its obligations in respect
                                          thereof;

                                    l)    A portion of any Receivable will not
                                          be eligible to the extent there is a
                                          warranty reserve arising from a
                                          contractual warranty obligation with
                                          respect to such Receivable;

                                    m)    Receivables may not be subject to or
                                          evidenced by debit memos, except to
                                          the extent that (i) such Receivables
                                          relate to Tooling Receivables,
                                          prototype inventory or steel
                                          surcharges, (ii) the aggregate amount
                                          of such Receivables relating to
                                          Tooling Receivables, prototype
                                          inventory or steel surcharges does not
                                          exceed $10,000,000 at any time and
                                          (iii) such Receivables relating to
                                          Tooling Receivables, prototype
                                          inventory or steel surcharges will
                                          become ineligible if the Seller does
                                          not provide reporting of the debit
                                          memos relating to such Receivables in
                                          form and substance satisfactory to
                                          Agent during any collateral audit; and

                                    n)    Receivables that are from time to time
                                          indicated on the Transferor's records
                                          as "miscellaneous" accounts receivable
                                          will not be eligible.

                                    The criteria listed above are subject to
                                    further amplification and modification after
                                    review of the Receivables portfolio.

OWNERSHIP INTEREST/COLLATERAL:      The Originators and Seller will authorize
                                    the filing of UCC financing statements to
                                    perfect and evidence the interests of the
                                    Seller and the Purchased Interest in the


                                       11


                                    Receivables and related assets, including
                                    but not limited to, contracts evidencing the
                                    Receivables, any collateral, supporting
                                    obligations, credit default swaps with
                                    respect to the Receivables or other
                                    enhancements securing the Receivables, bank
                                    accounts, books and records (collectively,
                                    the "Collateral").

                                    All Collateral will be free and clear of
                                    other liens, claims, and encumbrances,
                                    except for permitted liens and encumbrances
                                    acceptable to Agent.

FEES AND EXPENSES:

COMMITMENT FEE AND
ADMINISTRATIVE FEE:                 Set forth in the Fee Letter

UNUSED FEE:                         Monthly unused fee in an amount equal to 50
                                    basis points per annum on the difference
                                    between average daily Capital and the
                                    Maximum Commitment.

APPLICABLE RATE:                    LIBOR Reference Rate plus 2.25% (the
                                    "Applicable Margin"). The LIBOR Reference
                                    Rate shall be established as the 30-day
                                    LIBOR Rate applicable on the first business
                                    day of each calendar month (determined by
                                    reference to the Telerate Service). The
                                    pricing in the Existing Facility for
                                    "Conduit Purchasers" (as defined therein)
                                    shall be applicable to Purchasers that are
                                    conduits.

DEFAULT YIELD RATE:                 Following a Termination Event, the Default
                                    Yield Rate shall apply, which is the
                                    Applicable Rate plus 2.0% per annum.

OTHER TERMS:

PORTFOLIO REPORTING:                Daily Report: On each day on which the
                                    Seller proposes to sell Receivables to the
                                    Purchasers, by 11:00 am, New York time, the
                                    Master Servicer will deliver to the Agent a
                                    report in form and substance satisfactory to
                                    the Agent summarizing the Receivables
                                    activity for the preceding day (the "Daily
                                    Report"). This report will include a
                                    computation of the Dynamic Advance Rate
                                    based on the Reserve levels determined as of
                                    the prior Month End Report (as defined
                                    below). This report will utilize ineligibles
                                    and reserves calculated on the most recent
                                    Weekly Report (as defined below).

                                    Weekly Report: On the third business day of
                                    each week the Master Servicer will deliver
                                    to the Agent a report in form and substance
                                    satisfactory to the Agent summarizing the
                                    Receivables activity for the preceding


                                       12


                                    weekly period as of the end of the prior
                                    week (the "Weekly Report"); provided,
                                    however, that the Master Servicer will be
                                    required to deliver the Weekly Report only
                                    on the 15th and last day of each month if
                                    and for so long as the Company provides
                                    evidence satisfactory to the Agent that the
                                    Company has borrowing availability of not
                                    less than $30,000,000 under the Company's
                                    senior revolving credit facility at any time
                                    (and in the case of any such transition from
                                    weekly to bi-monthly reporting, the delivery
                                    of the initial bi-monthly Weekly Report
                                    shall not be required if such delivery would
                                    have occurred less than one week after the
                                    delivery of the most recent Weekly Report
                                    prior to such transition). The Weekly Report
                                    will include agings, roll-forwards,
                                    ineligibles and reserve levels.

                                    Monthly Report: The Master Servicer will
                                    deliver to the Agent a monthly report in
                                    form and substance satisfactory to the Agent
                                    summarizing the Receivables portfolio
                                    activity for the preceding period as of the
                                    end of each calendar month no later than the
                                    15th day of the calendar month following
                                    such calendar month end (the "Month End
                                    Report"). The Month End Report will include
                                    agings, roll-forwards, ineligibles and the
                                    computations to determine the Dynamic
                                    Advance Rate and reserve levels.

SYNDICATION:                        The New Facility will be syndicated in
                                    accordance with the Fee Letter.

CONDITIONS PRECEDENT:               The New Facility would be subject to
                                    conditions precedent typical for a
                                    transaction of this kind and would include,
                                    but not be limited to, the following:

                                    a)    Completion of due diligence, legal
                                          review and audit satisfactory to the
                                          Agent of the Receivables and of the
                                          Seller's and the Originators'
                                          operations and operating locations;

                                    b)    Termination of the Existing Facility
                                          and delivery of release and
                                          reconveyance documents and payoff
                                          agreements with respect thereto;

                                    c)    Receipt of customary opinions
                                          (containing customary exceptions and
                                          qualifications) for a transaction of
                                          this nature from (1) Company's general
                                          counsel that are satisfactory to the
                                          Agent that address, among other
                                          things, no conflicts with material
                                          agreements (other than to the extent
                                          opined on by Company's outside
                                          counsel), and (2)


                                       13


                                          Company's outside counsel that are
                                          satisfactory to the Agent that
                                          address, among other things:

                                          i)    true sale;

                                          ii)   non-consolidation of assets;

                                          iii)  no conflicts with other material
                                                debt agreements, laws or
                                                organizational documents;

                                          iv)   perfection; and,

                                          v)    corporate and enforceability
                                                matters and other opinions
                                                customary for transactions of
                                                this type;

                                    d)    Corporate structure, capital
                                          structure, other debt instruments,
                                          material contracts, and governing
                                          documents of the Seller, SPE Member,
                                          the Originators and their affiliates
                                          to be acceptable to the Agent;

                                    e)    Satisfactory cash dominion and
                                          lock-box arrangements, including
                                          without limitation deposit account
                                          control agreements satisfactory to
                                          Agent;

                                    f)    The Agent shall have entered into an
                                          intercreditor agreement (in form and
                                          substance satisfactory to Agent) with
                                          the Lender Agent;

                                    g)    Since the date hereof, no change in
                                          financial or capital market conditions
                                          generally that in the reasonable
                                          judgment of the Agent would have a
                                          material adverse effect on the Agent;
                                          and

                                    h)    Acceptable final documentation.

REPRESENTATIONS AND WARRANTIES:     The Originators, SPE Member, the Servicer
                                    and the Seller would make various
                                    representations and warranties customary for
                                    a transaction of this kind, including, but
                                    not limited to, (a) representations
                                    regarding the Receivables sold at the time
                                    of each sale of Receivables, and (b) such
                                    other representations and warranties as
                                    determined by the Agent following completion
                                    of legal due diligence.

COVENANTS:                          Standard and customary affirmative and
                                    negative covenants for a transaction of this
                                    type will be required of the Seller, SPE
                                    Member, Servicers and Originators.

SERVICER TERMINATION EVENTS:        The Agent shall have the right but not the
                                    obligation to replace any Servicer upon the
                                    occurrence of a Servicer Termination Event.
                                    Such Servicer Termination Events will be
                                    determined following due diligence.


                                       14


TERMINATION EVENTS:                 Should any of the following events (each a
                                    "Termination Event") occur, all new
                                    purchases under the Receivables Purchase and
                                    Service Agreement may, at the Required
                                    Purchasers' (definition to be determined)
                                    discretion, cease and outstandings would
                                    liquidate as receivables are collected. Such
                                    Termination Events will include, but not be
                                    limited to, the following:

                                    a)    The insolvency or the voluntary or
                                          involuntary filing for bankruptcy in
                                          respect of the Seller, SPE Member or
                                          any Originator;

                                    b)    The date that is 90 days prior to the
                                          stated expiration date of any of the
                                          Company's revolving credit facilities;

                                    c)    Violation, default, or breach by the
                                          Seller, the Company or any Originator
                                          of any of its covenants or agreements
                                          in any of the Transaction documents,
                                          including covenants as to the status
                                          of the Seller as "bankruptcy-remote"
                                          and the non-consolidation of the
                                          Seller and the Originators;

                                    d)    Payment default (after giving effect
                                          to any grace period) of any
                                          indebtedness (in excess of a threshold
                                          amount to be determined and excluding
                                          current trade debt) of any Originator
                                          or any affiliate of an Originator or
                                          any other default (after giving effect
                                          to any grace period) of such
                                          Indebtedness that would permit or has
                                          caused acceleration thereof;

                                    e)    Failure of the Agent to hold a fully
                                          perfected first priority security
                                          interest in the Collateral;

                                    f)    Failure to maintain receivable
                                          performance within certain targets to
                                          be mutually agreed upon;

                                    g)    A Servicer Termination Event shall
                                          have occurred;

                                    h)    The Company or any of its Subsidiaries
                                          shall default in the observance or
                                          performance of any of the financial
                                          covenants set forth in Sections 6.13
                                          through 6.16 of the Company's senior
                                          credit agreement (as in effect on this
                                          date and as the same may be hereafter
                                          amended, supplemented or restated); or

                                    i)    Such other Termination Events as
                                          determined by the Agent through due
                                          diligence.


                                       15


INDEMNITIES:                        The Seller and the Originators would provide
                                    standard and customary indemnities for a
                                    transaction of this type.

GOVERNING LAW:                      New York


            --------------------------------------------------------


                                       16


GE Capital's commitment hereunder with respect to the New Facility is subject to
the completion by GE Capital, its agents and its counsel of a collateral audit
and other due diligence with respect to the Company and its affiliates and their
respective Receivables with results satisfactory to GE Capital.

By signing this Commitment Letter, each party hereto acknowledges that this
Commitment Letter and the Fee Letter supersedes any and all discussions and
understandings, written or oral, between or among GE Capital and any other
person as to the subject matter hereof, including without limitation, any prior
commitment letters, the "work letter" dated January 28, 2005 and any draft
letters between GE Capital and the Company (collectively, the "Prior Letters").
No amendments, waivers or modifications of this Commitment Letter or any of its
contents shall be effective unless expressly set forth in writing and executed
by the parties hereto.

This Commitment Letter is being provided to you on the condition that except as
required by law (including without limitation any rule or regulation of the
Securities and Exchange Commission), neither it, the Fee Letter, the Prior
Letters nor their contents will be disclosed publicly or privately except to
those individuals who are your officers, directors, employees, auditors,
lawyers, or advisors who have a need to know as a result of being involved in
the Facilities and then only on the condition that such matters may not be
further disclosed. No one shall, except as required by law, use the name of, or
refer to, GE Capital, or any of its affiliates, in any correspondence,
discussions, advertisement or disclosure made in connection with the Facilities
without the prior consent of GE Capital. No person, other than the parties
signatory hereto, is entitled to rely upon this Commitment Letter or any of its
contents.

Regardless of whether the commitments herein are terminated or either Facility
closes, the Company agrees to pay upon demand to GE Capital all reasonable
out-of-pocket expenses (including all reasonable costs and fees of legal,
auditing and other consultants) incurred in connection with this Commitment
Letter, the Fee Letter, the Prior Letters, and evaluation, documentation and
negotiation of the Facility and the Transaction, and a field examination fee at
market rates plus actual out-of-pocket expenses in connection with the conduct
of GE Capital's field audit and due diligence.

Regardless of whether any commitment herein is terminated or either Facility
closes, the Company shall indemnify and hold harmless each of GE Capital, its
affiliates, and the directors, officers, employees, and representatives of any
of them (each, an "Indemnified Person"), from and against all claims, suits,
actions, proceedings, losses (including, but not limited to, attorneys' fees and
disbursements and other costs of investigation or defense, including those
incurred upon any appeal, except that such fees, disbursements and costs with
respect to attorneys shall be payable only with respect to one law firm, local
counsel and special regulatory counsel), damages, and liabilities of any kind
(and expenses directly related to such claims, suits, actions, proceedings,
losses, damages and liabilities) which may be incurred by, or asserted against,
any such Indemnified Person in connection with, or arising out of, this
Commitment Letter, the Fee Letter, the Prior Letters, the Facilities, the
Transaction, any other related financing, documentation, any actions or failures
to act in connection therewith, any disputes or environmental liabilities, or
any related investigation, litigation, or proceeding (collectively, the
"Indemnified Amounts"), excluding, however, Indemnified Amounts to the extent
found in a final non-appealable judgment of a court of competent jurisdiction to
have resulted from gross negligence or willful misconduct of such Indemnified
Person. Under no circumstances shall GE Capital or any of its affiliates be
liable for any punitive, exemplary, consequential or indirect damages which may
be alleged to result in connection with this Commitment Letter, the Fee Letter,
the Prior Letters, the Transaction, or the Facilities or any other financing,
regardless of whether the commitment herein is terminated or the Transaction or
either Facility closes.


                                       17


EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS COMMITMENT LETTER, THE
PRIOR LETTERS, ANY TRANSACTION RELATING HERETO OR THERETO, OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THEREWITH, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH PARTY HERETO
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE STATE OF NEW
YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN OR AMONG ANY OF THE PARTIES HERETO PERTAINING TO THIS
COMMITMENT LETTER, THE FEE LETTER, THE PRIOR LETTERS, OR THE TRANSACTIONS UNDER
CONSIDERATION, ANY OTHER FINANCING RELATED THERETO, AND ANY INVESTIGATION,
LITIGATION, OR PROCEEDING RELATED TO OR ARISING OUT OF ANY SUCH MATTERS,
PROVIDED, THAT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT (INCLUDING AN APPELLATE COURT) LOCATED OUTSIDE
OF SUCH JURISDICTION. EACH PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND HEREBY WAIVES ANY OBJECTION WHICH SUCH PARTY MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR INCONVENIENT FORUM.

This Commitment Letter is governed by and shall be construed in accordance with
the laws of the State of New York applicable to contracts made and performed in
that State.

GE Capital shall have access to all relevant facilities, personnel and
accountants, and copies of all documents which GE Capital may request, including
business plans, financial statements (actual and pro forma), books, records, and
other documents of the Company, each Originator and the Seller.

This Commitment Letter shall be of no force and effect unless on or before 5:00
p.m. Eastern Standard Time on April 2, 2005, this Commitment Letter and the Fee
Letter are executed and delivered by the Company to GE Capital at 1100 Abernathy
Rd., Suite 900, Atlanta, Georgia 30328.

Once this Commitment Letter has been so executed and delivered by the Company,
GE Capital's commitment to provide (a) the Seventh Amendment in accordance with
the terms of this Commitment Letter shall cease if the Seventh Amendment does
not close for any reason (other than GE Capital's breach of its commitments
hereunder), on or before May 15, 2005, (b) the Extension in accordance with
the terms of this Commitment Letter shall cease if the Extension does not close
for any reason (other than GE Capital's breach of its commitments hereunder), on
or before January 1, 2007, and (c) the New Facility in accordance with the terms
of this Commitment Letter shall cease if the New Facility does not close for any
reason (other than GE Capital's breach of its commitments hereunder), on or
before August 15, 2005, and, notwithstanding any further discussions,
negotiations or other actions taken after such date, neither GE Capital nor any
of its affiliates shall have any liability to any person in connection with its
refusal to fund the Seventh Amendment, the Extension or the New Facility or any
portion thereof after such applicable date.


                                       18


Thank you for this opportunity to work with Metaldyne Corporation. We look
forward to continuing to work with you towards completing this transaction and
expanding GE Capital's relationship with you.


Sincerely,
GENERAL ELECTRIC CAPITAL CORPORATION


By:  /s/ Curtis J. Correa
     -----------------------------------
Name: Curtis J. Correa
Title: Duly Authorized Signatory


AGREED AND ACCEPTED THIS 31ST DAY OF MARCH, 2005.


METALDYNE CORPORATION


By:  /s/ Jeffrey M. Stafeil
     ---------------------------------------
Name:  Jeffrey M. Stafeil
Title:  Executive Vice President and Chief Financial Officer


                                       19





                     Form of Exhibit A to Commitment Letter
                     --------------------------------------


            SECTION 1. Schedule A of the Receivables Transfer Agreement. (a) The
following definitions in Schedule A of the Receivables Transfer Agreement are
hereby amended by replacing or adding, as the case may be, the following defined
terms in their entirety:

                "Commitment Expiry Date" shall mean the earliest to occur of (i)
            the date on which all amounts due and owing to the CP Conduit
            Purchasers and the Committed Purchasers under the Receivables
            Transfer Agreement and the other Transaction Documents have been
            paid in full, (ii) the date on which the Aggregate Commitment has
            been reduced to zero pursuant to the Receivables Transfer
            Agreement, (iii) The Termination Date, and (iv) April 28, 2006.

                "Credit Default Swap" shall mean

                                       20





                (i) the credit default swap dated as of April 8, 2004 between
            the Transferor and an Eligible Counterparty with respect to the
            payment obligations of DaimlerChrysler AG,

                (ii) the credit default swap dated as of April 9, 2004 between
            the Transferor and an Eligible Counterparty with respect to the
            payment obligations of Ford Motor Company,

                (iii) the credit default swap dated as of February 13, 2004,
            between the Transferor and an Eligible Counterparty with respect
            to the payment obligations of General Motors Corporation, or

                (iv) the credit default swap dated as of [ ], between the
            Transferor and an Eligible Counterparty with respect to the
            payment obligations of Dana Corporation,

            as applicable, in each case which shall be satisfactory in form,
            substance, amount and in all other respects to the Administrative
            Agent and each Committed Purchaser, as the same may from time to
            time be modified, supplemented, amended, extended or replaced as
            consented to by the Administrative Agent and each Committed
            Purchaser.

                "Dilution Period" shall mean, on any day, a number equal to a
            fraction, the numerator of which is the sum of all Receivables
            which arose during the three Settlement Period immediately
            preceding such day and the denominator of which is the Net
            Receivables Balance.

                "Dilution Ratio" shall mean, as of the last day of each
            Settlement Period, the percentage equivalent of a fraction, the
            numerator of which is the aggregate amount of Diluted Receivables
            arising during such Settlement Period and the denominator of
            which is the aggregate principal amount of all Receivables
            originated by the Sellers during the Settlement Period three
            Settlement Periods prior to the Settlement Period ended on such
            day.

                "Loss and Dilution Reserve Ratio" shall mean, on any day, the
            greater of (a) the sum of (i) 16% plus (ii) the product of (x)
            the average Dilution Ratio over the immediately preceding fiscal
            12-month period and (y) DSO divided by 30, (b) 21% and (c) the
            sum of the Loss Reserve Ratio plus the Dilution Reserve Ratio.

                "Notional Amount" shall mean (i) with respect to DaimlerChrysler
            AG, an amount up to $12,500,000, (ii) with respect to General
            Motors Corporation, an amount up to $7,500,000, (iii) with
            respect to Ford Motor Company, an amount up to $20,000,000, and
            (iv) with respect to Dana Corporation, an amount up to
            $5,000,000.

            (b) The definition of "Dilution Reserve Ratio" is hereby amended by
(i) replacing the definition of "e" in its entirety with the following:

                                       21






            e   =   the highest three-month average Dilution Ratio that occurred
                    during the period of 12 consecutive Settlement Periods
                    ending prior to such earlier Settlement Date; and

            (c) The definition of "Eligible Receivable" is hereby amended by (i)
replacing subclause (3) thereto in its entirety with the following:

                (3) the Obligor of which is (A) a United States resident or a
            resident of a U.S. territory; provided, however, that Receivables
            of an Obligor which is resident in Canada (excluding residents of
            the Province of Quebec) shall be deemed to be Eligible
            Receivables (x) if such Receivables would otherwise be Eligible
            Receivables except for the fact that such Obligor is not a United
            States resident or a resident of a U.S. territory and (y) only to
            the extent the aggregate principal amount of such Receivables
            does not exceed 5.0% of the Outstanding Balance of all
            Receivables (B) a Designated Obligor at the time of the initial
            creation of an interest therein hereunder, (C) not an Official
            Body or an Affiliate of any of the parties to the Receivables
            Transfer Agreement, (D) not the subject of an Event of
            Bankruptcy, and (E) an Eligible Obligor;

            SECTION 2. Amendments to Section 7.01 of the Receivables Transfer
Agreement. Section 7.01 of the Receivables Transfer Agreement is hereby amended
by (i) replacing "2.5%" with "3.00%" in subclause (k) thereto.

            SECTION 3. Amendments to Schedule C of the Receivables Transfer
Agreement. Schedule C of the Receivables Transfer Agreement is hereby amended to
read in its entirety as set forth in Schedule C attached to this Amendment.


                                       22




      SCHEDULE C
      ----------



                                          Schedule of Special Obligors
                                          ----------------------------

- -------------------------------- ---------------------------------------- ----------------------------------------
Special Obligor                  Percentage Limit                         Conditions
(together with its
Subsidiaries)
- -------------------------------- ---------------------------------------- ----------------------------------------

- -------------------------------- ---------------------------------------- ----------------------------------------
New Venture Gear                 12%                                      So long as the long-term rating of
                                                                          Magna International Inc. is at least
                                                                          BBB by S&P.
- -------------------------------- ---------------------------------------- ----------------------------------------

- -------------------------------- ---------------------------------------- ----------------------------------------
DaimlerChrysler AG               The lesser of                            DaimlerChrysler AG shall be a Special
                                                                          Obligor until 4/8/05 (the "Daimler
                                 (X) the sum of                           Cutoff Date", as such date may
                                                                          be extended following the purchase of a
                                     (i)    4%, plus                      new Credit Default Swap acceptable to
                                     (ii)   the quotient                  the Administrative Agent) so long as
                                            (expressed as a               the (i) a Credit Default Swap is in full
                                            percentage) of (A)            force and effect with an Eligible
                                            Notional Amount               Counterparty with an expiration date no
                                            of the applicable             earlier than the date which is 90 days after
                                            Credit  Default Swap          the applicable Daimler Cutoff Date and (ii)
                                            divided by (B) the            such Obligor shall be rated at least BBB-
                                            Outstanding  Balance          and Baa3 by S&P and Moody's, respectively.
                                            of Eligible Receivables,

                                 and

                                 (Y) 20%.

- -------------------------------- ---------------------------------------- ----------------------------------------

- -------------------------------- ---------------------------------------- ----------------------------------------
General Motors Corporation       The lesser of                            General Motors Corporation shall be a
                                                                          Special Obligor until 4/14/05 the "GM
                                 (X) the sum of                           Cutoff Date", as such date may be extended
                                                                          following the purchase of a new Credit
                                     (iii)  the applicable                Default Swap acceptable to the
                                            percentages set forth         Administrative Agent) so long as (i) a
                                            in the definition of          Credit Default Swap is in full force and
                                            "Concentration Factor"        effect with an EligibleCounterparty with an
                                            if such Obligor was not       expiration date no earlier than the date
                                            a Special Obligor and         which is 90 days after the applicable GM
                                                                          Cutoff Date and (ii) such Obligor shall be
                                      (iv)  the quotient (expressed       rated at least BBB- and Baa3 by S&P and
                                            as a percentage) of (A)       Moody's, respectively.
                                            the Notional Amount of the
                                            applicable Credit Default
                                            Swap divided by (B) the
                                            Outstanding Balance of
                                            Eligible Receivables and,

                                 and

                                 (Y) 15%.

- -------------------------------- ---------------------------------------- ----------------------------------------

- -------------------------------- ---------------------------------------- ----------------------------------------
Ford Motor Company               The lesser of                            Ford Motor Company shall be a Special
                                                                          Obligor until 4/9/05 (the "Ford Cutoff
                                 (X) the sum of                           Date", as such date may be extended
                                                                          following the purchase of a new Credit
                                     (v)    the applicable percentages    Default Swap acceptable to the
                                            set forth in the definition   Administrative Agent) so long as (i) a
                                            of "Concentration Factor"     Credit Default Swap is in full force and
                                            if such Obligor was not a     effect with an Eligible Counterparty with an
                                            Special Obligor and           expiration date no earlier date than the
                                                                          date which is 90 days after the applicable
                                     (vi)   the quotient (expressed as a  Ford Cutoff Date and (ii) such Obligor shall
                                            percentage) of (A) the        be rated at least BBB- and Baa3 by S&P and
                                            Notional Amount of the        Moody's, respectively.
                                            applicable Credit Default
                                            Swap divided by  (B) the
                                            Outstanding Balance of
                                            Eligible Receivables and,

                                 and

                                 (Y) 20%.

- -------------------------------- ---------------------------------------- ----------------------------------------

- -------------------------------- ---------------------------------------- ----------------------------------------
Dana Corporation                 The lesser of                            Dana Corporation shall be a Special
                                                                          Obligor until [_____](the "Dana Cutoff
                                 (X) the sum of                           Date", as such date may be extended
                                                                          following the purchase of a new Credit
                                     (vii)  the applicable percentages    Default Swap acceptable to the
                                            set forth in the definition   Administrative Agent) so long as (i) a
                                            of "Concentration Factor"     Credit Default Swap is in full force and
                                            if such Obligor was not       effect with an Eligible Counterparty with an
                                            a Special Obligor and         expiration date no earlier date than the
                                                                          date which is 90 days after the applicable
                                     (viii) the quotient (expressed as    Dana Cutoff Date and (ii) such Obligor shall
                                            a percentage) of (A) the      be rated at least BBB- by S&P or Baa3 by
                                            Notional Amount of the        Moody's.
                                            applicable Credit Default
                                            Swap divided by (B) the
                                            Outstanding Balance of
                                            Eligible Receivables and,

                                 and

                                 (Y) 10%.

- -------------------------------- ---------------------------------------- ----------------------------------------

- -------------------------------- ---------------------------------------- ----------------------------------------
Benteler Automotive Inc          6%
- -------------------------------- ---------------------------------------- ----------------------------------------


                                       23


                         Exhibit B to Commitment Letter
                         ------------------------------

                              CONCENTRATION LIMITS
                              --------------------

For any Obligor, at any time, the percentage of the Net Receivables Balance (a)
set forth in the table below for "Base Concentration Limits" adjacent to such
Obligor's senior unsecured long-term debt rating by Standard & Poor's (or the
equivalent for Moody's, but applying the lower of the two ratings), or (b) if
Seller has purchased a credit default swap with respect to any Obligor which
credit default swap is in full force and effect and in the amount and otherwise
on terms and in form and substance acceptable to the Agent, and which such
credit default swap has been assigned to the Agent pursuant to an assignment in
form and substance acceptable to the Agent and acknowledged by the related
seller of protection, set forth in the table below for "Credit Default Swap
Obligors" adjacent to such Obligor's senior unsecured long-term debt rating by
Standard & Poor's (or the equivalent for Moody's, but applying the lower of the
two ratings); provided, that the aggregate concentration limit permitted for
Ford Motor Company, Daimler Chrysler and General Motors shall not exceed 55.0%,
or (c) if the Agent has otherwise approved a higher limit for specific Obligors,
such higher percentage; provided, that in the case of an Obligor with one or
more affiliated Obligors, the foregoing concentration limits and the Receivables
related thereto shall be treated as if such Obligor and such one or more
affiliated Obligors were one Obligor.

                            Base Concentration Limits

- --------------------------------------- ----------------------------------------
                RATING                               CONCENTRATION
- --------------------------------------- ----------------------------------------
             A- or Better                                20.00%
- --------------------------------------- ----------------------------------------
             BBB- to BBB+                                15.00%
- --------------------------------------- ----------------------------------------
              BB- to BB+                                 7.50%
- --------------------------------------- ----------------------------------------
     Not Rated or lower than BB-                         5.00%
- --------------------------------------- ----------------------------------------


                          Credit Default Swap Obligors

- ------------------------------- ------------------------- ----------------------
             RATING              MAXIMUM CONCENTRATION       DISCOUNT FACTOR
- ------------------------------- ------------------------- ----------------------
          A- or Better                   30.00%                    0%
- ------------------------------- ------------------------- ----------------------
          BBB- to BBB+                   25.00%                    0%
- ------------------------------- ------------------------- ----------------------
           BB- to BB+                    15.00%                    20%
- ------------------------------- ------------------------- ----------------------
  Not Rated or lower than BB-            5.00%                     50%
- ------------------------------- ------------------------- ----------------------

As of any date, the Concentration limit for each Credit Default Swap Obligor
shall be equal to the lesser of (a) the Maximum Concentration applicable to such
Obligor set forth in the "Credit Default Swap Obligors" table above and (b) an
amount equal to (A) the applicable Base Concentration Limit set forth in the
"Base Concentration Limits" table set forth above plus (B) the face value of the
applicable credit default swap multiplied by (1.0 minus the Discount Factor),
divided by the outstanding balance of the Eligible Receivables at such time.


                                       24

EX-10.4.5

                                                                  Execution Copy

                                    Amendment No. 5 dated as of March 15, 2002
                           (this "Amendment"), to the Receivables Transfer
                           Agreement referred to below among MTSPC, INC., (the
                           "Transferor"), METALDYNE CORPORATION (f/k/a)
                           MascoTech, Inc.) (the "Parent"), individually, as
                           Collection Agent and as Guarantor, PARK AVENUE
                           RECEIVABLES CORPORATION ("PARCO"), and EIFFE FUNDING
                           LLC ("EIFFEL") (collectively, the "CP Conduit
                           Purchasers"), JPMORAGAN CHASE BANK (f/k/a The Chase
                           Manhattan Bank), as Committed Purchaser and Funding
                           Agent for PARCO ("Chase"), CDC FINANCIAL PRODUCTS
                           INC., as Committed Purchaser and Funding Agent for
                           Eiffel ("CDC") (collectively, the "Committed
                           Purchasers"), and JPMORGAN CHASE BANK, as
                           Administrative Agent.

                  A. The Transferor, the Collection Agent, the Guarantor, PARCO,
Chase and the Administrative Agent have entered into a Receivables Transfer
Agreement dated as of November 28, 2000 (the "Receivables Transfer Agreement").

                  B. The Transferor, the Collection Agent, the Guarantor, PARCO,
Chase, Eiffel, CDC and the Administrative Agent have amended the Receivables
Transfer Agreement as of December 15, 2000 (the "First Amendment"), March 23,
2001 (the "Second Amendment"), June 22, 2001 (the "Third Amendment") and October
18, 2001 (the "Fourth Amendment").

                  C. The Transferor has asked to amend certain terms of the
Receivables Transfer Agreement and the Transferor, the Collection Agent, the
Guarantor, PARCO, Chase, Eiffel, CDC and the Administrative Agent are willing,
on the terms and subject to the conditions set forth below, to amend the
Receivables Transfer Agreement as provided herein.

                  D. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to them in the Receivables Transfer Agreement.

                  Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto hereby agree as follows:






                  SECTION 1. Schedule A of the Receivables Transfer Agreement.
(a) The definition of "Receivable" is hereby amended to read in its entirety as
follows:

                  "'Receivable' shall mean, the indebtedness owed to a Seller by
          an Obligor under a Contract and rights of payment and other payment
          obligations, whether constituting an account, chattel paper,
          instrument, investment property or general intangible, arising in
          connection with the sale or lease of merchandise or the rendering of
          services by the Seller, in its ordinary course of business and
          includes the right to payment of any Finance Charges and other
          obligations of such Obligor with respect thereto; provided that any
          obligation of any Person to pay for tooling or equipment purchased or
          built by DuPage Die Casting Corporation for the purpose of
          manufacturing products for such Person, including the right to payment
          of any interest, sales taxes, finance charges, returned check or late
          charges and other obligations of such Person with respect thereto
          shall not constitute a "Receivable". Notwithstanding the foregoing,
          once a Receivable has been deemed collected pursuant to Section 2.10
          of the Receivables Transfer Agreement, it shall no longer constitute a
          Receivable under the Receivables Transfer Agreement."

                  SECTION 2. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

                  SECTION 3. Expenses. The Transferor shall pay all
out-of-pocket fees and expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, execution and delivery of this
Amendment, including the fees, disbursements and other charges of Cravath,
Swaine & Moore, counsel for the Administrative Agent.

                  SECTION 4. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be an original but all of which,
when taken together, shall constitute but one instrument. Delivery of an
executed counterpart of a signature page of this Amendment by fax shall be as
effective as delivery of a manually executed counterpart of this Amendment.

                  SECTION 5. Headings. Section headings used herein are for
convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or be taken into consideration in interpreting, this
Amendment.






                  SECTION 6. Effect of Amendment. Except as specifically amended
or modified hereby, the Receivables Transfer Agreement, as previously amended by
the First Amendment, the Second Amendment, the Third Amendment and the Fourth
Amendment, shall continue in full force and effect in accordance with the
provisions thereof. As used therein, the terms "Agreement", "herein",
"hereunder", "hereinafter", hereto", "hereof" and words of similar import shall,
unless the context otherwise requires, refer to the Receivables Transfer
Agreement as amended hereby.

         IN WITHNESS WHEROF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the date first above
written.

                                   MTSPC, INC., as
                                        Transferor


                                        By
                                           -------------------------------------
                                           Name:
                                           Title:


                                   METALDYNE CORPORATION
                                   (f/k/a MascoTech, Inc.),
                                        individually, as
                                        Collection Agent and as
                                        Guarantor


                                        By
                                           /s/ Karen A. Radtke
                                           -------------------------------------
                                           Name:  Karen A. Radtke
                                           Title: Vice President and Treasurer

EX-10.4.6

                                                                (EXECUTION COPY)

                                    AMENDMENT No. 6 dated as of February 13,
                           2003 (this "Amendment"), to the Receivables Transfer
                           Agreement referred to below among MTSPC, Inc., (the
                           "Transferor"), METALDYNE CORPORATION (f/k/a
                           MascoTech, Inc.) (the "Parent"), individually, as
                           Collection Agent and as Guarantor, PARK AVENUE
                           RECEIVABLES CORPORATION ("PARCO') and EIFFEL FUNDING
                           LLC ("Eiffel") (collectively, the "CP Conduit
                           Purchasers"), JPMORGAN CHASE BANK (formerly known as
                           The Chase Manhattan Bank), as Committed Purchaser and
                           Funding Agent for PARCO ("Chase), CDC FINANCIAL
                           PRODUCTS INC., as Committed Purchaser and Funding
                           Agent for Eiffel ("CDC" (collectively, the "Committed
                           Purchasers"), and JPMORGAN CHASE BANK, as
                           Administrative Agent.

                  A. The Transferor, the Collection Agent, the Guarantor, PARCO,
Chase and the Administrative Agent have entered into a Receivables Transfer
Agreement dated as of November 28, 2000 (the "Receivables Transfer Agreement").

                  B. The Transferor, the Collection agent, the Guarantor, PARCO,
Chase, Eiffel, CDC and the Administrative Agent have amended the Receivables
Transfer Agreement as of December 15, 2000 (the "First Amendment"), as of March
23, 2001 (the "Second Amendment"), as of June 22, 2001 (the "Third Amendment")
and as of October 18, 2001 (the "Fourth Amendment").

                  C. The Transferor has asked to amend certain terms of the
Receivables Transfer Agreement and the Transferor, the Collection Agent, the
Guarantor, PARCO, Chase, Eiffel, CDC and the Administrative Agent are willing,
on the terms and subject to the conditions set forth below, to amend the
Receivables Transfer Agreement as provided herein.

                  D. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to them in the Receivables Transfer Agreement.

                  Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto hereby agree as follows:






                  SECTION 1. Schedule A of the Receivables Transfer Agreement.
The following definitions in Schedule A of the Receivables Transfer Agreement
are hereby amended in their entirety to read as follows:

                  "Credit Default Swap" shall mean

                           (i) the credit default swap dated as of January 9,
                  2003 between the Transferor and an Eligible Counterparty with
                  respect to the payment obligations of DaimlerChrysler AG,

                           (ii) the credit default swap dated as of January 9,
                  2003 between the Transferor and an Eligible Counterparty with
                  respect to the payment obligations of Ford Motor Company, or

                           (iii) the credit default swap dated as of February
                  13, 2003, between the Transferor and an Eligible Counterparty
                  with respect to the payment obligations of General Motors
                  Corporation,

         as applicable, in each case which shall be satisfactory in form,
         substance, amount and in all other respects to the Administrative Agent
         and each Committed Purchaser, as the same may from time to time be
         modified, supplemented, amended, extended or replaced as consented to
         by the Administrative Agent and each Committed Purchaser.

                  "Notional Amount" shall mean

                  (i) with respect to DaimlerChrysler AG, $5,000,000,
                  (ii) with respect to Ford Motor Company, $20,000,000 and
                  (iii) with respect to General Motors Company, $5,000,000.

                  SECTION 2. Amendments to Schedule C of the Receivables
Transfer Agreement. Schedule C of the Receivables Transfer Agreement is hereby
amended to read in its entirety as set forth in Schedule C attached to this
Amendment.

                  SECTION 3. Effectiveness. This Amendment shall become
effective on the date when the following conditions are met:

                  (a) Execution of Amendment. This Amendment shall have been
executed by the Transferor, the Parent, individually, as Collection Agent and as
Guarantor, each of the CP Conduit Purchasers, each of the Committed Purchasers
and Funding agents and the Administrative Agent;

                  (b) Officer's Certificates. The Administrative Agent shall
have received an Officer's Certificate dated as of the date hereof by the
Transferor and the Parent as to such matters as the Administrative Agent may
reasonably request;


                  (c) Rating Confirmations. Pursuant to Section 10.02 of the
Receivables Transfer Agreement, this Amendment will not become effective until
the Rating Agencies have provided Rating Confirmations; and

                  (d) Fees. (a) The Administrative Agent shall have received
payment of all fees and other amounts due and payable to it (including the
reasonable fees and disbursements of counsel for the Administrative Agent and
rating agency amendment fees) as of the date hereof and (b) each Committed
Purchaser shall have received payment of all fees and other amounts due and
payable to it (including the reasonable fees and disbursements of counsel for
such Committed Purchaser in connection with the preparation of this Amendment
and any documents related thereto) as of the date hereof.

                  SECTION 4. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

                  SECTION 5. Expenses. The Transferor shall pay all
out-of-pocket fees and expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, executive and delivery of this
Amendment, including the fees, disbursements and other charges of Cravath,
Swaine & Moore, counsel for the Administrative Agent and rating agencies fees
for processing this Amendment.

                  SECTION 6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be an original but all of which,
when taken together, shall constitute but one instrument. Delivery of an
executed counterpart of a signature page of this Amendment by fax shall be as
effective as delivery of a manually executed counterpart of this Amendment.

                  SECTION 7. Headings. Section headings used herein are for
convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Amendment.

                  SECTION 8. Effect of Amendment. Except as specifically amended
or modified hereby, the Receivables Transfer Agreement, as previously amended by
the First Amendment, the Second Amendment, and the Third Amendment shall
continue in full force and effect in accordance with the provisions thereof. As
used therein, the terms "Agreement", "herein", "hereunder", "hereinafter",
"hereto", "hereof" and words of similar import shall, unless the context
otherwise requires, refer to the Receivables Transfer Agreement as amended
hereby.






                  IN WITNESS WHEREOF, the parties here to have caused this
Amendment to be duly executed by their respective authorized officers as of the
date first above written.


                                         MTSPC, INC., as Transferor


                                            by
                                            /s/ Karen A. Radtke
                                            ------------------------------------
                                            Name:  Karen Radtke
                                            Title: Vice President


                                         METALDYNE CORPORATION,
                                           individually, as Collection
                                           Agent and as Guarantor


                                            by
                                            /s/ Karen A. Radtke
                                            ------------------------------------
                                            Name:  Karen Radtke
                                            Title: Vice President



                                         PARK AVENUE RECEIVABLES
                                            CORPORATION, as CP
                                            Conduit Purchaser


                                            by
                                            /s/ Andrew L. Stidd
                                            -----------------------------------
                                            Name:  Andrew L. Stidd
                                            Title: President











                                         JPMORGAN CHASE BANK, as Committed
                                            Purchaser for Park Avenue
                                            Receivables Corporation

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:



                                         JPMORGAN CHASE BANK, as Funding Agent
                                            for Park Avenue Receivables
                                            Corporation,

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:



                                         JPMORGAN CHASE BANK, as Administrative
                                            Agent

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:






                                         PARK AVENUE RECEIVABLES CORPORATION, as
                                            CP Conduit Purchaser

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:



                                         JPMORGAN CHASE BANK, as Committed
                                            Purchaser for Park Avenue
                                            Receivables Corporation

                                            by
                                            /s/ Bradley S. Schwartz
                                            ------------------------------------
                                            Name:  Bradley S. Schwartz
                                            Title: Managing Director



                                         JPMORGAN CHASE BANK, as Funding Agent
                                            for Park Avenue Receivables
                                            Corporation

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:



                                         JPMORGAN CHASE BANK, as Administrative
                                            Agent,

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:






                                         PARK AVENUE RECEIVABLES CORPORATION, as
                                            CP Conduit Purchaser

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:



                                         JPMORGAN CHASE BANK, as Committed
                                            Purchaser for Park Avenue
                                            Receivables Corporation

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:



                                         JPMORGAN CHASE BANK, as Funding Agent
                                            for Park Avenue Receivables
                                            Corporation

                                            by
                                            /s/ Christopher Lew
                                            ------------------------------------
                                            Name:  Christopher Lew
                                            Title: Assistant Vice President



                                         JPMORGAN CHASE BANK, as Administrative
                                            Agent,

                                            by
                                            /s/ Christopher Lew
                                            ------------------------------------
                                            Name:  Christopher Lew
                                            Title: Assistant Vice President







                                         EIFFEL FUNDING LLC, as CP Conduit
                                            Purchaser by Global Securitization
                                            Services, LLC, its Manager

                                            by
                                            /s/ Andrew L. Stidd
                                            ------------------------------------
                                            Name:  Andrew L. Stidd
                                            Title: President



                                         CDC FINANCIAL PRODUCTS, INC., as
                                            Committed Purchaser for Eiffel
                                            Funding, LLC

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:


                                            by
                                            ------------------------------------
                                            Name:
                                            Title:



                                         CDC FINANCIAL PRODUCTS, INC., as
                                            Funding Agent for Eiffel Funding,
                                            LLC

                                            by
                                            ------------------------------------
                                            Name:
                                            Title:



                                            by
                                            ------------------------------------
                                            Name:
                                            Title:






                                         EIFFEL FUNDING LLC, as CP Conduit
                                            Purchaser by Global Securitization
                                            Services, LLC, its Manager


                                            by
                                            ------------------------------------
                                            Name:
                                            Title:


                                         CDC FINANCIAL PRODUCTS, INC., as
                                            Committed Purchaser for Eiffel
                                            Funding, LLC

                                            by
                                            /s/ Paul Monaghan
                                            ------------------------------------
                                            Name:  Paul Monaghan
                                            Title: Director

                                            by
                                            /s/ William Branagh
                                            ------------------------------------
                                            Name:  William Branagh
                                            Title: Director



                                         CDC FINANCIAL PRODUCTS, INC., as
                                            Funding Agent for Eiffel Funding,
                                            LLC

                                            by
                                            /s/ Paul Monaghan
                                            ------------------------------------
                                            Name:  Paul Monaghan
                                            Title: Director

                                            by
                                            /s/ William Branagh
                                            ------------------------------------
                                            Name:  William Branagh
                                            Title: Director






                                                                      SCHEDULE C

                                                    Schedule of Special Obligors




- ------------------------------------------------------------------------------------------------------------------------------------
Special Obligor             Percentage Limit                                    Condition
- ------------------------------------------------------------------------------------------------------------------------------------

New Venture                 12.0%                                               So long as short-term or long- term ratings of
Gear                                                                            DaimlerChrysler and General Motors are at least
                                                                                A-2/BBB by S&P and at least P-2/Baa2 by Moody's,
                                                                                respectively.

- ------------------------------------------------------------------------------------------------------------------------------------
General Motors              The lesser of                                       General Motors Corporation shall be a Special
Corporation                                                                     Obligor until January 14, 2004 (as such date may be
                            (X)      the sum of                                 extended following the purchase of a new Credit
                                                                                Default Swap acceptable to the Committed
                                     (i)   the applicable percentage set forth  Purchasers), so long as (i) a Credit Default Swap is
                                           in the definition of "Concentration  in full force and effect with an Eligible
                                           Factor" if such Obligor was not a    Counterparty with an expiration date no earlier than
                                           Special Obligor, plus                April 14, 2004, and (ii) such Obligor shall be rated
                                                                                at least BBB- and Baa3 by both S&P and Moody's
                                     (ii)  the quotient (expressed as a         respectively, provided, however, that General Motors
                                           percentage) of (A) the Notional      Corporation shall be a Special Obligor at all times
                                           Amount of the applicable Credit      under this Agreement with a 20% Percentage Limit
                                           Default Swap divided by (B) the      long as short- term or long-term ratings are at
                                           Outstanding Balance of Eligible      least A-1/A by S&P and at least P-1 /A2 by Moody's,
                                           Receivables,                         respectively.

                                       and

                            (Y)      20%
- ------------------------------------------------------------------------------------------------------------------------------------






- ------------------------------------------------------------------------------------------------------------------------------------
Special Obligor               Percentage Limit                                  Condition
- ------------------------------------------------------------------------------------------------------------------------------------

Daimler Chrysler              The lesser of                                     DaimlerChrysler shall be a Special Obligor until
                                                                                December 31, 2002 (as such date may be extended
                              (X) the sum of                                    following the purchase of a new Credit Default Swap
                                                                                acceptable to the Committed Purchasers), so long as
                                      (i) 4%, plus                              (i) a Credit Default Swap is in full force and
                                                                                effect with an Eligible Counterparty with an
                                      (ii) the applicable percentage set forth  expiration date no earlier than March 31, 2003 and
                                           in the definition of "Concentration  (ii) such Obligor shall be rated at least BBB- and
                                           Factor: if such Obligor was not a    Baa3 by both S&P and Moody's, respectively,
                                           Special Obligor, plus                provided, however, that DaimlerChrysler shall be a
                                                                                Special Obligor at all times under this Agreement
                                                                                with a 15% Percentage Limit so long as its
                                                                                short-term or long-term ratings are at least A-1/A
                                      (iii)the quotient (expressed as a         by S&P and at least P-1 /A2 by Moody's, respectively
                                           percentage) of (A) the Notional
                                           Amount of the applicable Credit
                                           Default Swap divided by (B) the
                                           Outstanding Balance of Eligible
                                           Receivables,



                              and



                              (Y) 15%
- ------------------------------------------------------------------------------------------------------------------------------------






- ------------------------------------------------------------------------------------------------------------------------------------
Special Obligor               Percentage Limit                                    Condition
- ------------------------------------------------------------------------------------------------------------------------------------

Ford Motor                    The lesser of                                       Ford Motor Company shall be a Special Obligor
Company                                                                           until December 31, 2002 (as such date may be
                              (X)      the sum of                                 extended following the purchase of a new Credit
                                                                                  Default Swap acceptable to the Committed
                                       (i)    the applicable percentage set       Purchasers), so long as (i) a Credit Default Swap
                                              forth in the definition of          is in full force and effect with an Eligible
                                              "Concentration Factor" if such      Counterparty with an expiration date no earlier
                                              Obligor was not a Special Obligor,  than March 31, 2003 and (ii) such Obligor shall be
                                              plus                                rated at least BBB- and Baa3 by both S&P and
                                                                                  Moody's , respectively, provided, however, that
                                       (ii)   the quotient (expressed as a        Ford Motor Company shall be a Special Obligor at
                                              percentage) of (A) the Notional     all times under this Agreement with a 20%
                                              Amount of the applicable Credit     Percentage Limit so long as its short-term or
                                              Default Swap divided by (B) the     long-term ratings are at least A-1/A by S+P and at
                                              Outstanding Balance of Eligible     least P-1 /A2 by Moody's, respectively.
                                              Receivables
- ------------------------------------------------------------------------------------------------------------------------------------

EX-10.27

                              EMPLOYMENT AGREEMENT

         This Agreement is made by and between Metaldyne Corporation, a Delaware
corporation ("Company") and Thomas A. Amato (hereinafter "Executive") September
1, 2001 ("Effective Date"). In order to induce Executive to serve as its Vice
President, Corporate Development, Company enters into this Agreement with
Executive to set out the terms and conditions that will apply to Executive's
employment with Company. Executive is willing to accept such employment and
assignment and to perform services on the terms and conditions hereinafter set
forth. It is therefore hereby agreed by and between the parties as follows:

         SECTION 1 - EMPLOYMENT.

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

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


         SECTION 2 - TERM OF EMPLOYMENT. Executive's term of employment under
this Agreement ("Term of Employment") shall commence on the Effective Date and,
subject to the terms hereof, shall terminate on the earlier of: December 31,
2003 ("Initial Period"); or the date that either party terminates Executive's
employment under this Agreement; provided that subsequent to the Initial Period,
the Term of Employment shall automatically renew each January for one year
("Renewal Period"), unless Company delivers to Executive or Executive delivers
to Company written notice at least thirty (30) days in advance of the expiration
of the Initial Period or any Renewal Period, that the Term of Employment shall
not be extended, in which case the Term of Employment shall end at the end of
the Year in which such notice was delivered and shall not be further extended
except by written agreement of Company and Executive. The expiration of the Term
of Employment under this Agreement shall not be a termination of this Agreement
to the extent that other provisions of this Agreement by their terms survive the
Term of Employment. For purposes of this Agreement, the term "Year" shall mean
the twelve-month period commencing on the Effective Date and each anniversary of
the Effective Date.





         SECTION 3 - COMPENSATION.

         (a)      Salary. During the Initial Period, Company shall pay Executive
                  at the rate of One Hundred Eighty Thousand Dollars ($180,000)
                  per annum ("Base Salary"). Base Salary shall be payable in
                  accordance with the ordinary payroll practices of Company and
                  shall be subject to all applicable federal, state and local
                  withholding and reporting requirements. Base Salary may be
                  adjusted by the President and CEO during the Term of
                  Employment.

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

         SECTION 4 - EMPLOYEE BENEFITS.

         (a)      Employee Retirement Benefit Programs, Welfare Benefit
                  Programs, Plans and Practices. Company shall provide Executive
                  with coverage under any retirement benefit programs, welfare
                  benefit programs, plans and practices, that Company makes
                  available to its senior executives, in accordance with the
                  terms thereof, as such programs, plans and practices may be
                  amended from time to time in accordance with their terms.

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

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

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

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

         SECTION 6 - TERMINATION OF EMPLOYMENT. The respective rights and
responsibilities of the

                                       2


parties to this Agreement notwithstanding, Executive remains an
employee-at-will, and his Term of Employment may be terminated by either party
at any time for any reason by written notice.

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

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

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

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

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

                                       3


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

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

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

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

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

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

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

                                       4


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

         (b)      Voluntary Termination by Executive; Expiration of Employment
                  Term. If Executive terminates his employment with Company
                  without Good Reason, or if the Employment Term expires
                  following notice of nonrenewal by either party under Section
                  2, then Company shall pay Executive his accrued unpaid Base
                  Salary through the date of termination and the AVCP award for
                  the most recently completed year if an award has been declared
                  for such year but not paid. The accrued unpaid Base Salary
                  amounts payable under this Section 6(b) shall be payable in a
                  lump sum within ten (10) days of termination of employment.
                  Any accrued unpaid bonus amounts payable under this Section
                  6(b) shall be payable in accordance with customary practices
                  for payment of bonuses under AVCP. No prorated bonus for the
                  year of termination shall be paid. Any other benefits under
                  other plans and programs of Company in which Executive is
                  participating at the time of Executive's termination of
                  employment shall be paid, distributed, settled, or shall
                  expire in accordance with their terms, and Company shall have
                  no further obligations hereunder with respect to Executive
                  following the date of termination of employment.

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

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

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

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

                                       5


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

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

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

                  (1)      Termination Payments. Company shall pay Executive:

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

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

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

                                       6


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

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

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

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

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

                           (A)      death;

                           (B)      Disability, as defined herein;

                           (C)      Cause, as defined herein; or

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

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

                                       7


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

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

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

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

                                       8


                  under which Executive is able to fulfill his duties under this
                  Agreement. The commencement date and expected duration of any
                  physical or mental condition that prevents Executive from
                  performing his duties hereunder shall be determined by a
                  medical doctor selected by Company. Company may, in its
                  discretion, require written confirmation from a physician of
                  Disability during any extended absence.

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

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

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

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

         SECTION 7 - CAP ON PAYMENTS.

         (a)      General Rules. The Internal Revenue Code (the "Code") may
                  place significant tax burdens on Executive and Company if the
                  total payments made to Executive due to a Change of Control
                  exceed prescribed limits. For example, if Executive's "Base
                  Period Income" (as defined below) is $100,000, Executive's
                  limit or "Cap" is $299,999. If Executive's "Total Payments"
                  exceed the Cap by even $1.00, Executive is subject to an

                                       9


                  excise tax under Section 4999 of the Code of 20% of all
                  amounts paid to Executive in excess of $100,000. In other
                  words, if Executive's Cap is $299,999, Executive will not be
                  subject to an excise tax if Executive receives exactly
                  $299,999. If Executive receives $300,000, Executive will be
                  subject to an excise tax of $40,000 (20% of $200,000). In
                  order to avoid this excise tax and the related adverse tax
                  consequences for Company, by signing this Agreement, Executive
                  will be agreeing that, subject to the exception noted below,
                  the present value of Executive's Total Payments will not
                  exceed an amount equal to Executive's Cap.

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

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

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

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

         (c)      Calculating the Cap and Adjusting Payments. If Company
                  believes that these rules will result in a reduction of the
                  payments to which Executive is entitled under this Agreement,
                  it will so notify Executive as soon as possible. Company will
                  then, at its expense, retain a "Consultant" (which shall be a
                  law firm, a certified public accounting firm, and/or a firm of
                  recognized executive compensation consultants) to provide an
                  opinion or opinions concerning whether Executive's Total
                  Payments exceed the limit discussed above. Company will select
                  the Consultant. At a minimum, the opinions required by this
                  Section must set forth the amount of Executive's Base Period
                  Income, the present value of the Total Payments and the amount
                  and present value of any excess parachute payments. If the
                  opinions state that there would be an excess parachute
                  payment, Executive's payments under this Agreement will be
                  reduced to the extent necessary to eliminate the excess.
                  Executive

                                       10


                  will be allowed to choose the payment that should be reduced
                  or eliminated, but the payment Executive chooses to reduce or
                  eliminate must be a payment determined by such Consultant to
                  be includable in Total Payments. Executive's decision shall be
                  in writing and delivered to Company within thirty (30) days of
                  Executive's receipt of such opinions. If Executive fails to so
                  notify Company, Company will decide which payments to reduce
                  or eliminate. If the Consultant selected to provide the
                  opinions referred to above so requests in connection with the
                  opinion required by this Section, a firm of recognized
                  executive compensation consultants selected by Company shall
                  provide an opinion, upon which such Consultant may rely, as to
                  the reasonableness of any item of compensation as reasonable
                  compensation for services rendered before or after the Change
                  of Control. If Company believes that Executive's Total
                  Payments will exceed the limitations of this Section, it will
                  nonetheless make payments to Executive, at the times stated
                  above, in the maximum amount that it believes may be paid
                  without exceeding such limitations. The balance, if any, will
                  then be paid after the opinions called for above have been
                  received. If the amount paid to Executive by Company is
                  ultimately determined, pursuant to the opinion referred to
                  above or by the Internal Revenue Service, to have exceeded the
                  limitation of this Section, the excess will be treated as a
                  loan to Executive by Company and shall be repayable on the
                  ninetieth (90th) day following demand by Company, together
                  with interest at the lowest "applicable federal rate" provided
                  in Section 1274(d) of the Code. If it is ultimately
                  determined, pursuant to the opinion referred to above or by
                  the Internal Revenue Service, that a greater payment should
                  have been made to Executive, Company shall pay Executive the
                  amount of the deficiency, together with interest thereon from
                  the date such amount should have been paid to the date of such
                  payment, at the rate set forth above, so that Executive will
                  have received or be entitled to receive the maximum amount to
                  which Executive is entitled under this Agreement.

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

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

                                       11




         SECTION 8 - TAX GROSS-UP.

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

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

                                       12


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

         SECTION 9 - NOTICES. All notices or communications hereunder shall be
in writing, addressed as follows:

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

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

                  To Executive:
                                            ------------------------

                                            ------------------------

                                            ------------------------


                  with a copy to:
                                            ------------------------

                                            ------------------------

                                            ------------------------


                                       13


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

         SECTION 10 - SEPARABILITY; LEGAL FEES. If any provision of this
Agreement shall be declared to be invalid or unenforceable, in whole or in part,
such invalidity or unenforceability shall not affect the remaining provisions
hereof which shall remain in full force and effect. In the event of a dispute by
Company, Executive or others as to the validity or enforceability of, or
liability under, any provision of this Agreement, Company shall reimburse
Executive for all reasonable legal fees and expenses incurred by him in
connection with such dispute if Executive substantially prevails in the dispute
and if Executive has not substantially prevailed in such dispute one-half (1/2)
the amount of all reasonable legal fees and expenses incurred by him in
connection with such dispute except to the extent Executive's position is found
by a tribunal of competent jurisdiction to have been frivolous.

         SECTION 11 - ASSIGNMENT AND ASSUMPTION. This contract shall be binding
upon and inure to the benefit of the heirs and representatives of Executive and
the assigns and successors of Company, but neither this Agreement nor any rights
or obligations hereunder shall be assignable or otherwise subject to
hypothecation by Executive (except by will or by operation of the laws of
intestate succession) or by Company, except that Company may assign this
Agreement to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of Company.

         SECTION 12 - AMENDMENT. This Agreement may only be amended by written
agreement of the parties hereto.

         SECTION 13 - NON-COMPETITION; NON-SOLICITATION; CONFIDENTIALITY.

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

         (b)      Executive acknowledges and recognizes the highly competitive
                  nature of the business of Company and accordingly agrees that,
                  in consideration of this Agreement, the rights conferred
                  hereunder, and any payment hereunder, during the Term of
                  Employment and for the two (2) year period following the
                  termination of Executive's employment with Company, for any
                  reason ("Non-Compete Term"), Executive shall not engage,
                  either directly or indirectly, as a principal for Executive's
                  own account or jointly with others, or as a stockholder in any
                  corporation or joint stock association, or as a partner or
                  member of a general or limited liability entity, or as an
                  employee, officer, director, agent, consultant or in any other
                  advisory capacity in any business other than Company or its
                  subsidiaries which designs, develops, manufacturers,
                  distributes, sells or markets the type of products or services
                  sold, distributed or

                                       14


                  provided by Company or its subsidiaries during the two (2)
                  year period prior to the date of termination (the "Business");
                  provided that nothing herein shall prevent Executive from
                  owning, directly or indirectly, not more than five percent
                  (5%) of the outstanding shares of, or any other equity
                  interest in, any entity engaged in the Business and listed or
                  traded on a national securities exchanges or in an
                  over-the-counter securities market.

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

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

         (e)      It is expressly understood and agreed that although Executive
                  and Company consider the restrictions contained in this
                  Section 13 to be reasonable, if a final judicial determination
                  is made by a court of competent jurisdiction that the time or
                  territory or

                                       15


                  any other restriction contained in this Agreement is an
                  unenforceable restriction against Executive, the provisions of
                  this Agreement shall not be rendered void but shall be deemed
                  amended to apply as to such maximum time and territory and to
                  such maximum extent as such court may judicially determine or
                  indicate to be enforceable. Alternatively, if any tribunal of
                  competent jurisdiction finds that any restriction contained in
                  this Agreement is unenforceable, and such restriction cannot
                  be amended so as to make it enforceable, such finding shall
                  not affect the enforceability of any of the other restrictions
                  contained herein.

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

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

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

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

         SECTION 16 - GOVERNING LAW; REVENUE AND JURISDICTION. If any judicial
or administrative proceeding or claim relating to or pertaining to this
Agreement is initiated by either party hereto, such proceeding or claim shall
and must be filed in a state or federal court located in Wayne County, Michigan
and such proceeding or claim shall be governed by and construed under Michigan
law, without regard to conflict of law and principals.

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

         SECTION 18 - EFFECT ON PRIOR AGREEMENTS. This Agreement contains the
entire understanding between the parties hereto and supersedes in all respects
any prior or other agreement

                                       16


or understanding, both written and oral, between Company, any affiliate of
Company or any predecessor of Company or affiliate of any predecessor of Company
and Executive; provided, however, that this Agreement does not supercede the
MascoTech, Inc. Retention Plan or any change in control agreements between
Executive and Simpson Industries, Inc., Global Metal Technologies, Inc.
("GMTI"), or MascoTech, Inc. that predates the Heartland Industrial Partners'
acquisition of Simpson Industries, Inc., GMTI, or MascoTech, Inc. in the year
2000 or 2001 and which agreements by their terms survive such acquisition for a
specified period.

         SECTION 19 - WITHHOLDING. Company shall be entitled to withhold from
payment any amount of withholding required by law.

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

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


                                       17





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

                                                        COMPANY

                                                 METALDYNE CORPORATION

        December 12, 2001           By:          /s/ Timothy D. Leuliette
 ------------------------------        -----------------------------------------
              Date
                                    Its:          Chief Executive Officer
                                       -----------------------------------------

                                                       EXECUTIVE

        December 20, 2001                         /s/ Thomas A. Amato
 ------------------------------        -----------------------------------------
              Date                       Vice President Corporate Development
                                       -----------------------------------------


                                       18



                        AMENDMENT TO EMPLOYMENT AGREEMENT

         This Amendment modifies the Employment Agreement between METALDYNE
CORPORATION ("Company") and THOMAS A. AMATO ("Executive") entered into with an
Effective Date of September 1, 2001. The Employment Agreement remains in effect
in accordance with its terms, except as modified by this Amendment. In
accordance with Section 12 of the Employment Agreement, the parties have agreed
to amend the Employment Agreement as follows:

                                    ARTICLE I

         Section 2 of the Employment Agreement is revised by deleting Section 2
in its entirety and replacing it with the following:

         SECTION 2 - TERM OF EMPLOYMENT. Executive's term of employment under
this Agreement ("Term of Employment") shall commence on the Effective Date and,
subject to the terms hereof, shall terminate on the earlier of December 31, 2006
("Initial Period") or the date that either party terminates Executive's
employment; provided that subsequent to the Initial Period, the Term of
Employment shall automatically renew each January 1 for one year ("Renewal
Period"), unless either party terminates Executive's employment, or Company
delivers to Executive or Executive delivers to Company written notice at least
thirty (30) days but no more than ninety (90) days in advance of the expiration
of the Initial Period or any Renewal Period that the Term of Employment shall
not be extended, in which case the Term of Employment shall end at the end of
the year in which such notice was delivered and shall not be further extended
except by written agreement of Company and Executive. The expiration of the Term
of Employment under this Agreement shall not be a termination of this Agreement
to the extent that other provisions of this Agreement by their terms survive the
Term of Employment.

                                   ARTICLE II

          Executive's Base Salary on the date of this Amendment is Two Hundred
Fifteen Thousand Dollars ($215,000) per year.

                                   ARTICLE III

         Section 3(b) of the Employment Agreement is amended by adding the
phrase "During the Term of Employment" before the phrase "Executive shall be
eligible...."

                                   ARTICLE IV

         Sections 4(b), (c) and (d) of the Employment Agreement are amended by
adding the phrase "During the Term of Employment," following the caption at the
beginning of the first sentence.




                                    ARTICLE V

         The first paragraph of Section 6 of the Employment Agreement is amended
by deleting the first paragraph of Section 6 in its entirety and replacing it
with the following:

         SECTION 6 - TERMINATION OF EMPLOYMENT. Executive's employment during or
after the Term of Employment shall be terminable at will by either party at any
time for any reason.

                                   ARTICLE VI

         Section 6(a) of the Employment Agreement is amended by deleting Section
6(a) in its entirety and replacing it with the following:

         (a)      Termination Without Cause or for Good Reason. If Executive's
                  employment is terminated during or after the Term of
                  Employment by Company for any reason other than Cause (as
                  defined in Section 6(c) hereof), Disability (as defined in
                  Section 6(e) hereof) or death, or if Executive's employment is
                  terminated by Executive for Good Reason (as defined in Section
                  6(a)(2) hereof) during or after the Term of Employment, then
                  Company shall pay Executive the Severance Package. A
                  termination by Executive without Good Reason shall be a
                  termination under Section 6(b) below and not a termination
                  under this Section 6(a).

                                   ARTICLE VII

         Section 6(a)(1)(C)(i) of the Employment Agreement is amended by
deleting Section 6(a)(1)(C)(i) in its entirety and replacing it with the
following:

                  (i)      the end of the eighteen (18) month period following
                           Executive's termination of employment, or

                                  ARTICLE VIII

         Section 6(b) of the Employment Agreement is amended by deleting Section
6(b) in its entirety and replacing it with the following:

         (b)      Voluntary Termination by Executive. If Executive terminates
                  his employment with Company without Good Reason, during or
                  after the Term of Employment, then Company shall pay Executive
                  his accrued unpaid Base Salary through the date of termination
                  and the AVCP award for the most recently completed year if an
                  award has been declared for such year but not paid. The
                  accrued unpaid Base Salary amounts payable under this Section
                  6(b) shall be payable in a lump sum within ten (10) days of
                  termination of employment. Any accrued unpaid bonus amounts
                  payable under this Section 6(b) shall be payable in accordance
                  with customary practices for payment of bonuses under AVCP. No
                  prorated bonus for the year of termination shall be paid. Any
                  other benefits under other plans and programs of Company in
                  which Executive is participating at the time of Executive's
                  termination

                                       2


                  of employment shall be paid, distributed, settled, or shall
                  expire in accordance with their terms, and Company shall have
                  no further obligations hereunder with respect to Executive
                  following the date of termination of employment.

                                   ARTICLE IX

         The first paragraph of Section 6(d) is deleted and replaced with the
following provision:

         Termination Following a Change of Control. If a Change of Control of
Company (as defined below) occurs after the Term of Employment, this Section
6(d) shall not apply. If a Change of Control occurs during the Term of
Employment, and Executive's employment with Company terminates by reason of a
Qualifying Termination (as defined below) within three (3) years after such
Change of Control, then, in lieu of the Severance Package, and subject to the
limitations described in Section 7 below, the Company shall provide Executive
the following termination benefits:

                                    ARTICLE X

         Section 6(d)(2)(A) of the Employment Agreement is amended by deleting
Section 6(d)(2)(A) in its entirety and replacing it with the following:

                  (A) the end of the eighteen (18) month period following
                      Executive's termination of employment, or

                                   ARTICLE XI

         Section 6(e) of the Employment Agreement is amended by deleting the
phrase "under this Agreement" in the first full sentence and replacing it with
the phrase "during the Term of Employment."

                                   ARTICLE XII

         Section 6(i) of the Employment Agreement is amended by deleting the
phrase "the Term of Employment" in the first sentence and replacing it with the
phrase "Executive's employment."

                                  ARTICLE XIII

         Section 13(b) of the Employment Agreement is amended by deleting
Section 13(b) in its entirety and replacing it with the following:

         (b)      Executive acknowledges and recognizes the highly competitive
                  nature of the business of Company and accordingly agrees that,
                  in consideration of this Agreement, the rights conferred
                  hereunder, and any payment hereunder, while employed by
                  Company and for the six (6) month period following the
                  termination of Executive's employment with Company for any
                  reason other than a termination of employment by Executive for
                  any reason after the Term of Employment if the Term of
                  Employment expires following a written notice of nonrenewal
                  from Company ("Non-Compete Term"), Executive shall not engage,
                  either directly or indirectly, as a



                                       3


                  principal for Executive's own account or jointly with others,
                  or as a stockholder in any corporation or joint stock
                  association, or as a partner or member of a general or limited
                  liability entity, or as an employee, officer, director, agent,
                  consultant or in any other advisory capacity in any business
                  other than Company or its subsidiaries which designs,
                  develops, manufacturers, distributes, sells or markets the
                  type of products or services sold, distributed or provided by
                  Company or its subsidiaries during the two (2) year period
                  prior to the date of termination (the "Business"); provided
                  that Executive may, following written notice to and written
                  approval by the Company, be employed without violating Section
                  13(b) by an entity that engages in the Business if, after
                  reviewing the details of Executive's proposed employment or
                  other involvement with such entity, including, without
                  limitation, Executive's proposed title, duties, and reporting
                  responsibilities, the CEO, after consultation with the
                  Chairman of the Compensation Committee, makes a written
                  determination addressed to Executive that the proposed
                  employment does not otherwise present a risk of unfair
                  competition with the Company. This determination shall be made
                  or not made in the sole discretion of the CEO, after
                  consultation with the Chairman of the Compensation Committee,
                  and shall not be accorded any authority as precedent by any
                  party in the interpretation of this Section 13(b) or its
                  application under any other circumstances.

                  Nothing herein shall prevent Executive from owning, directly
                  or indirectly, not more than five percent (5%) of the
                  outstanding shares of, or any other equity interest in, any
                  entity engaged in the Business and listed or traded on a
                  national securities exchange or in an over-the-counter
                  securities market.

                                   ARTICLE XIV

         Section 13(g) of the Employment Agreement is amended by deleting
Section 13(g) in its entirety and replacing it with the following:

         (g)      This Section 13 will survive the termination of Executive's
                  Term of Employment and the termination of this Agreement.

Intending to be legally bound hereby, the parties have signed this Amendment to
be effective September 10, 2004.

                                                      Executive

    September 15, 2004                           /s/ Thomas A. Amato
- --------------------------             ---------------------------------------
           Date


                                                METALDYNE CORPORATION

      October 5, 2004               By:         /s/ Timothy D. Leuliette
- --------------------------             ---------------------------------------
           Date
                                    Its:       Chairman, President and CEO
                                        ------------------------------------


                                        4

EX-12.1

Exhibit 12.1

METALDYNE CORPORATION
Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends

				(In thousands)
				Year Ended January 2 2005				Year Ended December 28 2003				Year Ended December 29 2002				Year Ended December 31 2001				For the Period 11/28-12/31 2000
EARNINGS (LOSS) BEFORE INCOME TAXES AND FIXED CHARGES:
Income (loss) from continuing operations before income taxes and cumulative effect of accounting change, net				$	(64,860	)		$	(83,990	)		$	(69,090	)		$	(47,040	)		$	(42,820	)
(Deduct) add equity in undistributed (earnings) loss of less-than-fifty percent owned companies					(1,450	)			20,700				1,410				8,930				1,000
Add interest on indebtedness, net					82,140				75,510				91,000				148,160				14,440
Add amortization of debt expense					3,880				2,480				4,770				11,620				550
Add preferred stock dividends and accretion					19,900				—				—				—				—
Estimated interest factor for rentals (d)					16,480				12,930				12,460				9,730				310
Earnings before income taxes and fixed charges				$	56,090			$	27,630			$	40,550			$	131,400			$	(26,520	)
FIXED CHARGES:
Interest on indebtedness, net				$	82,140			$	75,510			$	91,000			$	148,160			$	14,440
Amortization of debt expense					3,880				2,480				4,770				11,620				550
Add preferred stock dividends and accretion					19,900				—				—				—				—
Estimated interest factor for rentals (d)					16,480				12,930				12,460				9,730				310
Total fixed charges					122,400				90,920				108,230				169,510				15,300
Preferred stock dividends (a)					—				10,320				13,090				6,430				620
Combined fixed charges and preferred stock dividends				$	122,400			$	101,240			$	121,320			$	175,940			$	15,920
Ratio of earnings to fixed charges					—	(b)			—	(b)			—	(b)			—	(b)			—	(b)
Ratio of earnings to combined fixed charges and preferred stock dividends					—	(c)			—	(c)			—	(c)			—	(c)			—	(c)

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

(b)	Results of operations for the years ended January 2, 2005, December 28, 2003, December 29, 2002 and December 31, 2001 and the 34 days ended December 31, 2000 are inadequate to cover fixed charges by $66,310, $63,290, $67,680, $38,110 and $41,820, respectively.

(c)	Results of operations for the years ended January 2, 2005, December 28, 2003, December 29, 2002 and December 31, 2001 and the 34 days ended December 31, 2000 are inadequate to cover fixed charges and preferred stock dividends by $66,310, $73,610, $80,770, $44,540 and $42,440, respectively.

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

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Registration Statement Nos. 33-59222 and 33-55837), Form S-4 (Registration Statement No. 333-99569) and Form S-8 (Registration Statement Nos. 33-42230 and 333-64531) of Metaldyne Corporation of our report dated March 11, 2003, except as to the effect of the matters described in Note 2 to the consolidated financial statements as filed in the Company's Form 10-K for the year ended December 28, 2003 not appearing herein, and Note 15 appearing herein, which are as of November 10, 2004, relating to the financial statements and financial statement schedule, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP
Detroit, Michigan
March 31, 2005

EX-23.2

Exhibit 23.2

Consent of Independent Registered Accounting Firm

The Board of Directors
Metaldyne Corporation:

We consent to the incorporation by reference in the Registration Statements on Form S-3 (Registration Nos 33-59222 and 33-55837), Form S-4 (Registration No. 333-99569) and Form S-8 (Registration Nos. 33-42230 and 333-64531) of Metaldyne Corporation of our report dated March 31, 2005 with respect to the consolidated balance sheets of Metaldyne Corporation as of January 2, 2005, and the related consolidated statements of operations, stockholders' equity and other comprehensive income, and cash flows, for the year then ended, and the related financial statement schedule, which report appears in the January 2, 2005, annual report on Form 10-K of Metaldyne Corporation. Our report refers to the Company's change in method of accounting for its redeemable preferred stock to conform with Statement of Financial Accounting Standards No. 150, Accounting for Certain Instruments with Characteristics of both Liabilities and Equity.

(signed) KPMG LLP

Detroit, Michigan
March 31, 2005

EX-31.1

Exhibit 31.1

CERTIFICATION OF TIMOTHY D. LEULIETTE
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
FORM 10-K FOR THE YEAR ENDED JANUARY 2, 2005
OF METALDYNE CORPORATION

I, Timothy D. Leuliette, certify that:

1.	I have reviewed this annual report on Form 10-K of Metaldyne Corporation;

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

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

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

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

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

	c)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) 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 function):

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

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

Date: March 31, 2005				/s/ Timothy D. Leuliette
				Timothy D. Leuliette Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF JEFFREY M. STAFEIL
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
FORM 10-K FOR THE YEAR ENDED JANUARY 2, 2005
OF METALDYNE CORPORATION

I, Jeffrey M. Stafeil, certify that:

1.	I have reviewed this annual report on Form 10-K of Metaldyne Corporation;

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

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

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

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

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

	c)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) 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 function):

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

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

Date: March 31, 2005				/s/ Jeffrey M. Stafeil
				Jeffrey M. Stafeil Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(CHAPTER 63, TITLE 18 U.S.C. SECTION 1350(A) AND (B))

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. Section 1350(a) and (b)), each of the undersigned hereby individually certifies in his capacity as an officer of Metaldyne Corporation (the "Company") that the Annual Report of the Company on Form 10-K for the year ended January 2, 2005 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company at the end of and for the periods covered by such Report.

Date: March 31, 2005				/s/ Timothy D. Leuliette
				Timothy D. Leuliette Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(CHAPTER 63, TITLE 18 U.S.C. SECTION 1350(A) AND (B))

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. Section 1350(a) and (b)), each of the undersigned hereby individually certifies in his capacity as an officer of Metaldyne Corporation (the "Company") that the Annual Report of the Company on Form 10-K for the year ended January 2, 2005 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company at the end of and for the periods covered by such Report.

Date: March 31, 2005				/s/ Jeffrey M. Stafeil
				Jeffrey M. Stafeil Executive Vice President and Chief Financial Officer (Chief Accounting Officer and Authorized Signatory)