Edgar Filing: TOWER AUTOMOTIVE INC

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 2002

REGISTRATION NO. 333-85454
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2

TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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TOWER AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 41-1746238
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

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5211 CASCADE ROAD SE, SUITE 300
GRAND RAPIDS, MI 49546
(616) 802-1600
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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ANTHONY A. BARONE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
TOWER AUTOMOTIVE, INC.
5211 CASCADE ROAD SE, SUITE 300
GRAND RAPIDS, MI 49546
(616) 802-1600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO AGENT FOR
SERVICE, SHOULD BE SENT TO:

DENNIS M. MYERS, ESQ. RICHARD J. SANDLER, ESQ.
KIRKLAND & ELLIS JOSEPH A. HALL, ESQ.
200 EAST RANDOLPH DRIVE DAVIS POLK & WARDWELL
CHICAGO, ILLINOIS 60601 450 LEXINGTON AVENUE
(312) 861-2000 NEW YORK, NEW YORK 10017
(212) 450-4000

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PROSPECTUS (Subject to Completion)

Issued April 30, 2002

15,000,000 Shares

[TOWER AUTOMOTIVE LOGO]
COMMON STOCK
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Tower Automotive, Inc. is offering 15,000,000 shares of its common stock.

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Our common stock is listed on the New York Stock Exchange under the symbol
"TWR." On April 26, 2002, the reported last sale price of the common stock on
the New York Stock Exchange was $14.40 per share.

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INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 10.
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PRICE $ A SHARE
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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS COMPANY
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Per Share.................................. $ $ $
Total...................................... $ $ $

Tower Automotive has granted the underwriters the right to purchase an
additional 2,250,000 shares of common stock to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

Morgan Stanley & Co. Incorporated, on behalf of the underwriters, expects to
deliver the shares of common stock to purchasers on , 2002.
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MORGAN STANLEY
JPMORGAN
ROBERT W. BAIRD & CO.
SALOMON SMITH BARNEY
, 2002

[ILLUSTRATION DEPICTING THE PRINCIPAL PRODUCTS OF
TOWER AUTOMOTIVE]

TABLE OF CONTENTS

PAGE
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Prospectus Summary.................... 1
Tower Automotive...................... 1
The Offering.......................... 5
Summary Historical Financial Data..... 6
Risk Factors.......................... 8
Forward-Looking Statements............ 13
The Company........................... 14
Use of Proceeds....................... 17
Market Price for Common Stock......... 17
Dividend Policy....................... 17
Capitalization........................ 18
Selected Historical Financial Data.... 19
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 20
Business.............................. 34

PAGE
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Management............................ 46
Certain Relationships and Related
Transactions........................ 49
Security Ownership of Certain
Beneficial Owners and Management.... 50
Description of Capital Stock.......... 52
Description of Certain Financing
Arrangements........................ 54
Underwriters.......................... 59
Legal Matters......................... 61
Experts............................... 61
Where You Can Find Other
Information......................... 61
Incorporation of Certain Documents By
Reference........................... 62
Index to Financial Statements......... F-1

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In this prospectus, the terms "us," "we," "our" and "Tower Automotive"
refer to Tower Automotive, Inc., its consolidated subsidiaries and their
respective predecessors.

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WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT
FROM THAT CONTAINED IN, OR INCORPORATED BY REFERENCE IN, THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY,
SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE
PERMITTED.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
This summary is not complete and may not contain all of the information that you
should consider before deciding to invest in our common stock. We urge you to
read this entire prospectus carefully, including the "Risk Factors" section and
the consolidated financial statements and the notes to those statements.

TOWER AUTOMOTIVE

OUR COMPANY

We believe that, based on revenues, we are the largest independent global
supplier of automotive structural components and assemblies and the world's
leading supplier of full vehicle frames. We supply parts for substantially all
models produced by Ford, Honda and Toyota in North America. In addition, we also
supply DaimlerChrysler with substantially all of its full frame requirements for
its pickup trucks and sport utility vehicles, or "SUVs," and believe that we are
the largest supplier of frames, engine cradles, body structures and suspension
components to Ford. Our other major automotive original equipment manufacturer,
or "OEM," customers include General Motors, Nissan, Fiat, Hyundai/Kia, BMW,
Volkswagen Group and Isuzu. We currently employ more than 13,000 colleagues in
60 locations worldwide. Our principal products include body structures and
assemblies, lower vehicle structures, suspension modules and systems and
suspension components.

Since our inception in April 1993, our revenues have grown rapidly through
a focused strategy of internal growth and a highly disciplined acquisition
program. Since 1993, we have successfully completed 14 acquisitions and
established joint ventures in China, Mexico, Korea, Japan and the United States.
As a result of these acquisitions and internal growth, our revenues have
increased from approximately $86 million in 1993 to approximately $2.5 billion
in 2001. We have incurred significant indebtedness to finance our acquisitions
and joint ventures. As of December 31, 2001, we had $977.8 million of
indebtedness.

OUR INDUSTRY

We operate in the large and highly fragmented structural segment of the
automotive supply industry, which continues to undergo significant
consolidation. In order to lower costs and improve quality, OEMs are reducing
their supplier base by awarding sole-source contracts to full-service suppliers
who are able to supply larger portions of a vehicle on a global basis. OEMs'
criteria for supplier selection include not only cost, quality and
responsiveness, but also full-service design, engineering and program management
capabilities. OEMs are increasingly seeking suppliers capable of providing
complete systems or modules rather than suppliers who only provide separate
component parts. In addition, OEMs are increasingly requiring their suppliers to
have the capability to design and manufacture their products in multiple
geographic markets. As a full-service supplier with strong OEM relationships, we
expect to continue to benefit from these trends within the structural segment of
the automotive supply industry.

The automotive industry is highly cyclical and is dependent on consumer
spending. During the third and fourth quarters of 2000, OEMs reduced production
levels in response to a decline in consumer demand. The decline continued
throughout 2001 and resulted in a decline in our revenues

in 2001 as compared to 2000. In addition, because we have significant fixed
production costs, this decline in our customers' production levels had a
negative impact on our profitability in 2001. In response to this production
decline, we focused on reducing the capacity of the enterprise and improving the
efficiency of our continuing operations. These efforts resulted in restructuring
and asset impairment charges of $75.0 million, $383.7 million and $141.3 million
in the first quarter of 2002, and the fourth quarters of 2001 and 2000,
respectively. Including the impact of these charges, we reported net losses of
$35.0 million, $267.5 million and net income of $13.4 million for those periods.

OUR COMPETITIVE STRENGTHS

We have developed key competitive strengths that allow us to capitalize on
industry trends and provide us the opportunity to successfully execute our
operating and growth strategies. These key strengths include:

-- Our scale position as the largest independent supplier of automotive
structural components and assemblies, which enhances our ability to
successfully and profitably win new programs and increase our market
share of the expense of less capable suppliers;

-- Our comprehensive technical design and engineering support, which
helps us to minimize potential launch and manufacturing inefficiencies
as well as to optimize the amount and type of manufacturing capital
deployed for a given product, leading to lower-cost products for our
customers and improved profitability and returns on invested capital
for us.

-- We have formed strong relationships with our major OEM customers due
to our high level of product quality, engineering capabilities,
product design and customer service and, more recently, because of
our role as incumbent supplier on many critical programs.

-- We believe that we produce the largest array of structural products
in the automotive supply industry, are the only supplier able to
deliver a full range of structural components and assemblies on a
global basis and possess program management skills that enable us to
efficiently coordinate the sourcing of components produced by Tier II
suppliers and assemble these into complete modules.

OUR BUSINESS STRATEGY

Our strategy is to capitalize upon our position as the largest independent
global supplier of automotive structural components and assemblies in order to
take advantage of the opportunities arising from the consolidation,
globalization and modular sourcing trends in the automotive supply industry. The
ultimate goal of this strategy is to maximize return on invested capital and
create long-term value for shareholders. Key elements of our operating and
growth strategies are outlined below:

OPERATING STRATEGY

Continue to Optimize Manufacturing Efficiency and Quality. In order to
maximize return on invested capital, we increasingly employ flexible
manufacturing processes that allow us to maximize equipment utilization in
meeting customer expectations for product quality and timely delivery.

GROWTH STRATEGY

Our growth strategy comprises two fundamental elements: increased organic
growth and the pursuit of select strategic acquisitions, alliances and
partnerships. Since 1993, strategic acquisitions, alliances and partnerships
have contributed significantly to our growth. In the future, we expect an
increasing proportion of our growth to be derived organically.

Increase Organic Growth. We actively pursue increased organic growth from
both new and replacement vehicle programs for both existing and new customers.
It is our belief that our competitive strengths have played, and will continue
to play, an important role in achieving our organic growth objectives.

Pursue Strategic Acquisitions, Alliances and Partnerships. We continue to
believe that consolidation in the automotive supply industry will provide
further attractive opportunities to either acquire, or purchase a majority or
minority ownership interest in, companies that complement our existing business.

Our ability to implement our business strategy is subject to a number of
risks and uncertainties. For example, the automotive component supply industry
is highly competitive and some of our competitors are larger and have greater
financial and other resources than we do. We also may not realize all of the
revenue expected from new business awards since our customers generally have the
right to discontinue a program or replace us with another supplier at any time
for a variety of reasons. Part of our business strategy is to continue to
broaden our geographic coverage, which could increase the risks we face from
foreign operations. For more information, see "Risk Factors--Risk Factors
Relating to Tower Automotive and the Automotive Supply Industry."

RECENT DEVELOPMENTS

RECENT OPERATING RESULTS

On April 16, 2002, we announced our operating results for the first quarter
ended March 31, 2002. For the first quarter of 2002, revenues were $668 million,
compared with $628 million in the 2001 period. Net income for the first quarter
of 2002, adjusted for the restructuring and impairment charges and gain on sale
described below, was $12 million, or $0.25 per diluted share. Including the
after-tax effect of those one-time items, the reported net loss was $35 million
for the first quarter of 2002, or a loss of $0.72 per diluted share. This
compares with reported net income of $13 million, or earnings of $0.28 per
diluted share, in the first quarter of 2001.

The first quarter of 2002 included previously announced restructuring and
asset impairment charges of $75 million (or a charge of $1.01 per diluted share
after-tax) associated with the closure of our Milwaukee Press Operations
facility. Additionally, we realized a gain of $3.8 million (or

income of $0.05 per diluted share after-tax) on the sale to a Hyundai affiliate
of our Iwahri, Korea plant that assembles the Kia Sportage lower vehicle module.
This plant had sales of approximately $139 million in 2001 and operating income
of approximately $0.5 million. We will continue to manufacture body structure
components in Korea, including those components used in the Sportage lower
vehicle module.

In the first quarter of 2002, we also adopted the requirements of Statement
of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets," and as a result no longer record amortization expense of our goodwill.
In the first quarter of 2001, net income of $13 million included an after-tax
charge of $3.5 million related to goodwill amortization expense.

These unaudited results for the quarter ended March 31, 2002 reflect all
adjustments (consisting only of normal recurring adjustments) that management
considers necessary for a fair presentation of the financial information for
this period. The results of operations for the quarter ended March 31, 2002 are
not necessarily indicative of the results of operations that may be expected for
the full year.

MATTERS PERTAINING TO ARTHUR ANDERSEN LLP

Our independent certified public accountant, Arthur Andersen LLP, has
informed us that on March 14, 2002, it was indicted on federal obstruction of
justice charges arising from the government's investigation of Enron Corp.
Arthur Andersen has indicated that it intends to contest vigorously the
indictment. Our Audit Committee has been carefully monitoring this situation. As
a public company, we are required to file with the SEC periodic financial
statements audited or reviewed by an independent, certified public accountant.
The SEC has said that it will continue accepting financial statements audited by
Arthur Andersen, and interim financial statements reviewed by it, so long as
Arthur Andersen is able to make certain representations to its clients. Our
access to the capital markets and our ability to make timely SEC filings could
be impaired if the SEC ceases accepting financial statements audited by Arthur
Andersen, if Arthur Andersen becomes unable to make the required representations
to us or if for any other reason Arthur Andersen is unable to perform required
audit-related services for us. In such a case, we would promptly seek to engage
new independent certified public accountants or take such other actions as may
be necessary to enable us to maintain access to the capital markets and timely
financial reporting.

THE OFFERING

Common stock offered...................... 15,000,000 shares
Common stock to be outstanding immediately
after the offering...................... 63,222,012 shares
Use of proceeds........................... We estimate that our net proceeds from the
offering will be approximately $204.2 million,
based on an assumed public offering price of
$14.40 per share. We will use the net proceeds
from the offering to repay borrowings under our
senior credit facility. See "Use of Proceeds."
NYSE symbol............................... TWR

The number of shares that will be outstanding after the offering is based
on the number of shares outstanding as of March 15, 2002, and excludes:

-- 7,600,000 shares of common stock reserved for issuance under our
stock option plan and employee stock discount purchase plans, of
which options to purchase 2,998,770 shares were outstanding;

-- 15,926 shares issuable upon the conversion of notes issued in
connection with the acquisition of Edgewood Tool and Manufacturing
Company and its affiliate, Ann Arbor Assembly Corporation, which we
collectively refer to as "Edgewood;"

-- 8,424,908 shares issuable upon conversion of our 6 3/4% Convertible
Trust Preferred Securities; and

-- 7,728,850 shares of issuable upon conversion of our 5% Convertible
Subordinated Notes due 2004.

Unless we specifically state otherwise, the information in this prospectus
does not take into account the issuance of up to 2,250,000 shares of common
stock which the underwriters have the option to purchase solely to cover
over-allotments. If the underwriters exercise their over-allotment option in
full, 65,472,012 shares of common stock will be outstanding after the offering.

ADDITIONAL INFORMATION

We were incorporated under the laws of Delaware in April 1993. Our
principal executive offices are located at 5211 Cascade Road SE, Suite 300,
Grand Rapids, Michigan 49546, and our telephone number is (616) 802-1600.

SUMMARY HISTORICAL FINANCIAL DATA

The following information is qualified in its entirety by our consolidated
financial statements. The following summary consolidated financial data for and
as of the end of each of the years in the five-year period ended December 31,
2001, is derived from Tower Automotive's consolidated financial statements,
which have been audited by Arthur Andersen LLP, independent public accountants.
The consolidated financial statements at December 31, 2000 and 2001 and for each
of the three years in the period ended December 31, 2001 and the report of
independent public accountants thereon are included elsewhere in this
prospectus. The consolidated financial statements at December 31, 1997, 1998 and
1999 and for the years ended December 31, 1997 and 1998 are not included herein.
The following summary consolidated financial information should be read in
conjunction with "Selected Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements of Tower Automotive and the related notes thereto.

YEAR ENDED DECEMBER 31,
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2001 2000 1999 1998 1997
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(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

INCOME STATEMENT DATA:
Revenues.......................... $2,467,433 $2,531,953 $2,170,003 $1,836,479 $ 1,235,829
Cost of sales..................... 2,190,248 2,160,359 1,823,103 1,562,167 1,058,720
Selling, general and
administrative expense......... 139,203 137,003 105,950 85,169 57,869
Amortization expense.............. 24,804 21,517 15,803 13,472 9,537
Restructuring and asset impairment
charge......................... 383,739 141,326 -- -- --
Operating income (loss)........... (270,561) 71,748 225,147 175,671 109,703
Interest expense, net............. 73,765 64,711 37,981 40,318 28,962
Provision (benefit) for income
taxes.......................... (73,312) 2,619 74,866 54,143 32,290
Net income (loss)................. (267,524) 13,434 117,088 88,040 46,244
Basic earnings (loss) per share... $ (5.87) $ 0.29 $ 2.50 $ 1.91 $ 1.14
Diluted earnings (loss) per
share.......................... $ (5.87) $ 0.28 $ 2.10 $ 1.68 $ 1.09
OTHER DATA:
Capital expenditures, net......... $ 193,955 $ 93,588 $ 197,315 $ 185,138 $ 117,379
Depreciation and amortization..... 159,893 144,805 111,611 87,372 47,966
EBITDA(1)......................... (110,668) 216,553 336,758 263,043 157,669
Adjusted EBITDA(2)................ 273,071 357,879 336,758 263,043 157,669
Cash provided by (used in):
Operating activities........... 513,815 92,648 212,003 221,098 100,904
Investing activities........... (199,373) (266,782) (583,894) (267,401) (1,006,949)
Financing activities........... (296,048) 173,890 372,074 49,737 866,449
Working capital................... (379,785) 78,753 126,940 106,936 140,592

AS OF DECEMBER 31, 2001
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AS
ACTUAL ADJUSTED(3)
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BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 21,767 $ 21,767
Working capital............................................. (379,785) (379,785)
Total assets................................................ 2,533,436 2,532,813
Long-term debt.............................................. 805,688 601,488
Mandatorily redeemable trust preferred securities........... 258,750 258,750
Stockholders' investment.................................... 447,408 650,985

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(1) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations, as determined by generally accepted accounting
principles, and our calculation thereof may not be comparable to that
reported by other companies. We believe that it is widely accepted that
EBITDA provides useful information regarding a company's ability to service
and/or incur indebtedness. This belief is based on our negotiations with our
lenders who have indicated that the amount of indebtedness we will be
permitted to incur will be based, in part, on our EBITDA. EBITDA does not
take into account our working capital requirements, debt service
requirements and other commitments and, accordingly, is not necessarily
indicative of amounts that may be available for discretionary use.

(2) "Adjusted EBITDA" is EBITDA plus restructuring and asset impairment charges.

(3) Adjusted to reflect the sale of 15,000,000 shares of common stock and the
application of the net proceeds as set forth under "Use of Proceeds."

RISK FACTORS

Before purchasing any of the shares covered by this prospectus, you should
carefully read and consider the risk factors set forth below. You should be
prepared to accept the occurrence of any and all of the risks associated with
purchasing the shares, including a loss of all of your investment.

RISKS RELATING TO TOWER AUTOMOTIVE AND THE AUTOMOTIVE SUPPLY INDUSTRY

WE ARE DEPENDENT ON FORD AND DAIMLERCHRYSLER AS OUR LARGEST CUSTOMERS AND ON
SELECTED VEHICLE PROGRAMS

We are dependent on Ford and DaimlerChrysler as our largest customers. Our
revenues from Ford and DaimlerChrysler represented approximately 35% and 25%,
respectively, of our revenues in 2001. The contracts we typically enter into
with our customers, including Ford, DaimlerChrysler and GM, provide for
supplying the customer's requirements for a particular vehicle platform or
model, rather than for manufacturing a specific quantity of components. These
contracts range from one year to the life of the platform or model, usually
three to ten years, and do not require the purchase by the customer of any
minimum number of components. Therefore, any significant reduction in demand for
vehicles manufactured by Ford or DaimlerChrysler for which we produce components
and assemblies or for certain other key vehicle models or a group of related
vehicle models sold by any of our other major customers could have a material
adverse effect on our existing and future revenues and net income.

AUTOMOTIVE OEMS HAVE HISTORICALLY HAD SIGNIFICANT LEVERAGE OVER THEIR OUTSIDE
SUPPLIERS

The automotive component supply industry is fragmented and serves a limited
number of automotive OEMs. As a result, OEMs have historically had a significant
amount of leverage over their outside suppliers. For example, outside suppliers
such as us are subject to substantial continuing pressure from the major OEMs to
reduce the cost of their products. If we are unable to generate sufficient
production cost savings in the future to offset price reductions, our gross
margin and profitability would be adversely affected. In addition, OEMs can
unexpectedly change their purchasing policies or payment practices, which could
have a negative impact on our short-term working capital.

CYCLICALITY AND SEASONALITY IN THE AUTOMOTIVE MARKET COULD ADVERSELY AFFECT OUR
REVENUES AND NET INCOME

The automotive market is highly cyclical and is dependent on consumer
spending. For example, during the third and fourth quarters of 2000, OEMs
reduced production levels in response to a decline in consumer demand. The
decline continued throughout 2001. Economic factors adversely affecting
automotive production and consumer spending could adversely impact our revenues
and net income. For example, production cuts by Ford, DaimlerChrysler and GM in
2001 have adversely affected our revenues and net income. Our revenues in 2001
declined by approximately $64.5 million, or 2.5%, compared to our revenues in
2000. In addition, because we have significant fixed production costs,
relatively modest declines in our customers' production levels can have a
significant adverse impact on our profitability. Our gross margin has declined
from 16.0% in 1999 to 14.7% in 2000 and 11.2% in 2001 primarily as a result of
these lower production levels.

Our business is also somewhat seasonal. We typically experience decreased
revenue and operating income during the third calendar quarter of each year due
to the impact of scheduled OEM plant shutdowns in July and August for vacations
and new model changeovers.

WE ARE SUBJECT TO CERTAIN RISKS ASSOCIATED WITH OUR FOREIGN OPERATIONS THAT
COULD HARM OUR REVENUES AND PROFITABILITY

We have significant international operations, specifically in Europe, Asia
and South America. Certain risks are inherent in international operations,
including:

-- we may have difficulty enforcing agreements and collecting
receivables through certain foreign legal systems;

-- foreign customers may have longer payment cycles than customers in
the United States;

-- tax rates in certain foreign countries may exceed those in the United
States, and foreign earnings may be subject to withholding
requirements or the imposition of tariffs, exchange controls or other
restrictions;

-- general economic and political conditions in countries where we
operate may have an adverse effect on our operations in those
countries;

-- we may find it difficult to manage a large organization spread
throughout various countries; and

-- we may find it difficult to comply with foreign laws and regulations.

As we continue to expand our business globally, our success will depend, in
part, on our ability to anticipate and effectively manage these and other risks.
The occurrence of any of the foregoing risks could have a significant effect on
our international operations and, as a result, our revenues and profitability.

CURRENCY EXCHANGE RATE FLUCTUATIONS COULD HAVE AN ADVERSE EFFECT ON OUR REVENUES
AND FINANCIAL RESULTS

We generate a significant portion of our revenues and incur a significant
portion of our expenses in currencies other than U.S. dollars. To the extent
that we are unable to match revenues received in foreign currencies with costs
paid in the same currency, exchange rate fluctuations in any such currency could
have an adverse effect on our revenues and financial results. For example, the
weakening of European currencies in relation to the U.S. dollar had a negative
impact on our revenues in 2000 and 2001.

OUR BUSINESS MAY BE DISRUPTED SIGNIFICANTLY BY WORK STOPPAGES AND OTHER LABOR
MATTERS

Many OEMs and their suppliers have unionized work forces. Work stoppages or
slow-downs experienced by OEMs or their suppliers could result in slow-downs or
closures of assembly plants where our products are included in assembled
vehicles. For example, strikes by The International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America ("UAW") led to the
shutdown of most of GM's North American assembly plants in June and July of
1998. We estimate that this work stoppage at GM's facilities had an unfavorable
impact of approximately $24.7 million on our 1998 revenues. In the event that
one or more of our customers experiences a material work stoppage, such a work
stoppage could have a material adverse effect on our business.

In addition, approximately 5,300 of our colleagues are unionized
(representing approximately 41% of our colleagues as of December 31, 2001). We
may encounter strikes, further unionization efforts or other types of conflicts
with labor unions or our colleagues, any of which could have an adverse effect
on our ability to produce our structural components and assemblies or may limit
our flexibility in dealing with our workforce.

OUR OPERATING RESULTS MAY BE ADVERSELY AFFECTED BY THE IMPACT OF ENVIRONMENTAL
AND SAFETY REGULATIONS TO WHICH WE ARE SUBJECT

We are subject to foreign, federal, state, and local laws and regulations
governing the protection of the environment and occupational health and safety,
including laws regulating the generation, storage, handling, use and
transportation of hazardous materials; the emission and discharge of hazardous
materials into the soil, ground or air; and the health and safety of our
colleagues. We are also required to obtain permits from governmental authorities
for certain operations. It is possible that we may not have been or may not be
at all times in complete compliance with such laws, regulations and permits. If
we violate or fail to comply with these laws, regulations or permits, we could
be fined or otherwise sanctioned by regulators. In some instances, such a fine
or sanction could be material.

We are also subject to laws imposing liability for the cleanup of
contaminated property. Under these laws, we could be held liable for costs and
damages relating to contamination at our past or present facilities and at third
party sites to which these facilities sent waste containing hazardous
substances. The amount of such liability could be material.
9

OUR INABILITY TO COMPETE EFFECTIVELY IN THE HIGHLY COMPETITIVE AUTOMOTIVE SUPPLY
INDUSTRY COULD RESULT IN THE LOSS OF CUSTOMERS, WHICH COULD HAVE AN ADVERSE
EFFECT ON OUR REVENUES AND OPERATING RESULTS

The automotive component supply industry is highly competitive. Some of our
competitors are companies, or divisions or subsidiaries of companies, that are
larger and have greater financial and other resources than we do. In addition,
with respect to certain of our products, we compete with divisions of our OEM
customers. Our products may not be able to compete successfully with the
products of these other companies, which could result in the loss of customers
and, as a result, decreased revenues and profitability. In addition, our
competitive position in the automotive component supply industry could be
adversely affected in the event that we are unsuccessful in making strategic
acquisitions or establishing joint ventures that will enable us to continue to
expand our global presence.

We principally compete for new business both at the beginning of the
development of new models and upon the redesign of existing models by our major
customers. New model development generally begins two to five years prior to the
marketing of such models to the public. The failure to obtain new business on
new models or to retain or increase business on redesigned existing models could
adversely affect our business and financial results. In addition, as a result of
the relatively long lead times required for many of our complex structural
components, it may be difficult in the short-term for us to obtain new sales to
replace any unexpected decline in the sale of existing products. We may incur
significant expense in preparing to meet anticipated customer requirements which
may not be recovered.

WE MAY NOT REALIZE ALL OF THE REVENUE EXPECTED FROM NEW PROGRAM AWARDS

The realization of additional revenues from new program awards is
inherently subject to a number of important risks and uncertainties, including
the number of vehicles that our customers will actually produce as well as the
timing of such production. In addition, our customers generally have the right
to discontinue a program or replace us with another supplier at any time for a
variety of reasons. As a result, all of the expected $760 million in annual new
program revenue, resulting from business awarded to us in 2001, and anticipated
to be fully realized by 2005, may not actually result in firm orders from
customers. We also incur costs and make capital expenditures for new program
awards based upon certain estimates of production volumes for certain vehicles.
While we attempt to establish the price of our products for variances in
production volumes, if the actual production of certain vehicle models is
significantly less than planned, our revenues and net income may be adversely
affected. We cannot predict our customers' demands for the products we supply
either in the aggregate or for particular reporting periods.

WE REQUIRE A SIGNIFICANT AMOUNT OF CASH TO SERVICE OUR INDEBTEDNESS, WHICH
REDUCES THE CASH AVAILABLE TO FINANCE OUR ORGANIC GROWTH AND OUR STRATEGIC
ACQUISITIONS, ALLIANCES AND PARTNERSHIPS

We have a significant amount of indebtedness. As of December 31, 2001, our
total indebtedness including current maturities was $977.8 million, and we had
the ability to borrow an additional $103.0 million under our revolving credit
facility. Our required debt service payments under our senior credit facility
during 2002, 2003 and 2004 are $55.0 million, $70.0 million and $70.0 million,
respectively.

Our ability to make payments on our indebtedness, as well as to fund our
operations and future growth, depends upon our ability to generate cash. Our
success in doing so depends upon the results of our operations and upon general
economic, financial, competitive, and other factors beyond our control.

Our indebtedness could:

-- make us more vulnerable to unfavorable economic conditions;

-- make it more difficult to pursue strategic acquisitions, alliances
and partnerships;

-- require us to dedicate or reserve a large portion of our cash flow
from operations to making payments on our indebtedness, which would
prevent us from using it for other purposes; and

-- make us susceptible to fluctuations in market interest rates that
affect the cost of our borrowings to the extent not covered by
interest rate hedge agreements because a portion of our indebtedness
is payable at variable rates.

RISKS RELATED TO OUR COMMON STOCK

SHARES ELIGIBLE FOR FUTURE SALE MAY CAUSE THE MARKET PRICE FOR OUR COMMON STOCK
TO DROP SIGNIFICANTLY, EVEN IF OUR BUSINESS IS DOING WELL

Future sales of our common stock or the availability of shares for future
sale may have an adverse effect on the market price of our common stock from
time to time. As of March 15, 2002, we had outstanding 48,222,012 shares of our
common stock. Substantially all of these shares are either freely tradable in
the public market, unless acquired by our affiliates, or are "restricted
securities" as that term is defined in Rule 144 under the Securities Act and
eligible for immediate sale in the public market pursuant to Rule 144, subject
to certain volume and manner of sale limitations. As of December 31, 2001,
options to purchase an aggregate of 2,998,770 shares of our common stock were
outstanding under our stock option plans. Other shares of our common stock
issued in the future may become available for resale in the public market from
time to time, and the market price of shares of our common stock could drop
significantly if the holders of these shares sell them or are perceived by the
market as intending to sell them.

ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER AND STATUTORY PROVISIONS

Our certificate of incorporation and by-laws contain provisions which (1)
permit us to issue so-called "flexible" preferred stock, (2) limit the filling
of board vacancies to the remaining directors, and (3) limit stockholders'
ability to call special meetings. We are also subject to Section 203 of the
Delaware General Corporation Law, or DGCL, which restricts us from engaging in
certain business combinations with "interested stockholders." Although not
intended, the foregoing provisions may adversely affect the marketability of the
common stock by discouraging potential investors from acquiring our common
stock. In addition, these provisions could make more difficult a merger, tender
offer or proxy contest involving us, or impede an attempt to acquire a
significant or controlling interest in us, even if such events might be
beneficial to us and our stockholders. See "Description of Capital Stock."

POSSIBLE VOLATILITY OF OUR SHARE PRICE INCREASES THE RISK OF YOUR INVESTMENT

The market price for our common stock may be significantly affected by
factors such as the announcement of new program awards or other strategic
initiatives by us or our competitors, technological innovations by us or our
competitors, the growth and expansion of our business, trends and uncertainties
affecting the automotive supply industry as a whole, issuances and repurchases
of common stock, quarterly variations in our operating results or the operating
results of our competitors, investors' expectations of our prospects, changes in
earnings estimates by analysts or reported results that vary materially from
such estimates and general economic and other conditions, including the
cyclicality and seasonality of our business. In addition, in recent years global
equity markets have experienced extreme price fluctuations. This volatility has
had a substantial effect on the market prices of securities issued by many
companies for reasons unrelated to the operating performance of the specific
companies. These broad market fluctuations may adversely effect the market price
of our common stock. See "Market Price for Common Stock."

RESTRICTIONS IN OUR SENIOR CREDIT FACILITY AND OTHER DEBT INSTRUMENTS MAY LIMIT
OUR ABILITY TO PAY DIVIDENDS, INCUR ADDITIONAL DEBT, MAKE ACQUISITIONS AND MAKE
OTHER INVESTMENTS

Our senior credit facility and other debt instruments contain covenants
that restrict our ability to make distributions to stockholders or other
payments unless we satisfy certain financial tests and comply with various
financial ratios. If we do not do so, our creditors could declare a default
under our debt instruments, and our indebtedness could be declared immediately
due and payable. Our ability to comply with the provisions of our debt
instruments may be affected by changes in economic or business conditions beyond
our control. See "Dividend Policy."

Our senior credit facility and other debt instruments also contain
covenants that limit our ability to incur additional indebtedness, acquire other
businesses and make capital expenditures, and impose various other restrictions,
including certain coverage ratios which restrict our ability to borrow under our
revolving credit facility. At December 31, 2001, we had borrowed approximately
$101 million under our $825 million revolving credit facility but as a result of
such coverage ratio restrictions, our unused availability under the revolving
facility was limited to approximately $103 million. These covenants could affect
our ability to operate our business and may limit our ability to take advantage
of potential business opportunities as they arise. See "Description of Certain
Financing Arrangements."

OUR EARNINGS COULD DECLINE IF WE WRITE-OFF GOODWILL

As a result of purchase accounting for our various acquisitions, we have
accumulated a substantial amount of goodwill, amounting to $567.1 million as of
December 31, 2001. During 2001, we recorded goodwill and long-lived asset
impairment writedown provisions of $333.0 million, which largely resulted from
the downturn in the automotive market and the resulting restructuring of our
operations. Due to new accounting standards that went into effect on January 1,
2002, goodwill and other intangible assets with indefinite lives are not
amortized but rather tested for impairment annually. As a result, we are
currently in the process of performing our initial goodwill impairment review
under these new accounting standards. We expect to complete this initial review
during the second quarter of 2002 and if we determine that significant
impairment has occurred, we would be required to write-off the impaired portion
of goodwill, which would be recorded as a cumulative effect adjustment effective
as of January 1, 2002. Preliminary indications suggest that we will record a
transitional impairment charge in the range of $100 million to $200 million.
However, we are in the process of hiring an independent appraiser to assist us
in finalizing the amount of the charge we will take, if any. It is possible that
the amount of any charge that we take after completing the formal appraisal
process may not fall within the range suggested by our preliminary analysis. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Recently Issued Accounting Pronouncements."

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that are subject to
risks and uncertainties. You should not place undue reliance on those statements
because they only speak as of the date of this prospectus. Forward-looking
statements include information concerning our possible or assumed future results
of operations, including descriptions of our business strategy. These statements
often include words such as "believe," "expect," "anticipate," "intend," "plan,"
"estimate," or similar expressions. These statements are based on assumptions
that we have made in light of our experience in the industry as well as our
perceptions of historical trends, current conditions, expected future
developments and other factors we believe are appropriate under the
circumstances. As you read and consider this prospectus, you should understand
that these statements are not guarantees of performance or results. They involve
risks, uncertainties and assumptions. Although we believe that these
forward-looking statements are based on reasonable assumptions, you should be
aware that many factors could affect our actual financial results or results of
operations and could cause actual results to differ materially from those in the
forward-looking statements. These factors include:

-- the degree to which we are leveraged;

-- our reliance on major customers and selected models;

-- the cyclicality and seasonality of the automotive market;

-- the failure to realize the benefits of recent acquisitions and joint
ventures;

-- obtaining new business on new and redesigned models;

-- our ability to continue to implement our acquisition strategy;

-- the ability to achieve the anticipated volume of production from new
and planned supply programs;

-- general economic or business conditions affecting the automotive
industry (which is dependent on consumer spending), either nationally
or regionally, being less favorable than expected;

-- our failure to develop or successfully introduce new products;

-- increased competition in the automotive components supply market;

-- unforeseen problems associated with international sales, including
gains and losses from foreign currency exchange;

-- implementation of or changes in the laws, regulations or policies
governing the automotive industry that could negatively affect the
automotive components supply industry;

-- changes in general economic conditions in the United States and
Europe; and

-- various other factors beyond our control.

All future written and oral forward-looking statements by us or persons
acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to above. Except for our ongoing obligations to
disclose material information as required by the federal securities laws, we do
not have any obligation or intention to release publicly any revisions to any
forward-looking statements to reflect events or circumstances in the future or
to reflect the occurrence of unanticipated events. YOU SHOULD ALSO READ
CAREFULLY THE FACTORS DESCRIBED IN THE "RISK FACTORS" SECTION OF THIS
PROSPECTUS.

THE COMPANY

Set forth below is a brief summary of our significant strategic
acquisitions, divestitures and investments in joint ventures since 1993:

Presskam. In November 2000, we completed the acquisition of Strojarne
Malacky, a.s. ("Presskam"), a manufacturer of upper body structural assemblies
for Volkswagen, Porsche and Skoda, located near Bratislava, Slovakia. We paid
total consideration of approximately $10 million for Presskam and intend to use
the investment to further support Volkswagen's Bratislava assembly operation.

Yorozu. In September 2000, we acquired a 17% equity interest in Yorozu
Corporation ("Yorozu"), a supplier of suspension modules and structural parts to
the Asian and North American automotive markets, from Nissan Motor Co. Ltd.
("Nissan"). Yorozu is based in Japan and is publicly traded on the first tier of
the Tokyo Stock Exchange. Its principal customers include Nissan, Auto Alliance,
General Motors, Ford, and Honda. We will pay Nissan approximately $38 million
over two and one half years for the 17% interest. In conjunction with the
original investment, we had an option to increase our holdings in Yorozu by
13.8% through the purchase of additional Yorozu shares. In February 2001, we
exercised the right to purchase the additional equity interest and will pay
Nissan approximately $30 million over two and one half years for the additional
13.8% interest. The remaining obligation to Nissan, as of December 31, 2001, was
$29.5 million, and is recorded as indebtedness on our balance sheet. The price
we paid for the Yorozu equity interest is higher than the current trading price
of Yorozu shares on the Tokyo Stock Exchange. We periodically assess our
investment in Yorozu to determine the proper carrying value for the investment
in our financial statements. Our periodic assessment of value takes into account
market value of shares, operating performance and the company's book or
liquidation value in ascertaining whether an other than temporary impairment has
occurred in the investment. Based on this assessment we do not believe at this
time that our investment in Yorozu has suffered an other than temporary
impairment.

Caterina. In July 2000, we acquired the remaining 60% equity interest in
Metalurgica Caterina S.A. ("Caterina") for approximately $42 million. The
initial 40% interest was acquired in March 1998 for approximately $48 million.
Caterina is a supplier of structural stampings and assemblies to the Brazilian
automotive market. This investment (1) provided Tower Automotive with a
substantial manufacturing presence in one of the fastest growing automotive
markets in the world and (2) added Volkswagen and Mercedes-Benz as new customers
in Brazil.

Algoods. In May 2000, we acquired all of the outstanding common stock of
Algoods, Inc. ("Algoods") for total consideration of approximately $33 million.
Algoods manufactures aluminum heat shields and impact discs for the North
American automotive industry from aluminum mini-mill and manufacturing
operations located in Toronto, Canada. Its primary customer is DaimlerChrysler.
The acquisition of Algoods represents a significant investment in processing
technology for lightweight materials which complements our existing heat shield
capabilities and provides opportunities for application in other lightweight
vehicle structural products.

Dr. Meleghy. In January 2000, we acquired all of the outstanding shares of
Dr. Meleghy GmbH & Co. KG Werkzeugbau und Presswerk, Bergisch Gladbach ("Dr.
Meleghy") for approximately $86 million. Dr. Meleghy designs and produces
structural stampings, exposed surface panels and modules for the European
automotive industry. Dr. Meleghy also designs and manufactures tools and dies
for use in its production and for the external market. Dr. Meleghy operates
three facilities in Germany and one facility in each of Hungary and Poland. Dr.
Meleghy's principal customers include DaimlerChrysler, Audi, Volkswagen, Ford,
Opel and BMW. Products offered by Dr. Meleghy include body side panels, floor
pan assemblies, and miscellaneous structural stampings. Under the original
purchase agreement, we have paid an additional $29.6 million for this
acquisition based on Dr. Meleghy achieving certain operating targets in 2000.

Seojin. In October 1999, we invested $21 million for new shares
representing a 49% equity interest in Seojin Industrial Company Limited
("Seojin"). Seojin is a supplier of frames, modules and structural components to
the Korean automotive industry. In addition, we advanced $19 million to Seojin
in exchange for variable rate convertible bonds due October 30, 2009. The bonds
are unsecured and rank equally with all other present and future obligations of
Seojin. Interest on the bonds is payable annually beginning October 30, 2000 and
each October 30 thereafter until maturity. Under the joint venture investment
agreement, we had the right to convert the bonds into common stock of Seojin any
time on or after October 30, 2000. The conversion rate is based upon a
predetermined formula that increases our equity interest to approximately 66%.
On October 31, 2000, we exercised our right to convert the bonds into 17% of the
common stock of Seojin. Based upon the formula for conversion of the Seojin
variable rate convertible bonds, we paid $1.2 million for the additional equity
interest.

Active. In July 1999, we acquired all of the outstanding stock of Active
Tool Corporation and Active Products Corporation (collectively, "Active") for
total approximate consideration of $315 million. Active, which has five
facilities, designs and produces a variety of large unexposed structural
stampings, exposed surface panels, and modules to the North American automotive
industry. Active's main customers include DaimlerChrysler, Ford, General Motors,
and Saturn. Products offered by Active include body sides, pick-up box sides,
fenders, floor pan assemblies, door panels, pillars, and heat shields. The
acquisition of Active enhances our ability to manufacture large and complex
structures, as well as exposed surface panels.

IMAR and OSLAMT. In July 1998, we acquired IMAR s.r.l. ("IMAR") and OSLAMT
S.p.A. ("OSLAMT"). IMAR designs and manufactures structural parts and assemblies
from two facilities in Italy, primarily for Fiat. OSLAMT designs and
manufactures tools and assemblies for the automotive market from its facility in
Turin, Italy. The purchase price consisted of approximately $32 million cash
plus the assumption of approximately $17 million of indebtedness. Under the
acquisition agreement, we also paid an additional amount of $15 million, based
on the achievement of certain operating targets.

Metalsa. In October 1997, we acquired a 40% equity interest in Metalsa S.
de R.L. ("Metalsa"). In addition, we have entered into a technology sharing
arrangement which will allow us to utilize the latest available product and
process technology. Metalsa is the largest supplier of vehicle frames and
structures in Mexico. We paid approximately $120 million for our equity interest
with an additional amount of up to $45 million payable based upon Metalsa's net
earnings through December 31, 2000. Through February 2002, we have paid
approximately $26 million under the earnout provisions of the joint venture
investment agreement.

SIMES. In May 1997, we acquired Societa Industria Meccanica e Stampaggio
S.p.A. ("SIMES"), an Italian automotive parts manufacturer, for approximately
$51 million in cash, plus an additional $3 million based on achievement by SIMES
of certain operating targets following the acquisition. The acquisition of SIMES
(1) significantly expanded our global capabilities by providing us with a
manufacturing presence in Europe, (2) added Fiat as a new customer and (3)
enhanced our design and engineering capabilities.

APC. In April 1997, we acquired Automotive Products Company ("APC") from
A.O. Smith Corporation for approximately $700 million in cash. APC is a leading
designer and producer of structural and suspension components for the
automotive, light truck and heavy truck markets. We believe that the acquisition
of APC provided several strategic benefits, including:

-- expanded product offerings and modular product opportunities;

-- increased customer penetration within each of the three major North
American OEMs and within certain foreign OEMs with manufacturing
operations in North America;

-- increased penetration in the light truck segment and other key
models;

-- complementary new technology;

-- opportunities to reduce costs and improve operational efficiency; and

-- an expanded presence in China, Japan and South America, which
complemented our current European initiatives to provide expanded
global production capabilities for both North American and
international OEMs.

MSTI. In May 1996, we acquired MascoTech Stamping Technologies, Inc.
("MSTI") from MascoTech, Inc. ("MascoTech") for approximately $79 million, plus
an additional $30 million in earnout payments as certain operating targets were
achieved by the MSTI facilities in the first three years following the
acquisition. The MSTI acquisition:

-- expanded our product capabilities into chassis and suspension
components;

-- provided chassis and suspension technology as well as value-added
processing technologies including assembling, painting and welding;
and

-- increased our content per vehicle on key light truck and sport
utility vehicles such as the Ford F-Series, Explorer and Windstar and
the Dodge Ram and Dakota as well as on high volume passenger cars
such as the Ford Taurus/Sable.

J.L. French. In October 1999, we loaned $30 million to J.L. French
Automotive Castings, Inc., ("J.L. French") in exchange for a convertible
subordinated promissory note due October 14, 2009. In November 2000, we
exercised our option to convert the note into 7,124 shares of Class A "1" Common
Stock and invested an additional $2.9 million through the purchase of Class P
Common Stock. In May 2000, we invested an additional $11.0 million through the
purchase of Class A Common Stock. During the fourth quarter of 2001, we
evaluated our investment in J.L. French and determined it was impaired and
therefore, recorded a charge of $46.3 million to write off our entire investment
in J.L. French.

Roanoke Heavy Truck Business. In December 2000, we sold our Roanoke,
Virginia heavy truck rail manufacturing business to our joint venture partner,
Metalsa, for net proceeds of approximately $55 million, which approximated the
book value of the net assets sold, plus an earnout of up to $30 million based on
achieving certain profit levels over the next three years. The net proceeds were
used to repay outstanding indebtedness under the revolving credit facility.

USE OF PROCEEDS

The net proceeds from this offering are estimated to be approximately
$204.2 million, or approximately $235.0 million if the underwriters exercise
their over-allotment option in full. We expect to use the net proceeds to reduce
our term loan borrowings under our senior credit facility.

Our senior credit facility has a scheduled final maturity of July 2006. The
senior credit facility bears interest at a rate per annum equal to the financial
institutions' reference rate, LIBOR, or the Eurodollar rate plus a margin
ranging from 0 to 200 basis points depending on the ratio of the consolidated
funded debt for our restricted subsidiaries to our total EBITDA (as defined in
the senior credit facility). The weighted average interest rate for such
borrowing was 7.0% for the year ended December 31, 2001. Borrowings under our
term loan were used to refinance indebtedness incurred in connection with
previous acquisitions.

In order to borrow under our $825 million revolving credit facility, we
must meet certain covenant ratios. Based on these covenants, the amount of
unused availability under the revolving facility was approximately $103 million
at December 31, 2001. Assuming we had completed this offering and used the net
proceeds to reduce our term loan borrowings under our senior credit facility as
of December 31, 2001, we would have had approximately $307.2 million, or
approximately $338.0 million if the underwriters exercised their over-allotment
option in full, of unused availability under the revolving facility. We expect
to continue to incur borrowings under our revolving credit facility from time to
time for general corporate and working capital purposes. We do not have the
ability to reborrow amounts repaid under the term loan.

MARKET PRICE FOR COMMON STOCK

Our common stock is traded on the NYSE under the symbol "TWR." The
following table sets forth, for the periods indicated, the high and low closing
sale prices for the common stock on the NYSE.

LOW HIGH
------ ------

2000
First Quarter............................................... $11.63 $17.50
Second Quarter.............................................. 11.63 17.63
Third Quarter............................................... 9.13 13.56
Fourth Quarter.............................................. 7.13 11.00
2001
First Quarter............................................... $ 8.50 $11.65
Second Quarter.............................................. 8.70 11.21
Third Quarter............................................... 7.01 14.71
Fourth Quarter.............................................. 5.90 9.65
2002
First Quarter............................................... $ 8.19 $14.00
Second Quarter (through April 26, 2002)..................... 12.73 15.21

The reported last sale price of the common stock on the NYSE as of a recent
date is set forth on the cover page of this prospectus. As of March 15, 2002,
there were approximately 2,893 holders of record of our outstanding common
stock.

DIVIDEND POLICY

During the last five years, we have not paid any cash dividends on our
common stock. We have no current intention of paying any cash dividends on our
common stock in 2002. Our ability to pay cash dividends on our common stock is
dependent on the receipt of dividends or other payments from our operating
subsidiaries. The payment of cash dividends to us by such operating subsidiaries
for the purpose of paying cash dividends on our common stock is limited by the
terms of our senior credit facility. See "Management's Discussion and Analysis
of Results of Operations and Financial Condition."

CAPITALIZATION

The following table sets forth as of December 31, 2001: (1) our actual
consolidated capitalization; and (2) our as adjusted capitalization giving
effect to the sale of common stock offered hereby and the application of the net
proceeds as described under "Use of Proceeds." This table should be read in
conjunction with our consolidated financial statements and notes thereto
included elsewhere in this prospectus.

DECEMBER 31, 2001
-------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS, EXCEPT
SHARE AMOUNTS)

Cash and cash equivalents................................... $ 21,767 $ 21,767
========== ==========
Short-term debt (including current maturities of long-term
debt and capital lease obligations)....................... $ 172,083 $ 172,083
========== ==========
Long-term debt:
Senior credit facility(1):
Revolving credit facility.............................. $ 100,608 $ 100,608
Term loan.............................................. 325,000 120,800
Industrial development revenue bonds(2)................... 43,765 43,765
9.25% senior notes(3)..................................... 133,560 133,560
Other foreign subsidiary indebtedness(4).................. 136,987 136,987
Other(5).................................................. 37,817 37,817
5.0% convertible subordinated notes....................... 199,984 199,984
Edgewood notes............................................ 50 50
Less current maturities of long-term debt and capital
lease obligations...................................... (172,083) (172,083)
---------- ----------
Total long-term debt................................... 805,688 601,488
---------- ----------
Convertible Trust Preferred Securities(6)................... 258,750 258,750
---------- ----------
Stockholders' investment:
Preferred stock, par value $1.00; 5,000,000 shares
authorized; no shares issued or outstanding............ -- --
Common Stock, par value $.01; 200,000,000 shares
authorized; 48,077,142 shares outstanding actual;
63,077,142 shares outstanding as adjusted.............. 481 631
Additional paid-in capital.................................. 456,627 660,677
Retained earnings........................................... 40,432 39,809
Deferred compensation plans................................. (15,571) (15,571)
Accumulated other comprehensive loss........................ (34,561) (34,561)
---------- ----------
Total stockholders' investment.............................. 447,408 650,985
---------- ----------
Total capitalization........................................ $1,511,846 $1,511,223
========== ==========

------------
(1) The weighted average interest rate for such borrowings was 7.0% at December
31, 2001. Our senior credit facility provides for revolving credit
borrowings of up to $825,000 and a term loan of $325,000.

(2) Reflects indebtedness from the issuance of industrial development revenue
bonds to finance the construction of our Bardstown facility and the purchase
of related equipment.

(3) In July, 2000, we sold E150,000 of 9.25% senior notes due 2010. These
Euro-denominated notes have been translated into U.S. dollars using a rate
of $0.8901=E1.00, the noon buying rate on December 31, 2001. On April 26,
2002, the noon buying rate was $0.8980=E1.00.

(4) Includes: (1) an aggregate of $94,075 of indebtedness of Seojin, (2) $16,008
of indebtedness of Dr. Meleghy, and (3) other foreign indebtedness of
$26,904.

(5) Includes: (1) capitalized lease obligations of $7,343, (2) $29,468 of future
payment obligations to Nissan in connection with our investment in Yorozu,
and (3) other indebtedness of $1,006.

(6) Represents the 6 3/4% Convertible Trust Preferred Securities (the "Trust
Preferred Securities") issued by the Tower Automotive Capital Trust in June
1998. The sole assets of the Trust are approximately $266.8 million in
principal amount of Tower Automotive's 6 3/4% Convertible Subordinated
Debentures due June 30, 2018, such amount being the sum of the stated
liquidation preference of the Trust Preferred Securities and the capital
contributed by Tower Automotive in exchange for the common securities of the
Trust.

SELECTED HISTORICAL FINANCIAL DATA

The selected consolidated financial data for Tower Automotive presented
below for and as of the end of each of the years in the five-year period ended
December 31, 2001, is derived from Tower Automotive's consolidated financial
statements, which have been audited by Arthur Andersen LLP, independent public
accountants. The consolidated financial statements at December 31, 2000 and 2001
and for each of the three years in the period ended December 31, 2001 and the
report of independent public accountants thereon are included elsewhere in this
prospectus. The consolidated financial statements at December 31, 1997, 1998 and
1999 and for the years ended December 31, 1997 and 1998 are not included herein.
The selected consolidated financial data below should be read in conjunction
with the consolidated financial statements and the notes thereto of Tower
Automotive included elsewhere in this prospectus and "Management's Discussion
and Analysis of Results of Operations and Financial Condition."

INCOME STATEMENT DATA:
Revenues...................... $2,467,433 $2,531,953 $2,170,003 $1,836,479 $ 1,235,829
Cost of sales................. 2,190,248 2,160,359 1,823,103 1,562,167 1,058,720
Selling, general and
administrative expense..... 139,203 137,003 105,950 85,169 57,869
Amortization expense.......... 24,804 21,517 15,803 13,472 9,537
Restructuring and asset
impairment charge.......... 383,739 141,326 -- -- --
Operating income (loss)....... (270,561) 71,748 225,147 175,671 109,703
Interest expense, net......... 73,765 64,711 37,981 40,318 28,962
Provision (benefit) for income
taxes...................... (73,312) 2,619 74,866 54,143 32,290
Net income (loss)............. (267,524) 13,434 117,088 88,040 46,244
Basic earnings (loss) per
share...................... $ (5.87) $ 0.29 $ 2.50 $ 1.91 $ 1.14
Diluted earnings (loss) per
share...................... $ (5.87) $ 0.28 $ 2.10 $ 1.68 $ 1.09
OTHER DATA:
Capital expenditures, net..... $ 193,955 $ 93,588 $ 197,315 $ 185,138 $ 117,379
Depreciation and
amortization............... 159,893 144,805 111,611 87,372 47,966
EBITDA(1)..................... (110,668) 216,553 336,758 263,043 157,669
Adjusted EBITDA(2)............ 273,071 357,879 336,758 263,043 157,669
Cash provided by (used in):
Operating activities....... 513,815 92,648 212,003 221,098 100,904
Investing activities....... (199,373) (266,782) (583,894) (267,401) (1,006,949)
Financing activities....... (296,048) 173,890 372,074 49,737 866,449
BALANCE SHEET DATA:
Cash and cash equivalents..... $ 21,767 $ 3,373 $ 3,617 $ 3,434 $ --
Working capital............... (379,785) 78,753 126,940 106,936 140,592
Total assets.................. 2,533,436 2,892,747 2,552,550 1,936,167 1,680,088
Long-term debt................ 805,688 1,141,900 921,221 542,349 743,934
Mandatorily redeemable trust
preferred securities....... 258,750 258,750 258,750 258,750 --
Stockholders' investment...... 447,408 700,095 727,135 606,796 515,279

(2) "Adjusted EBITDA" is EBITDA plus restructuring and asset impairment charges.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

INTRODUCTION

Since our inception in April 1993, when we were formed to acquire R.J.
Tower Corporation, our revenues have grown rapidly through a focused strategy of
internal growth and a highly disciplined acquisition program. Since 1993, we
have successfully completed 14 acquisitions and established six joint ventures
in China, Mexico, Korea, Japan and the United States. As a result of these
acquisitions and internal growth, our revenues have increased from approximately
$86 million in 1993 to approximately $2.5 billion in 2001.

Initially, our growth came primarily from acquisitions of North
American-based automotive suppliers, some of which had international operations.
We succeeded in consolidating a portion of the North American automotive
supplier base for structural components and assemblies and established ourselves
as a key supplier of those products. Our more recent acquisitions have been
intended to strengthen our ability to supply products on a global basis, grow
our technology and manufacturing capabilities, and diversify our customer base.
See "Recent Transactions" below.

Our rapid growth through acquisitions coincided with an extended period of
increased automotive production that resulted in high levels of utilization of
our acquired resources and capacity and contributed to periods of strong
operating results. Beginning in late 2000, automotive production declined
relative to prior periods, leading us to focus our efforts on reducing the
capacity of the enterprise and improving the efficiency of our continuing
operations. These efforts resulted in two significant restructurings, described
in more detail below, that reduced excess capacity, eliminated redundant
overhead costs, and reorganized the management structure of our U.S. and
Canadian operations. These efforts also involved the divestiture of certain
non-core functions, including the sale of our heavy truck business, in December
2000, to our joint venture partner, Metalsa. Prior to these restructurings, we
did not undertake any significant reductions in the scope of our operations or
any significant capacity rationalizations as a result of or following any of our
prior acquisitions.

Our most recent objective has been to reduce indebtedness by maximizing
cash flow. Several initiatives, such as extending our accounts payable terms to
coincide with prevailing industry practices and accelerating collections from
customers took place in 2001. As a result, and as described in more detail below
under "Liquidity and Capital Resources," we were able to significantly reduce
our indebtedness in 2001 by making net repayments of $335 million, despite last
year's downturn in the automotive industry.

The automotive market continues to be highly cyclical and dependent upon
consumer spending. During the third and fourth quarters of 2000, OEMs reduced
production levels in response to a decline in consumer demand. This decline
continued throughout 2001. Due to the relatively long lead times required to
produce many of our complex structural components, it may be difficult, in the
short term, for us to obtain new sales to replace any decline in the sales of
existing products. As a result, we have implemented and continue to pursue the
actions necessary to mitigate the effects of any production downturn, focusing
on reducing costs, maximizing our cash return on invested capital, reducing debt
balances and matching capital expenditures with operating cash flow.

Our growth in Europe and with foreign transplant operations in the U.S. has
reduced our reliance on Ford and DaimlerChrysler. As a result, revenues from
Ford and DaimlerChrysler decreased from 37% and 31% in 2000, respectively, to
35% and 25% in 2001, respectively. We expect this trend to continue as a result
of our anticipated organic growth outside the U.S. and from recent awards to
supply foreign transplant operations in the U.S.

RECENT TRANSACTIONS

During the last two years, we extended the geographic scope of our
manufacturing base through both acquisitions and joint ventures. In November
2000, we acquired Presskam for approximately $10 million. Located near
Bratislava, Slovakia, Presskam manufactures upper body structural assemblies for
Volkswagen, Porsche and Skoda. We also acquired a 30.8% interest in Yorozu, a
supplier of suspension modules and

structural parts to the Asian and North American automotive markets. The total
purchase price of approximately $68 million is payable over a three-year period
beginning in September 2000. The remaining obligation of $29.5 million as of
December 31, 2001, is recorded as indebtedness on our balance sheet.

In July 2000, we acquired for approximately $42 million, the remaining 60%
interest in Caterina, a supplier of structural stampings and assemblies to the
Brazilian automotive market, including Volkswagen and Mercedes-Benz. In May
2000, we paid approximately $33 million to acquire Algoods, a Canadian
manufacturer of aluminum heat shields and impact discs for the North American
automotive industry. The acquisition represented a significant investment in
processing technology for lightweight materials to complement our existing heat
shield capabilities and provides opportunities for application in other
lightweight vehicle structural products. Finally, in January 2000, we acquired
German-based Dr. Meleghy for approximately $86 million, plus an earnout payment
of $29.6 million. Dr. Meleghy designs and produces structural stampings,
assemblies, exposed surface panels and modules for the European automotive
industry. Dr. Meleghy operates three facilities in Germany and one facility in
both Hungary and Poland. Its main customers include DaimlerChrysler, Audi,
Volkswagen, Ford, Opel and BMW.

In addition to the purchase of Algoods, we invested in two joint ventures
to further improve our technology and manufacturing process capabilities. In
January 2001, we invested approximately $2 million in a joint venture with
Carron Industries, located in Inkster, Michigan, to provide us with detail
stamping and tooling capabilities, as well as full frame prototyping. In March
2000, we invested $2.1 million in the formation of a product technology and
development joint venture with Defiance Testing & Engineering Services, Inc., a
subsidiary of GenTek. This entity provides us with product testing services and
allows us to have access to a broader and more cost efficient range of testing
capabilities.

RESULTS OF OPERATIONS

The following table sets forth certain income statement data expressed as
percentage of our revenue for the years indicated:

YEAR ENDED DECEMBER 31,
-------------------------
2001 2000 1999
----- ----- -----

INCOME STATEMENT DATA:
Revenues................................................... 100.0% 100.0% 100.0%
Cost of sales.............................................. 88.8 85.3 84.0
S, G & A expenses.......................................... 5.6 5.4 4.9
Amortization expense....................................... 1.0 0.8 0.7
Interest expense, net...................................... 3.0 2.6 1.8
Provision (benefit) for income taxes....................... (3.0) 0.1 3.4
Equity in earnings of joint ventures....................... 0.7 0.9 0.7
Minority interest, net..................................... (0.6) (0.4) (0.5)

COMPARISON OF THE YEAR ENDED DECEMBER 31, 2001 TO THE YEAR ENDED DECEMBER 31,
2000

Revenues. Revenues for the year ended December 31, 2001 were $2,467.4
million, a 2.5% decrease, compared to $2,532.0 million for the year ended
December 31, 2000. The decrease was comprised of U.S. and Canada volume declines
of $263.0 million, primarily in the following platforms: Dodge Dakota, Durango
and Ram pickup; Chrysler LH; Ford Econoline, Focus, Explorer, Expedition, Taurus
and Ranger; and Lincoln LS/Jaguar S-Type. Other declines in revenues of $126.0
million were attributable to a decline in GM light truck program sales and the
sale of our heavy truck business in December 2000. These declines were offset by
$324.4 million in incremental revenues associated with the acquisitions of
Algoods (May 2000), Caterina (July 2000), Presskam (November 2000) and Seojin
(November 2000) and the consolidation of Tower Golden Ring (July 2001).

Cost of Sales. Cost of sales as a percent of revenues for the year ended
December 31, 2001 was 88.8% compared to 85.3% for the year ended December 31,
2000. The decline in the gross profit margin was primarily due to decreased
production volumes and product mix changes on light truck, sport utility and
other models served by us in North America and increasing sales with lower
margins in Europe, Asia and South America. Increased costs associated with the
launch of the Ford Explorer, Dodge Ram Truck and Cadillac CTS programs also
contributed to the decline in 2001 gross margins as compared to 2000. We
experienced an unusually high number of launches in 2001. The costs incurred
with respect to these launches exceeded planned costs due to both a greater than
expected number of engineering changes from our customers as well as
unanticipated launch inefficiencies.

S, G & A Expenses. Selling, general and administrative expenses increased
to $139.2 million, or 5.6% of revenues, for the year ended December 31, 2001
compared to $137.0 million, or 5.4% of revenues, for the year ended December 31,
2000. This increase was due primarily to incremental costs of $12.4 million
associated with our acquisition of Algoods, Caterina, Presskam, and Seojin and
the consolidation of Tower Golden Ring, offset by $10.2 million in decreased
costs due mainly to reductions in headcount in the consolidation of our
engineering and support activities.

Amortization Expense. Amortization expense for the year ended December 31,
2001 was $24.8 million compared to $21.5 million for the year ended December 31,
2000. The increase was due to incremental goodwill amortization related to the
acquisitions of Algoods, Caterina, Presskam and Seojin.

Interest Expense, net. Interest expense (net of interest income) for the
year ended December 31, 2001 was $73.8 million compared to $64.7 million for the
year ended December 31, 2000. Interest expense increased due to the (1) full
year effect in 2001 of increased borrowings to fund our acquisitions of Algoods,
Caterina, Presskam and Seojin and additional equity investment in Yorozu
totaling $23.5 million, offset by (2) decreased interest rates and decreased
spreads associated with the new credit agreement of $12.7 million, and (3)
increased capitalized interest on construction projects of $1.7 million.

Income Taxes. The effective income tax rate is not comparable between the
years as a result of the loss in 2001 compared to income in 2000. The entire
amount of the loss in 2001 did not receive tax benefit due to amortization and
write-off of nondeductible goodwill, and the provision of a valuation allowance
for a capital loss carryforward.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures
net of tax, was $17.2 million and $22.5 million for the years ended December 31,
2001 and 2000, respectively. These amounts represent our share of the earnings
from our joint venture interests in Metalsa, Tower Golden Ring, Yorozu, and DTA
Development, in the 2001 period and Metalsa, Caterina, Tower Golden Ring, and
Seojin in the 2000 period. The decrease in 2001 was due primarily to the
consolidation of Tower Golden Ring beginning in the third quarter of 2001.

Minority Interest. Minority interest for the years ended December 31, 2001
represents dividends, net of income tax benefits, on the 63/4% Convertible Trust
Preferred Securities and the minority interest held by the 40% joint venture
partners in Tower Golden Ring. Minority interest for the year ended December 31,
2000 represents dividends, net of income tax benefits on the 63/4% Convertible
Trust Preferred Securities. The increase in minority interest expense in 2001
was due primarily to the consolidation of Tower Golden Ring in the third quarter
of 2001.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 2000 TO THE YEAR ENDED DECEMBER 31,
1999

Revenues. Revenues for the year ended December 31, 2000 were $2,532.0
million, a 16.7% increase, compared to $2,170.0 million for the year ended
December 31, 1999. The increase was primarily due to $506.0 million related to
the acquisitions of Active in July 1999, Dr. Meleghy effective January 2000,
Algoods in May 2000, Caterina in July 2000, Seojin in November 2000, and
Presskam in November 2000. These increases were offset by declines in GM truck
programs of $114.0 million and heavy truck rail manufacturing sales of $56.6
million, as result of the sharp decline in automotive production in the second
half of 2000. Overall net increases on all other platforms, including the Ford
Focus, Taurus, Explorer, Expedition,

Excursion, and Lincoln LS/Jaguar S-Type, Nissan Xterra and Dodge Dakota, of
$26.6 million composed the balance of the revenue change.

Cost of Sales. Cost of sales as a percent of revenues for the year ended
December 31, 2000 was 85.3% compared to 84.0% for the year ended December 31,
1999. Despite the incremental sales growth year over year, which occurred
predominantly in the first half of 2000, we experienced a decline in gross
profit margin due primarily to the combined effects of volume declines in the GM
truck sales and heavy truck rail sales, the DaimlerChrysler plant shutdowns,
production slowdowns at Ford due to the Firestone tire recall and increasing
lower margin foreign sales in 2000 as compared to 1999. The beginning of the
launch of the new Ford Explorer program, which was delayed beyond the original
start date, also adversely impacted gross profit margin.

S, G & A Expenses. Selling, general and administrative expenses increased
to $137.0 million, or 5.4% of revenues, for the year ended December 31, 2000
compared to $106.0 million, or 4.9% of revenues, for the year ended December 31,
1999. The increased expense was due to incremental costs associated with our
acquisitions of Active, Dr. Meleghy, Algoods, Caterina, Seojin and Presskam of
$20.5 million and increased engineering, program development, and launch costs
related to new business of approximately $8.6 million. The realization of gains
on the cash settlement of amounts due under the interest rate swap and lock
agreements during 1999, had the effect of reducing the 1999 expense by $1.9
million.

Amortization Expense. Amortization expense for the year ended December 31,
2000 was $21.5 million compared to $15.8 million for the year ended December 31,
1999. The increase was due to the incremental goodwill amortization related to
the acquisitions of Active in 1999 and Dr. Meleghy, Algoods, Caterina, and
Presskam in 2000.

Interest Expense, net. Interest expense (net of interest income) for the
year ended December 31, 2000 was $64.7 million compared to $38.0 million for the
year ended December 31, 1999. Interest expense increased due to (1) increased
borrowings incurred to fund our acquisitions of Active, Dr. Meleghy, Algoods,
Caterina and Presskam of $23.0 million, (2) increased borrowings to fund our
joint venture interest in Yorozu of $0.6 million, (3) increased interest rates
and spreads associated with the new credit agreement of $8.7 million, and (4)
the issuance of the senior Euro notes of $5.3 million. These increases were
offset by increased interest income from the convertible notes in J.L. French
and Seojin of $4.9 million and increased capitalized interest on construction
projects of $6.0 million.

Income Taxes. The effective income tax rate was 37.2% for the year ended
December 31, 2000 and 40% for the year ended December 31, 1999. The decrease in
the effective rates in 2000 is due primarily as a result of increased income in
lower tax jurisdictions.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures
net of tax was $22.5 million and $15.3 million for the years ended December 31,
2000 and 1999, respectively. These amounts represent our share of the earnings
from our joint venture interests in Metalsa, Caterina, Tower Golden Ring and
Seojin. The increase in 2000 was due primarily to the full year impact of
earnings related to the Seojin joint venture.

Minority Interest. Minority interest for the years ended December 31, 2000
and 1999 represents dividends, net of income tax benefits, on the 6 3/4%
Convertible Trust Preferred Securities.

RESTRUCTURING AND ASSET IMPAIRMENT CHARGE

Our growth through acquisitions coincided with an extended period of high
automotive production that resulted in higher levels of utilization of our
acquired resources and capacity and contributed to periods of strong operating
results. More recently, as automotive production has declined from previous
levels, we have focused our efforts on reducing the capacity of the enterprise
and improving the efficiency of our continuing operations. During the 18 month
period beginning in the fourth quarter of 2000, we:

-- divested our non-core heavy truck business,

-- consolidated our manufacturing operations by closing manufacturing
locations in Kalamazoo, Michigan; Sebewaing, Michigan; and certain
operations in Milwaukee, Wisconsin,
23

-- reduced redundant overhead through a consolidation of our technical
activities and a reduction of other salaried colleagues, and

-- reorganized the management of our U.S. and Canada region.

These were accomplished through two restructurings, described in more
detail below. The first restructuring, or "2000 Plan," was initiated in October
2000, while the second restructuring, or "2001 Plan," was initiated in October
2001.

The restructuring and asset impairment charges consist of both
restructuring charges and non-restructuring related asset impairments, major
components of which are discussed in the sections below. The following table
summarizes the principal components of these charges for each of the last two
years (in millions):

2001 PLAN 2000 PLAN
--------- ---------

Restructuring and related asset impairments
Asset impairments......................................... $127.4 $103.7
Severance and outplacement costs.......................... 24.6 25.2
Loss contracts............................................ -- 8.1
Other exit costs.......................................... 26.1 4.3
------ ------
Total.................................................. 178.1 141.3
Other goodwill and asset impairments
Goodwill write down....................................... 108.6 --
Other asset impairments................................... 50.7 --
Investment impairment..................................... 46.3 --
------ ------
Total.................................................. 205.6 --
Total restructuring and asset impairment charges....... $383.7 $141.3
====== ======
Non-cash charges.................................. $333.0 $103.7
====== ======
Cash charges...................................... $ 50.7 $ 37.6
====== ======

Under the 2000 Plan, we realized cash savings of approximately $32 million
in 2001 as a result of reductions in payroll costs directly related to
restructuring activities. These cash savings from permanent payroll reductions
are expected to be realized annually. Further, under the 2001 Plan, we are
expected to realize an additional annual cash savings of approximately $35
million attributable to permanent payroll reductions that will begin in 2002.

Sebewaing and Milwaukee Press Operations (2001 Plan):

In October 2001, our board of directors approved a restructuring of the
enterprise that included the closing of the Sebewaing, Michigan facility. In
addition, in December 2001, our board of directors approved a restructuring plan
that relates to the consolidation of technical activities and a reduction of
other salaried colleagues in conjunction with a reorganization of our U.S. and
Canada operations and the relocation of some component manufacturing from our
Milwaukee Press Operations to other company locations. As a result of the 2001
Plan, we recorded a restructuring charge in the fourth quarter of 2001 of $178.1
million, which reflects the estimated qualifying "exit costs" to be incurred
over the next 12 months pertaining to the 2001 Plan.

The 2001 Plan charge includes costs associated with asset impairments,
severance and outplacement costs related to colleague terminations and certain
other exit costs. These activities are anticipated to result in a reduction of
more than 700 colleagues in our technical and administrative centers in Novi,
Rochester Hills, and Grand Rapids, Michigan; Milwaukee, Wisconsin; and our U.S.
and Canada manufacturing locations. Through December 31, 2001, we had eliminated
approximately 270 colleagues pursuant to the 2001 Plan. The

estimated restructuring charge does not cover certain aspects of the 2001 Plan,
including movement of equipment and colleague relocation and training. These
costs will be recognized in future periods as incurred.

The asset impairments consist of long-lived assets, including fixed assets,
buildings and manufacturing equipment from the facilities we intend to dispose
of or discontinue, and goodwill. The carrying value of the long-lived assets
written off was $127.4 million as of December 31, 2001. For assets that will be
disposed of currently, we measured impairment based on estimated proceeds on the
sale of the facilities and equipment. These asset impairments have arisen only
as a consequence of us making the decision to exit these activities during the
fourth quarter of 2001.

Based on the current plan, we anticipate this charge recorded under the
2001 Plan will require cash payments of $34.9 million combined with the
write-off of assets having a book value of $127.4 million and other future
obligations of $15.8 million. The asset write-offs include $87.5 million of
goodwill associated with Sebewaing and Milwaukee Press Operations, $20.6 million
of property, plant and equipment associated with the Sebewaing operations and
$12.1 million of property, plant and equipment associated with the Milwaukee
Press Operations business that will be discontinued. Additionally, there was
$7.2 million of property and building write-downs associated with the decision
to consolidate our technical centers.

The accrual for the 2001 Plan is included in accrued liabilities in the
accompanying consolidated balance sheet as of December 31, 2001. The table below
summarizes the accrued operational realignment and other charges through
December 31, 2001 (in millions):

SEVERANCE AND
ASSET OUTPLACEMENT OTHER EXIT
IMPAIRMENTS COSTS COSTS TOTAL
----------- ------------- ---------- -------

Provision...................... $ 127.4 $24.6 $26.1 $ 178.1
Reclassification from 2000
Plan......................... -- -- 5.9 5.9
Cash payments.................. -- (0.7) (0.6) (1.3)
Non-cash charges............... (127.4) -- -- (127.4)
------- ----- ----- -------
Balance at December 31, 2001... $ -- $23.9 $31.4 $ 55.3
======= ===== ===== =======

On January 31, 2002, we announced that we will be discontinuing the
remaining stamping and ancillary processes currently performed at our Milwaukee
Press Operations and relocating the remaining work to other company locations or
Tier II suppliers. We expect to complete the transfer process during the second
quarter of 2002. As a result of these efforts, we expect to record a
restructuring charge in the first quarter of 2002 totaling approximately $75
million comprised of expected cash payments of $15 million, asset impairment
charges of $47 million and other future obligations of $13 million.

Heavy Truck and Kalamazoo Stamping Operations (2000 Plan):

In October 2000, our board of directors approved the 2000 Plan, which was
intended to improve our long-term competitive position and lower our cost
structure. The 2000 Plan included phasing out the heavy truck rail manufacturing
in Milwaukee, Wisconsin; reducing stamping capacity by closing the Kalamazoo,
Michigan facility; and consolidating related support activities across the
enterprise. We recognized a charge to operations of approximately $141.3 million
in the fourth quarter of 2000, which reflected the estimated qualifying "exit
costs" to be incurred over the next 12 months under the 2000 Plan.

The 2000 Plan charge included costs associated with asset impairments,
severance and outplacement costs related to colleague terminations, loss
contract provisions and certain other exit costs. These activities resulted in a
reduction of approximately 850 colleagues.

The asset impairments consisted of long-lived assets, including fixed
assets, manufacturing equipment and land, from the facilities we intend to
dispose of or discontinue. For assets that were disposed of currently, we
measured impairment based on estimated proceeds on the sale of the facilities
and equipment. The carrying value of the long-lived assets held for sale on
disposal is approximately $3.8 million as of

December 31, 2001. For assets that will be held and used in the future, we
prepared a forecast of expected undiscounted cash flows to determine whether
asset impairment existed, and used fair values to measure the required
write-downs. These asset impairments have arisen only as a consequence of us
making the decision to exit these activities during the fourth quarter of 2000.

The 2000 Plan included an accrual of $37.6 million for expected cash
payments and other exit costs, combined with asset impairment charges of $103.7
million. The accrual for the 2000 Plan has been fully utilized and revised as of
December 31, 2001. The table below summarizes the accrued operational
realignment and other charges through December 31, 2001 (in millions):

SEVERANCE AND OTHER
ASSET OUTPLACEMENT LOSS EXIT
IMPAIRMENTS COSTS CONTRACTS COSTS TOTAL
----------- ------------- --------- ------- -------

Provision for operational
realignment and other
charges...................... $ 103.7 $ 25.2 $ 8.1 $ 4.3 $ 141.3
Cash payments.................. -- (8.7) (2.5) (0.3) (11.5)
Non-cash charges............... (103.7) -- -- -- (103.7)
------- ------ ----- ------- -------
Balance at December 31,
2000......................... -- 16.5 5.6 4.0 26.1
Cash payments.................. -- (13.6) (4.2) (2.4) (20.2)
Revision of estimate........... -- (2.9) (1.4) (1.6) (5.9)
------- ------ ----- ------- -------
Balance at December 31,
2001......................... $ -- $ -- $ -- $ -- $ --
======= ====== ===== ======= =======

The following table summarizes the major components of the asset impairment
charge for the 2000 Plan (in millions):

CARRYING
AMOUNT
--------

Milwaukee Heavy Truck Rail Manufacturing.................... $ 47.3
Milwaukee Press Operations Machinery & Equipment............ 7.9
Milwaukee Shared Services Land & Equipment.................. 19.8
Milwaukee Prototype & Technical Center Building, Machinery &
Equipment................................................. 14.0
Kalamazoo Stamping Operations Land, Building & Equipment.... 5.7
Granite City Stamping Operations Machinery & Equipment...... 4.6
Related Stamping & Assembly Machinery & Equipment........... 4.4
------
Total....................................................... $103.7
======

The triggering event for each major component's asset impairment charge was
the decision to exit the activities, which was made by our board of directors on
October 2, 2000.

Non-restructuring Asset Impairments:

The other goodwill and asset impairment charges recorded in 2001 are a
result of our review of the carrying amount of certain of our goodwill, fixed
assets and certain investments, in light of our current operating environment,
worldwide economic conditions and trends in our industry. Based upon a review of
anticipated cash flows, we determined that goodwill assigned to two of our
plants was impaired and was written down. In addition, we identified assets
which no longer had sufficient cash flows to support their carrying amounts and
were written down to fair value, including our investment in J.L. French. At
December 31, 2001, we had approximately $567 million of unamortized goodwill.
During the second quarter of 2002, we will perform a review of our goodwill to
determine the extent to which any further impairment charges are necessary under
the new accounting requirements of SFAS 142. See "--Critical Accounting
Policies" and "--Recently Issued Accounting Policies."

LIQUIDITY AND CAPITAL RESOURCES

The following summarizes our primary sources and uses of cash (in
millions):

YEAR ENDED DECEMBER 31,
------------------------
2001 2000
------- -------

Sources of Cash:
Net income (loss) before depreciation and amortization,
deferred income taxes, extraordinary loss, equity in
joint venture earnings, and restructuring and asset
impairment charges(1).................................. $ 178.1 $ 256.7
Proceeds from sale of receivables......................... 15.2 --
Decreases in accounts receivable.......................... 74.5 111.7
Decrease in inventories................................... 21.4 6.8
Decrease (increase) in prepaid tooling and other assets... 129.3 (115.8)
Increase (decrease) in accounts payable................... 120.5 (28.3)
Increase (decrease) in accrued liabilities................ 13.1 (91.5)
Changes in other assets and liabilities................... (38.3) (47.0)
------- -------
Net cash provided by operating activities................. 513.8 92.6
Proceeds from issuance of stock........................... 39.0 6.8
Proceeds from debt issuances and net borrowings........... -- 207.3
Proceeds from divestiture................................. -- 55.4
------- -------
Total sources of cash....................................... $ 552.8 $ 362.1
======= =======
Uses of Cash:
Capital expenditures, net(2).............................. 194.0 93.6
Acquisitions and investments in joint ventures............ 5.4 228.5
Repurchase of stock....................................... -- 40.2
Increase (decrease) in cash balances...................... 18.4 (0.2)
Net repayments of debt.................................... 335.0 --
------- -------
Total uses of cash.......................................... $ 552.8 $ 362.1
======= =======

------------
(1) Net income before depreciation and amortization, deferred income taxes,
extraordinary loss, equity in joint venture earnings, restructuring and
asset impairment charges is computed as follows (in millions):

Net income (loss)........................................... $(267.5) $ 13.4
Depreciation and amortization............................... 159.9 144.8
Deferred income tax benefit................................. (80.8) (23.3)
Extraordinary loss on extinguishment of debt................ -- 3.0
Equity in earnings of joint ventures........................ (17.2) (22.5)
Restructuring and asset impairment charges.................. 383.7 141.3
------- -------
$ 178.1 $ 256.7
======= =======

(2) We lease certain equipment utilized in our operations under operating lease
agreements. If certain equipment had been purchased instead of leased,
capital expenditures would have been $265.7 million and $181.8 million in
2001 and 2000, respectively.

Sources of Cash

Our principal sources of cash are cash flow from operations, commercial
borrowings and capital markets activities. During the year ended December 31,
2001, we generated $513.8 million of cash from operations. This compares with
$92.6 million generated during the same period in 2000. Net income before
depreciation and amortization, deferred income taxes, extraordinary loss, equity
in joint venture earnings, and restructuring and asset impairment charges was
$178.1 million and $256.7 million for 2001 and 2000, respectively.

Operating cash flow was reduced by $21.5 million in 2001 and $11.5 million in
2000 for cash restructuring payments, and was increased by net tax refunds of
$12.9 million in 2001 and decreased as a result of net tax payments of $18.8
million in 2000. In total, working capital and other operating items increased
operating cash flow by $335.7 million during 2001 and decreased operating cash
flow by $164.1 million during 2000.

In August 2001, we realized net proceeds of $37.5 million from the issuance
of 3,636,400 shares of common stock at a price of $11.00 per share in a private
placement transaction. The issuance of stock from our colleague stock purchase
plan and option plan contributed an additional $1.5 million and $6.8 million to
cash flow for 2001 and 2000, respectively.

In June 2001, we entered into a financing agreement whereby our domestic
operating units sell eligible customer receivables on an ongoing basis to a
newly formed, fully consolidated, financing subsidiary. The financing subsidiary
subsequently sells its interest in the receivables to a third party funding
agent in exchange for cash and a subordinated interest in the unfunded
receivables transferred. We act as an administrative agent in the management and
collection of accounts receivable sold. Through December 31, 2001, we realized
net cash proceeds of $15.2 from the sale of receivables.

In July 2000, we replaced our previous $750 million amortizing credit
agreement with a new six-year $1.15 billion senior unsecured credit agreement.
The new credit agreement includes an $825 million non-amortizing revolving
facility and a $325 million amortizing term loan. The credit agreement also
includes a multi-currency borrowing feature that allows us to borrow up to $500
million in certain freely-tradable offshore currencies and letter of credit
sublimits of $100 million. As of December 31, 2001, $20.0 million of the
outstanding borrowings are denominated in Japanese yen, $55.6 million are
denominated in Euros and $15.7 million are denominated in Canadian dollars.
Interest on borrowings under the credit agreement is at the financial
institutions' reference rate, LIBOR, or the Eurodollar rate plus a margin
ranging from 0 to 200 basis points depending on the ratio of the consolidated
funded debt for our restricted subsidiaries to our total earnings before
interest, taxes, depreciation and amortization (EBITDA as defined in the credit
agreement). The weighted average interest rate for such borrowings was 7.0% for
year ended December 31, 2001. The credit agreement has a final maturity of 2006.
As a result of the debt replacement, we recorded an extraordinary loss, net of
tax, of $3.0 million during the third quarter of 2000.

At December 31, 2001, we had borrowed approximately $101 million under our
revolving credit facility of $825 million. In order to borrow under the
revolving facility, we must meet certain covenant ratios. Based on these
covenants, the amount of unused availability under the revolving facility was
approximately $103 million at December 31, 2001, compared to unused availability
of approximately $326 million at December 31, 2000. This reduction in
availability resulted from a decrease in trailing four-quarter EBITDA, offset in
part by an increase in availability due to the reduction of indebtedness (as
defined in the credit agreement) between the periods. The credit agreement
requires us to meet certain financial tests, including but not limited to a
minimum interest coverage and maximum leverage ratio. The covenant conditions
contained in the credit agreement also limit our ability to pay dividends to the
available borrowings under the revolving facility. As of December 31, 2001, we
were in compliance with all debt covenants. We are currently pursuing other
financing alternatives in order to refinance existing bank indebtedness and
thereby reduce our dependence on commercial lenders. Our ability to complete
these transactions will depend on future capital market conditions.

In September 2000, we entered into an interest rate swap contract to hedge
against interest rate exposure on approximately $160 million of our floating
rate indebtedness under the credit agreement. The contracts have the effect of
converting the floating rate interest to a fixed rate of approximately 6.9%,
plus any applicable margin required under the revolving credit facility. The
interest rate swap contract was executed to balance our fixed-rate and
floating-rate debt portfolios and it expires in September 2005.

In July 2000, R.J. Tower Corporation, our wholly owned subsidiary, issued
Euro-denominated senior unsecured notes in the amount of E150 million ($133.6
million at December 31, 2001). The notes bear interest at a rate of 9.25%,
payable semi-annually. The notes rank equally with all of our other unsecured
and unsubordinated debt. The net proceeds after issuance costs were used to
repay a portion of our existing Euro-denominated indebtedness under our credit
facility. The notes mature on August 1, 2010.
28

Uses of Cash

Our principal uses of cash are debt repayment, capital expenditures and
acquisitions and investments in joint ventures. Net cash used in investing
activities was $199.4 million during the year ended December 31, 2001, as
compared to $266.8 million in the prior period. Net capital expenditures totaled
$194.0 million and $93.6 million for the comparable 2001 and 2000 periods,
respectively. Net cash used in financing activities totaled $296.0 million for
the year ended December 31, 2001, compared with net cash provided by financing
activities of $173.9 million in the prior period. Net repayments of debt were
$335.0 million in 2001, with net proceeds from borrowings of $207.3 million in
2000.

Capital expenditures were $194.0 million and $93.6 million in 2001 and
2000, respectively. We lease ceratin equipment utilized in our operations under
operating lease agreements. If certain equipment had been purchased instead of
leased, capital expenditures would have been $265.7 million and $181.8 million
in 2001 and 2000, respectively. The equipment leased during 2001 and 2000 was
primarily associated with new customer programs such as the Dodge Ram and
Cadillac CTS programs that launched during 2001. We intend to continue to
utilize operating lease financing on occasion when the effective interest rate
equals or is lower than our cost of capital and the lease terms match the
expected life of the respective program. Annual operating lease payments under
our lease agreements range from $54 million to $48 million over the next five
years. Operating lease expense is included in cost of sales in our statements of
operations.

Capital expenditures in 2001 also included investment in other new
programs, additional capabilities in Europe, and maintenance, safety and
productivity improvements. We estimate our 2002 capital expenditures will be
approximately $155 million. Where appropriate, we may lease rather than purchase
such equipment, which would have the effect of reducing this anticipated level
of capital expenditures.

Acquisitions and investments in joint ventures were approximately $5.4
million and $228.5 million for the 2001 and 2000 periods, respectively, offset
by proceeds from the sale of our heavy truck business of $55.4 million during
2000. During 2000, we used cash of $40.2 million to repurchase common stock.

Working Capital

During the year ended December 31, 2001, working capital decreased by
approximately $458.5 million. During that year, we focused specifically on
working capital improvement in executing our objectives of reducing indebtedness
by maximizing free cash flow. In addition to the items listed above, several key
initiatives were utilized, the results of which contributed to the working
capital decrease during the year and resulted in the significant improvement in
cash generated from operations. Approximately $120.5 million of the decrease in
working capital was comprised of an increase in accounts payable by
renegotiating terms with key suppliers to terms that are more reflective of
industry norms. A decrease of accounts receivable of approximately $74.5 million
resulted primarily from our participation in specific receivable programs with
key customers. These programs allow for accelerated collection of receivables
from key customers, subject to interest charges ranging from 7.25% to 8.5% at an
annualized rate. Working capital also decreased as a result of the collection of
tooling receivables and the receipt of proceeds from certain operating lease
arrangements that were finalized in 2001 but pertained to dedicated capital
costs incurred in 2000 in anticipation of the completion of those leases. We
also emphasized the maintenance of low inventory levels.

We expect to continue to maintain a low working capital position through a
continuation of the efforts discussed above and continued focus on minimizing
the length of the cash flow cycle. We believe that the available borrowing
capacity under our credit agreement, together with funds generated by
operations, should provide sufficient liquidity and capital resources to pursue
our business strategy for the foreseeable future, with respect to working
capital, capital expenditures, and other operating needs.

Contractual Obligations and Commercial Commitments

Our contractual obligations as of December 31, 2001 are as follows:

PAYMENTS DUE BY PERIOD
-------------------------------------------------------------
LESS THAN AFTER
CONTRACTUAL OBLIGATIONS TOTAL 1 YEAR 1-3 YEARS 4-5 YEARS 5 YEARS
-------------------------------- ---------- --------- --------- --------- --------

Long-term debt.................. $ 770,444 $169,360 $174,842 $232,331 $193,911
Convertible Subordinated
Notes(1)...................... 199,984 -- 199,984 -- --
Capital lease obligations....... 7,343 3,227 4,116 -- --
Operating leases................ 383,244 54,177 106,853 100,787 121,427
---------- -------- -------- -------- --------
Balance at December 31, 2001.... $1,361,015 $226,764 $485,795 $333,118 $315,380
========== ======== ======== ======== ========

------------
(1) The Convertible Subordinated Notes are due on August 1, 2004 and are
convertible into our common stock at a conversion price of $25.88 per share;
therefore, they have been included as part of the contractual obligations in
the 1-3 year period above.

At December 31, 2001, our commercial commitments included $100 million of
standby letters of credit which are available under the terms of our $1.15
billion senior unsecured credit agreement.

LOSS CONTRACTS, FACILITY SHUTDOWN AND PAYROLL RELATED COSTS

We are committed under certain existing agreements, assumed in connection
with prior acquisitions, to supply product to our customers at selling prices
that are not sufficient to cover the direct costs to produce those parts. We are
obligated to supply these products for the life of the related vehicles, which
is typically three to ten years. Accordingly, we recognize losses at the time
these losses are probable and reasonably estimable at an amount equal to the
minimum amount necessary to fulfill our obligations to our customers. The
reserves established in connection with these recognized losses are reversed as
the product is shipped to the customers.

Our acquisitions have been accounted for using the purchase method of
accounting and, accordingly, the assets acquired and liabilities assumed have
been recorded at fair value as of the dates of the acquisitions. The excess of
the purchase price over the fair value of the assets acquired and liabilities
assumed has been recorded as goodwill. Results of operations for these
acquisitions have been included in the accompanying consolidated financial
statements since the dates of acquisition.

In conjunction with our acquisitions, reserves have been established for
certain costs associated with facility shutdown and consolidation activities,
for general and payroll related costs primarily for planned colleague
termination activities, and for provisions for acquired loss contracts. A
rollforward of these reserves is as follows (in millions):

FACILITY SHUTDOWN PAYROLL RELATED
COSTS COSTS LOSS CONTRACTS
----------------- --------------- --------------

December 31, 1999............... $13.8 $ 6.4 $ 24.8
Additions..................... 1.0 -- 12.3
Utilizations.................. (7.5) (2.6) (8.4)
----- ----- ------
December 31, 2000............... 7.3 3.8 28.7
Additions..................... -- -- --
Utilizations.................. (2.1) (2.7) (11.7)
----- ----- ------
December 31, 2001............... $ 5.2 $ 1.1 $ 17.0
===== ===== ======

have been utilized as originally intended and management believes the
liabilities recorded for shutdown and consolidation activities are adequate but
not excessive as of December 31, 2001.

EFFECTS OF INFLATION

Inflation generally affects us by increasing the interest expense of
floating-rate indebtedness and by increasing the cost of labor, equipment and
raw materials. Management believes that inflation has not significantly affected
our business over the past 12 months. However, because selling prices generally
cannot be increased until a model changeover, the effects of inflation must be
offset by productivity improvements and volume from new business awards.

MARKET RISK

We are exposed to various market risks, including changes in foreign
currency exchange rates and interest rates. Market risk is the potential loss
arising from adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. Our policy is to not enter into
derivatives or other financial instruments for trading or speculative purposes.
We periodically enter into financial instruments to manage and reduce the impact
of changes in interest rates.

Interest rate swaps are entered into as a hedge of underlying debt
instruments to effectively change the characteristics of the interest rate
without actually changing the debt instrument. Therefore, these interest rate
swap agreements convert outstanding floating rate debt to fixed rate debt for a
period of time. For fixed rate debt, interest rate changes affect the fair
market value but do not impact earnings or cash flows. Conversely for floating
rate debt, interest rate changes generally do not affect the fair market value
but do impact future earnings and cash flows, assuming other factors are held
constant.

At December 31, 2001, we had total debt and obligations under capital
leases of $977.8 million. The debt is comprised of fixed rate debt of $493.6
million and floating rate debt of $484.2 million. The pre-tax earnings and cash
flows impact for the next year resulting from a one percentage point increase in
interest rates on variable rate debt would be approximately $4.8 million,
holding other variables constant. A one percentage point increase in interest
rates would not materially impact the fair value of the fixed rate debt.

A portion of our revenues were derived from manufacturing operations in
Europe, Asia and South America. The results of operations and financial position
of our foreign operations are principally measured in its respective currency
and translated into U.S. dollars. The effects of foreign currency fluctuations
in Europe, Asia and South America are somewhat mitigated by the fact that
expenses are generally incurred in the same currency in which revenues are
generated. The reported income of these subsidiaries will be higher or lower
depending on a weakening or strengthening of the U.S. dollar against the
respective foreign currency.

A portion of our assets are based in our foreign operations and are
translated into U.S. dollars at foreign currency exchange rates in effect as of
the end of each period, with the effect of such translation reflected as a
separate component of stockholders' investment. Accordingly, our consolidated
stockholders' investment will fluctuate depending upon the weakening or
strengthening of the U.S. dollar against the respective foreign currency.

Our strategy for management of currency risk relies primarily upon
conducting our operations in a country's respective currency and may, from time
to time, engage in hedging programs intended to reduce the our exposure to
currency fluctuations. As of December 31, 2001, we held no foreign currency
hedge positions. Management believes the effect of a one percent appreciation or
depreciation in foreign currency rates would not materially affect our financial
position or results of operations for the periods presented.

CRITICAL ACCOUNTING POLICIES

We believe the following represent our critical accounting policies:

Goodwill and Impairment of Long-Lived Assets--We perform impairment
analyses of our recorded goodwill and long-lived assets whenever events and
circumstances indicate that they may be impaired. When

the undiscounted cash flows, without interest or tax charges, are less than the
carrying value of the assets being reviewed for impairment, the assets are
written down to fair market value. During 2001, we recorded goodwill and
long-lived asset impairment writedown provisions of $333.0 million, which
largely resulted from the downturn in the automotive market and the resulting
restructuring of our operations. Future events could cause us to conclude that
additional impairment indicators exist and that goodwill associated with our
acquired business is further impaired. Any resulting impairment loss could have
a material adverse impact on our financial condition and results of operations.

In 2002, Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets" (SFAS 142) became effective and as a result, we will
cease to amortize approximately $567 million of goodwill. We had recorded
approximately $21 million of amortization on these amounts during 2001 and would
have recorded approximately $16 million of amortization during 2002 after
recording 2001 goodwill writedowns of approximately $196 million. In lieu of
amortization, we are required to perform an initial impairment review of our
goodwill in 2002 and an annual impairment review thereafter. The initial review
is expected to be completed during the second quarter of 2002. There can be no
assurance that at the time the review is completed a material impairment charge
will not be recorded.

Other Loss Reserves--We have other loss reserves such as purchase
accounting reserves, restructuring reserves, and loss contract reserves that
require the use of estimates and judgment with regard to risk exposure and
ultimate liability. Reserves for loss contracts are estimated by determining
which parts are being sold pursuant to loss contracts and determining an
estimate of the per-part negative margin. Additionally, we must estimate the
volumes that we are committed to sell over the life of the related production
cycle. Other losses are estimated using consistent and appropriate methods;
however, changes to the assumptions could materially affect the recorded
liabilities for loss.

Customer Tooling and Other Design Costs--As indicated in Note 2 to the
Consolidated Financial Statements, we incur costs related to tooling. Based on
the fact that we have the contractual right to use the tool over the life of the
supply arrangement, these costs are capitalized and amortized over the life of
the related product.

Pension and Other Post-Employment Benefits--The determination of the
obligation and expense for pension and other postretirement benefits is
dependent on the selection of certain assumptions used by actuaries in
calculating such amounts. Those assumptions are described in Note 11 to the
Consolidated Financial Statements and include, among others, the discount rate,
expected long-term rate of return on plan assets and rates of increase in
compensation and healthcare costs. In accordance with generally accepted
accounting principles, actual results that differ from these assumptions are
accumulated and amortized over future periods and therefore, generally affect
the recognized expense and recorded obligation in such future periods. While we
believe that the assumptions are appropriate, significant differences in the
actual experience or significant changes in the assumptions may materially
affect the pension and other postretirement obligations and the future expense.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

On June 29, 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) 141, "Business Combinations," and SFAS
142, "Goodwill and Intangible Assets." Major provisions of these Statements are
as follows: all business combinations initiated after June 30, 2001 must use the
purchase method of accounting; the pooling of interest method of accounting is
prohibited except for transactions initiated before July 1, 2001; intangible
assets acquired in a business combination must be recorded separately from
goodwill if they arise from contractual or other legal rights or are separable
from the acquired entity and can be sold, transferred, licensed, rented or
exchanged, either individually or as part of a related contract, asset or
liability; goodwill and intangible assets with indefinite lives are not
amortized but tested for impairment annually, except in certain circumstances,
and whenever there is an impairment indicator; all acquired goodwill must be
assigned to reporting units for purposes of impairment testing; effective
January 1, 2002, goodwill is no longer subject to amortization.

We will apply the new rules on accounting for goodwill and other intangible
assets beginning in the first quarter of fiscal year 2002. As of December 31,
2001, we have unamortized goodwill of $567.1 million that will be subject to the
transition provisions of the Statements. We have not yet determined the impact
of adopting these Statements on our earnings and financial position, including
whether we will be required to recognize any transitional impairment losses as a
cumulative effect of a change in accounting principle. Application of the
nonamortization provisions of the Statements is expected to result in a
reduction in goodwill amortization expense of approximately $16 million in
fiscal 2002, after reflecting the writedowns of goodwill totaling $196.1
million, which were recorded during 2001.

In July 2001, the FASB issued SFAS No. 144, "Impairment or Disposal of
Long-Lived Assets," which is effective for fiscal years beginning after December
15, 2001. The provisions of this Statement provide a single accounting model for
impairment of long-lived assets. The adoption of SFAS No. 144 on January 1, 2002
is not expected to have a material impact on our financial position or our
results of operations.

BUSINESS

BACKGROUND

We are a leading global designer and producer of structural components and
assemblies used by every major automotive original equipment manufacturer, or
"OEM," including Ford, DaimlerChrysler, General Motors ("GM"), Honda, Toyota,
Renault/Nissan, Fiat, Hyundai/Kia, BMW, Volkswagen Group, and Isuzu. Our current
products include automotive body structural stampings and assemblies including
exposed sheet metal ("Class A") components, lower vehicle structural stampings
and assemblies, and suspension components, modules and systems. We believe we
are the largest independent global supplier of structural components and
assemblies to the automotive market (based on net revenues).

We have over 60 manufacturing, product development, and administrative
facilities located in the U.S., Canada, Mexico, Brazil, India, Germany, Hungary,
Poland, Slovakia, Italy, France, Spain, Japan, China and Korea. We continue to
broaden our geographic coverage and strengthen our ability to supply products on
a global basis as a result of our acquisition strategy, targeted organic growth
and disciplined manufacturing efficiency and productivity initiatives.

We operate in the large and highly fragmented structural segment of the
automotive supply industry, which has continued to undergo significant
consolidation. In order to lower costs and improve quality, OEMs are reducing
their supplier base by awarding sole-source contracts to full-service suppliers
who are able to supply larger portions of a vehicle on a global basis. OEMs'
criteria for supplier selection include not only cost, quality and
responsiveness, but also full-service design, engineering and program management
capabilities. OEMs are increasingly seeking suppliers capable of providing
complete systems or modules rather than suppliers who only provide separate
component parts. In addition, OEMs are increasingly requiring their suppliers to
have the capability to design and manufacture their products in multiple
geographic markets. As a full-service supplier with strong OEM relationships, we
expect to continue to benefit from these trends within the structural segment of
the automotive supply industry.

Approximately 72% of our 2001 revenues were generated from sales in North
America. We supply products for many of the most popular car, light truck and
sport utility models, including the Honda Accord and Civic, Toyota Camry, Ford
Taurus, Focus, Explorer, Ranger and F-Series pickups, Chevrolet Silverado and
GMC Sierra pickups, and Dodge Ram pickup. Approximately 11% of our 2001 revenues
were generated from sales in Europe and 15% in Asia. The remaining 2% of revenue
was generated from sales in South America.

OUR BUSINESS STRATEGY

OPERATING STRATEGY

Offer Full-Service Technical Design, Engineering and Program Management
Capabilities. We continue to build our competitive advantage through investment
in product development, advanced engineering and program management. As a result
of this investment, and of consolidation among suppliers of automotive
structural components and assemblies, we believe that we are one of only a
select group of suppliers able to

provide automotive OEMs with full service technical design, engineering and
program management capabilities with respect to the entire body structure of a
vehicle on a global basis. We work with OEMs throughout the product development
process from concept vehicle and prototype development through the design and
implementation of manufacturing processes to provide full-service capabilities
to our customers. In some cases, we place design engineers at customer
facilities to coordinate our product design efforts with those of our OEM
customers.

Further Enhance Global Presence. We strive to offer manufacturing and
support services to our customers on a global basis through a combination of
international wholly owned subsidiaries and by entering into joint ventures and
partnerships with foreign suppliers. Outside of North America, we have
technical/ customer service centers in Yokohama, Japan; Turin, Italy; Hyderabad,
India; Bergisch-Gladbach, Germany; and Sao Paulo, Brazil. We also have relocated
certain technical personnel resources to locations where OEMs are developing
"world cars" which can be designed in one vehicle center to a single global
standard but produced and sold in different geographic markets. We believe that
these global, technical and manufacturing capabilities have led to the award of
several, major new programs to us.

Continue to Optimize Manufacturing Efficiency and Quality. In response to
OEMs' increasingly stringent production specifications, we have implemented
manufacturing practices designed to maximize product quality and timeliness of
delivery to reduce waste and enhance efficiency. We have continued to upgrade
our manufacturing equipment and processes through selective investment in new
equipment, maintenance of existing equipment and efficient utilization of
manufacturing engineering personnel. In order to maximize return on invested
capital, we increasingly employ flexible manufacturing processes that allow us
to maximize equipment utilization in meeting customer expectations for product
quality and timely delivery. Consistent with this strategy, we, where
appropriate, outsource the production of select commodity components to Tier II
manufacturers, as well as seek to provide administrative services to these
manufacturers to maximize supply chain efficiency and return on invested
capital. We monitor existing manufacturing capacity relative to expected
capacity, which is determined primarily by current and expected business backlog
and by opportunities to outsource commodity operations to Tier II manufacturers.
As a result, beginning in the second half of 2000, we began restructuring our
operations to reduce excess manufacturing capacity and improve the efficiency of
our operations.

Maintain Decentralized, Participative, Incentive-Based Culture. Our
decentralized approach to managing our manufacturing facilities encourages
decision making and colleague participation in areas such as manufacturing
processes and customer service. Our leadership team meets frequently at various
company locations in order to maintain a unified corporate culture. To increase
colleague productivity, we utilize incentive programs for all salaried and
hourly colleagues that provide incentives for colleagues who take advantage of
continuous improvement programs and who provide cost savings ideas.

GROWTH STRATEGY

Our growth strategy comprises two fundamental elements; increased organic
growth and the pursuit of strategic acquisitions, alliances and partnerships.

Increase Organic Growth. We actively pursue increased organic growth from
both new and replacement vehicle programs. Specifically, it is our belief that
the following competitive strengths have played, and will continue to play, an
important role in achieving our organic growth objectives:

-- Scale position as the largest independent supplier of automotive
structural components and assemblies,

-- Full-service technical design, engineering and program management
capabilities,

-- Global engineering and manufacturing presence,

-- Modular product capabilities,

-- Strong customer relationships with key domestic and foreign
automotive OEMs, and

-- Strong financial position relative to most competitors.

As a result of these competitive strengths, and the efforts to increase
organic growth, we were awarded programs in 2001 that, based on independent
estimates of expected program volumes and current expectations of program
pricing, represent more than $760 million in annual revenues. These programs are
scheduled to launch over the next three years and be in full production by 2005.
These program awards represent business associated with new platforms or
platforms for which we were not the previous supplier and will help to further
the diversification of our customer base. The proportion of revenues from Ford
and DaimlerChrysler, our two largest customers, has decreased from 68% in 2000
to 60% in 2001. Of the $760 million in annual revenues represented by the new
program awards described above, 43% is expected to be derived from Ford and
DaimlerChrysler and 57% is expected to be derived from other customers including
Nissan, GM and BMW. With the exception of the Dodge Durango frame, we also
continue to retain a substantial portion of our revenue associated with existing
vehicle platforms as they are replaced by newer models.

In order to better target acceptable returns on new business, beginning in
2000, we adopted a return on invested capital-based approach to evaluating the
attractiveness of potential new programs. Specifically, the objective is to take
on only those programs that are expected to provide an acceptable return on
invested capital after taking into account such factors as expected unit volume
and pricing, ability to utilize existing manufacturing capacity for that
program, requirements for investment in new capital equipment and the
flexibility to use such new capital equipment for other programs.

Pursue Strategic Acquisitions, Alliances and Partnerships. Strategic
acquisitions, alliances and partnerships have contributed significantly to our
growth. We continue to believe that consolidation in the automotive supply
industry will provide further attractive opportunities to either acquire, or
purchase a majority or minority ownership interest in, companies that complement
our existing business. We seek to make acquisitions that:

-- Provide additional product, manufacturing and technical capabilities,

-- Broaden our geographic coverage domestically and strengthen our
ability to supply products on a global basis,

-- Increase both the number of models for which we supply products and
the content supplied for existing models,

-- Add new customers,

-- Facilitate outsourcing opportunities from the in-house operations of
new and existing customers,

-- Facilitate capacity rationalization and restructuring opportunities,
and

-- Provide at least a minimum targeted return on invested capital.

In 2001, over 70% of total worldwide passenger vehicle production occurred
outside North America. As a result, a particular focus for us has been and will
continue to be to pursue acquisitions or develop strategic partnerships and
alliances that strengthen our ability to supply our products on a global basis.
Consistent with this strategy, we have formed, or are in the process of forming,
strategic alliances with other suppliers throughout the world, including those
located in Europe, Asia and South America. For example, we have majority-owned
operations in Asia through our 66% interest in Seojin in Korea and our 60%
interest in Tower Golden Ring, which manufactures structural components in
China. We also have equity interests in Mexico through our 40% interest in
Metalsa and in Japan through our 30.8% interest in Yorozu. Increased
international sales are intended to mitigate the effects of cyclical downturns
in a given geographic region and further diversify our OEM customer base.

INDUSTRY TRENDS

Our performance and growth is directly related to certain trends within the
automotive market, including the consolidation of the component supply industry,
the increase in global sourcing and the growth of system/ modular sourcing. It
is also directly related to automotive production, which is cyclical and depends
on general economic conditions and consumer confidence.

Continuation of Supplier Consolidation. In order to lower costs and
improve quality, OEMs have continued to reduce their supply base by awarding
sole-source contracts to full-service suppliers who are able to supply larger
segments of a vehicle. OEMs' criteria for supplier selection include not only
cost, quality and responsiveness, but also full-service design, engineering and
program management capabilities. As a result, over the past decade, the
automotive supply industry has been undergoing significant consolidation.
Furthermore, in 2001 a number of suppliers experienced financial difficulties,
which is likely to result in further consolidation activity as the operations of
these suppliers are acquired and rationalized by larger, more capable suppliers.
For full-service suppliers such as Tower Automotive, this environment provides
an opportunity to grow both organically, by obtaining business previously
provided by other non-full service suppliers, and through acquisition, by
acquiring suppliers that further enhance product, manufacturing and service
capabilities. OEMs rigorously evaluate suppliers on the basis of product
quality, cost control, reliability of delivery, product design capability,
financial strength, new technology implementation, quality and condition of
facilities and overall management. Suppliers that obtain superior ratings are
considered for sourcing new business. Although these new OEM policies have
already resulted in significant consolidation of component suppliers in certain
segments, we believe that consolidation within the structural and suspension
component segments of the automotive industry will continue to provide
attractive opportunities to acquire or partner with companies that complement
our existing business.

Global Sourcing. Regions such as Asia, Latin America, Mexico and Eastern
Europe are expected to experience significant growth in vehicle demand over the
next ten years. OEMs are positioning themselves to reach these emerging markets
in a cost-effective manner by seeking to design and produce "world cars" which
can be designed in one vehicle center to a single global standard but produced
and sold in different geographic markets, thereby allowing OEMs to reduce design
costs, take advantage of low-cost manufacturing locations and improve product
quality and consistency. OEMs increasingly are requiring their suppliers to have
the capability to design and manufacture their products in multiple geographic
markets. In order to best meet these OEM requirements, we have over 24
manufacturing facilities outside the U.S., including locations in Canada,
Brazil, Germany, Italy, Poland, Slovakia, Hungary, Korea, and China. In
addition, our alliance/ partnership relationships provide access to new
geographic markets and customers.

A more recent trend beyond the development of "world cars," is the
consolidation of platforms across OEMs through joint development efforts. GM and
Fiat have announced plans to combine platforms across the two companies.
DaimlerChrysler with Mitsubishi and Renault with Nissan will combine platforms
as well. OEMs also plan to create common component sets across platforms in
areas such as powertrain, axles, suspensions, HVAC, and other areas, thereby
reducing the degree of product differentiation.

System/Modular Sourcing. OEMs are increasingly seeking suppliers capable
of providing complete systems or modules. A system is a group of components,
which may be dispersed throughout the vehicle, yet operate together to provide a
specific engineering function. Modules, on the other hand, consist of sub-
assemblies at a specific location in the vehicle, incorporating components from
various functional systems, which are assembled and shipped to the OEM ready for
installation in a vehicle as a unit. By outsourcing complete systems or modules,
OEMs are able to reduce their costs associated with the design and integration
of different components and improve quality by enabling their suppliers to
assemble and test major portions of the vehicle prior to production. We have
capitalized on the system/modular sourcing trend among OEMs by offering
customers higher value-added supply capabilities through an increasing focus on
the production of assemblies consisting of multiple component parts that are
welded or otherwise fastened together by us. We have the ability to supply OEMs
with modules consisting of integrated assemblies and component parts that can be
installed as a unit in a vehicle at the OEM assembly plant.

OEM Consolidation. The recent acquisition and consolidation activity among
select OEMs has not led to the disadvantage of the smaller OEMs in the industry
as previously predicted. Rather, smaller OEMs such as Peugeot, Honda,
Hyundai/Kia, and BMW have strengthened their positions in the industry and their
financial performance, while some of the larger OEMs have struggled to
successfully integrate acquisitions. Our global capabilities have allowed us to
continue to serve as a valuable supplier to those smaller producers.

PRODUCTS

We produce a broad range of structural components and assemblies, many of
which are critical to the structural integrity of a vehicle. Many of our
stamped, formed and welded components and assemblies are attached directly to
the frame of an automobile at the OEM assembly plant and comprise the major
structure of a vehicle. Our products generally can be classified into the
following categories: body structures and assemblies; lower vehicle structures;
suspension modules and systems; and suspension components. A brief summary of
each of our principal product categories follows:

PRODUCT CATEGORY/DESCRIPTION

Body structures and assemblies:

Products that form the basic upper body structure of the vehicle and
include large metal stampings such as body pillars, roof rails, side sills,
parcel shelves and intrusion beams. Current assemblies include a broad array of
highly engineered parts such as fuel filler assemblies, which are attached to
both lower vehicle and body structures. This category also includes Class A
surfaces and modules. Class A surfaces include exposed sheet metal components
such as body sides, pick-up box sides, door panels and fenders. The capability
to produce these types of components complements our substantial presence in
lower vehicle and body structures and allows for the combination of these
offerings into modules for supply to customers.

Lower vehicle structures:

Products that form the basic lower body structure of the vehicle and
include large metal stampings from both traditional and hydroforming methods,
such as pickup truck and SUV full frames, automotive engine cradles, floor pan
components and cross members. Critical to the strength and safety of vehicles,
these products carry the load of the vehicle and provide crash integrity.

Suspension modules and systems:

Products include axle assemblies which consist of stamped metal trailing
axles, assembled brake shoes, hoses and tie rods and front and rear structural
suspension modules/systems, which consist of control arms, suspension links and
value-added assemblies and systems comprised of components that it manufactures
as well as those produced by other manufacturers. Assemblies are groups of
components grouped according to their relative location, while systems are
components grouped based upon providing functionality. We sell this expertise to
OEMs who have been increasingly outsourcing assemblies and systems in order to
reduce production and inventory management costs.

Suspension components:

Products include stamped, formed and welded products such as control arms,
suspension links, track bars, spring and shock towers and trailing axles.
Critical to the ride, handling and noise characteristics of a vehicle,
suspension components are a natural extension of our larger structural
components.

Other:

We manufacture a variety of other products, including heat shields and
other precision stampings, for our OEM customers.

The following table summarizes the approximate composition by product
category of our global revenues for the last two fiscal years:

YEAR ENDED
DECEMBER 31,
------------
PRODUCT CATEGORY 2001 2000
------------------------------------------------------------ ---- ----

Body structures & assemblies (including Class A surfaces)... 39% 39%
Lower vehicle structures.................................... 36 41
Suspension modules & systems................................ 15 11
Suspension components....................................... 8 8
Other....................................................... 2 1
--- ---
TOTAL.................................................. 100% 100%
=== ===

CUSTOMERS AND MARKETING

The North American automotive manufacturing market is dominated by GM, Ford
and DaimlerChrysler, with the Japanese and European OEMs representing
approximately 23% of production in this market in 2001. We currently supply our
products primarily to Ford, DaimlerChrysler, GM, Honda, Toyota, and Nissan in
North America. As a result of past growth strategies, we have further expanded
our global presence and have increased penetration into certain existing
customers and added new customers such as Fiat, BMW, Volkswagen, Nissan, and
Hyundai/Kia.

OEMs typically award contracts that cover parts to be supplied for a
particular vehicle model or platform. Such contracts range from one year to over
the life of the model, which is generally three to ten years and do not require
the purchase by the OEM of any minimum number of parts. We also compete for new
business to supply parts for successor models and therefore are subject to the
risk that the OEM will not select us to produce parts on a successor model. We
supply parts for a broad cross-section of both new and mature models, thereby
reducing our reliance on any particular model. For example, we supply parts for
substantially all models produced by Ford, Honda and Toyota in North America and
also currently supply DaimlerChrysler with substantially all of its full frame
requirements.

Following is a summary of the global composition of significant customers
for the last two fiscal years:

YEAR ENDED
DECEMBER 31,
------------
CUSTOMER 2001 2000
------------------------------------------------------------ ---- ----

Ford/Jaguar/Volvo........................................... 35% 37%
DaimlerChrysler............................................. 25 31
Hyundai/Kia................................................. 12 4
General Motors.............................................. 4 5
Fiat........................................................ 4 4
VW Group.................................................... 4 2
Honda....................................................... 3 3
Toyota...................................................... 2 2
Nissan...................................................... 1 1
Other....................................................... 10 11
--- ---
TOTAL.................................................. 100% 100%
=== ===

Below is a summary of our sales by geographic region for the last two
fiscal years:

YEAR ENDED
DECEMBER 31,
------------
GEOGRAPHIC CATEGORY 2001 2000
------------------------------------------------------------ ---- ----

U.S. and Canada............................................. 72% 85%
Asia........................................................ 15 4
Europe...................................................... 11 10
Mexico and South America.................................... 2 1
--- ---
TOTAL.................................................. 100% 100%
=== ===

The following table presents an overview of the major models for which we
supply products:

CUSTOMER CAR MODELS TRUCK MODELS
------------------ ----------------------------------- -----------------------------------

Ford.............. Taurus/Sable, Mustang, Focus, Explorer/Mountaineer, Explorer
Escort, Crown Victoria/Grand Sport Trac, Explorer Sport,
Marquis, Cougar, Continental, Econoline, Villager, Windstar,
Lincoln LS/ Jaguar S-Type, Escape, Expedition, Excursion,
Thunderbird, Towncar, Mondeo, Ranger, F-Series LD & HD, Lincoln
Fiesta Blackwood, Transit, Medium Duty
Trucks
DaimlerChrysler... Concorde/Intrepid/300M, Neon, Ram Pick-up, Dakota, Grand
Stratus/Sebring, Sebring Cherokee, Voyager/Caravan/Town &
Convertible Country, Ram Van, Jeep Cherokee
Wrangler, Durango, Jeep Liberty, PT
Cruiser
Mercedes.......... A-Class, C-Class, E-Class, S-Class, Sprinter
SLK, CLK
General Motors.... Cadillac CTS Silverado/Sierra, Astro/Safari,
Medium Duty Trucks
Saturn............ LS/LW Saturn VUE
Opel.............. Omega, Astra, Agila, Corsa, Vectra
Honda............. Accord, Civic, Acura TL Odyssey, Passport
Mazda............. Mazda 626 Tribute, B-Series Pickup
Toyota............ Avalon, Camry, Solara, Corolla Sienna, Tacoma, Tundra, Sequoia
Nissan............ Sentra, Altima Quest, Xterra, Frontier
Isuzu............. Rodeo, Amigo
VW................ Passat, Cabrio, Jetta, Golf/Bora, Transporter/Van, LT
Gol
Audi.............. A3, A4, A6, TT, Cabrio
Skoda............. Felicia/Fabia, Octavia
BMW............... 3 Series, 5 Series, 7 Series X5 SUV
Fiat.............. Marea, Punto, Bravo/Brava, Palio, Multipla, Ducato
Panda, Stilo
Alfa Romeo........ 146/147, 156, 166 GTV, Spider
Lancia............ Lybra, Kappa, Y
Hyundai........... Teracan, Falloper, Starex, Libero,
Craco, SantaFe
Kia............... Spectra, Rio, Optima, Enterprise, Sportage, Carens, Retona, Pregio,
Potentia Carnival, Frontier

Most of the parts we produce have a lead time of two to five years from
product development to production. See "Design and Engineering Support." The
selling prices of these products are generally negotiated between us and our
customers and are typically not subject to a competitive bid process.

Sales of our products to OEMs are made directly by the sales and
engineering teams, located at our technical/customer service centers in Novi,
Michigan; Rochester Hills, Michigan; Yokohama, Japan; Turin, Italy;
Bergisch-Gladbach, Germany; Sao Paolo, Brazil; and Hyderabad, India. Through our
technical centers, we service our OEM customers and manage our continuing
programs of product design improvement and development. We periodically place
engineering staff at various customer facilities to facilitate the development
of new programs.

Our sales and marketing efforts are designed to create overall awareness of
our engineering, program management, manufacturing and assembly expertise to
acquire new business and to provide ongoing customer service. Our sales group is
organized into customer-dedicated teams within product groups. From time to
time, we also participate in industry and customer specific trade and technical
shows.

DESIGN AND ENGINEERING SUPPORT

We strive to maintain a technological advantage through investment in
product development and advanced engineering capabilities. Our manufacturing
engineering capabilities enable us to design and build high-quality and
efficient manufacturing systems, processes and equipment and to continually
improve our production processes and equipment. Our manufacturing engineers are
located at each of our manufacturing facilities. Our engineering staff currently
consists of approximately 330 full-time engineers, whose responsibilities range
from research and development, advanced product development, product design,
testing and initial prototype development to the design and implementation of
manufacturing processes.

Because assembled parts must be designed at an early stage in the
development of new vehicles or model revisions, we are increasingly given the
opportunity to utilize our product engineering resources early in the planning
process. Advanced development engineering resources create original engineering
designs, computer-aided designs, feasibility studies, working prototypes and
testing programs to meet customer specifications. We also have full-service
design capability for chassis components. Our Hyderabad, India technical center
allows for 24 hour engineering globally, thereby optimizing product design and
analysis capabilities, leading to reduced development costs.

MANUFACTURING

Our manufacturing operations consist primarily of stamping operations,
system and modular assembly operations, roll-forming and hydroforming operations
and associated coating and other ancillary operations.

Stamping involves passing metal through dies in a stamping press to form
the metal into three-dimensional parts. We produce stamped parts using over 640
precision single-stage, progressive and transfer presses, ranging in size from
150 to 4,000 tons, which perform multiple functions as raw material proceeds
through the press and is converted into a finished product. We continually
invest in our press technology to increase flexibility, improve safety and
minimize die changeover time.

After forming is completed, stampings that are to be used in assemblies are
placed in work-in-progress staging areas from which they are fed into
cell-oriented assembly operations that produce complex, value-added assemblies
through the combination of multiple parts that are welded or fastened together.
Our assembly operations are performed on either dedicated, high-volume
welding/fastening machines or on flexible-cell oriented robotic lines for units
with lower volume production runs. The assembly machines attach additional
parts, fixtures or stampings to the original metal stampings. In addition to
standard production capabilities, our assembly machines are also able to perform
various statistical control functions and identify improper welds and
attachments. We continually work with manufacturers of fixed/robotic welding
systems to develop faster, more flexible machinery. We designed several of our
welding systems.

In manufacturing our products, we use various grades and thicknesses of
steel and aluminum, including high strength hot and cold rolled, galvanized,
organically coated, stainless and aluminized steel. We also produce exposed
sheet metal components, such as exterior body panels. See "Suppliers and Raw
Materials."

OEMs have established quality rating systems involving rigorous inspections
of suppliers' facilities and operations. OEMs' factory rating programs provide a
quantitative measure of a company's success in improving the quality of its
operations. We have received quality awards from Ford (Q1) and DaimlerChrysler
(Pentastar). The automotive industry adopted a quality rating system known as
QS-9000. All of our existing operating facilities in North America have received
QS-9000 certification in compliance with the automotive industry requirements.

COMPETITION

We operate in a highly competitive, fragmented market segment of the
automotive supply industry, with a limited number of competitors generating
revenues in excess of $200 million. The number of our competitors has decreased
in recent years and is expected to continue to decrease due to the supplier
consolidation resulting from changing OEM policies. Our major competitors
include The Budd Company, a subsidiary of Thyssen-Krupp AG, Magna International,
Inc. ("Magna"), Dana Corporation and divisions of OEMs with internal stamping
and assembly operations, all of which have substantial financial resources. We
compete with other significant competitors in various segments of our product
lines and in various geographic markets. We view Magna as our strongest
competitor across most of our product lines; however, we believe that no single
competitor can provide the same range of products and capabilities as us in all
of the major international automotive markets.

We principally compete for new business both at the beginning of the
development of new models and upon the redesign of existing models. New model
development generally begins two to five years before the marketing of such
models to the public. Once a supplier has been designated to supply parts for a
new program, an OEM usually will continue to purchase those parts from the
designated producer for the life of the program, although not necessarily for a
redesign. Competitive factors in the market for our products include product
quality and reliability, cost and timely delivery, technical expertise and
development capability, new product innovation and customer service. In
addition, there is substantial and continuing pressure at the OEMs to reduce
costs, including the cost of products purchased from outside suppliers such as
us. Historically, we have been able to generate sufficient production cost
savings to offset these price reductions.

SUPPLIERS AND RAW MATERIALS

The primary raw material used to produce the majority of our products is
steel. We purchase hot and cold rolled, galvanized, organically coated,
stainless and aluminized steel from a variety of suppliers. We employ
just-in-time manufacturing and sourcing systems enabling us to meet customer
requirements for faster deliveries while minimizing our need to carry
significant inventory levels. We have not experienced any significant shortages
of raw materials and normally do not carry inventories of raw materials or
finished products in excess of those reasonably required to meet production and
shipping schedules. Raw material costs represented approximately 56% of our
revenues in 2001.

Ford, Honda and DaimlerChrysler currently purchase all of the steel that we
use for their models directly from steel producers. As a result, we have minimal
exposure to changes in steel prices for parts supplied to Ford, Honda and
DaimlerChrysler, which collectively represented 63% of our revenues in 2001.

We expect that the content level of metal in cars and light trucks will
remain constant or increase slightly due to the trend toward increased vehicle
size and a greater emphasis on metal recycling. Although the search for improved
fuel economy and weight reduction has resulted in attempts to reduce the sheet
metal content of light vehicles, an efficient, cost-effective substitute for
steel used in our structural products has not been found. While various polymers
have been used recently for fenders, hoods and decks, such products do not have
the inherent strength or structural integrity on a cost-effective basis to be
used for structural components. We are involved in ongoing evaluations of the
potential for the use of aluminum and of specialty steel in our products.
42

Other raw materials that we purchase include dies, fasteners, tubing,
springs, rivets and rubber products, all of which are available from numerous
sources.

COLLEAGUES

As of December 31, 2001, we had approximately 13,000 colleagues worldwide,
of whom approximately 5,300 are covered under collective bargaining agreements.
These collective bargaining agreements expire between 2002 and 2005. We believe
that our future success will depend in part on our ability to continue to
recruit, retain and motivate qualified personnel at all levels of Tower
Automotive. We have instituted a large number of colleague incentive programs to
increase colleague morale and expand our colleagues' participation in our
business. Since our inception in 1993, we have not experienced any work
stoppages and consider our relations with our colleagues to be good.

PROPERTIES

The following table provides information regarding our principal
facilities. We maintain several manufacturing facilities located in close
proximity to many of the high-volume vehicle assembly plants of its customers.
Our facilities are geographically located in such a way as to enable us to
optimize our management and logistical capabilities on a regional basis:

SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
--------------------------------------- --------- --------- --------------------------------

Milwaukee, Wisconsin................... 3,118,000 Owned Manufacturing
Elkton, Michigan....................... 1,100,000 Owned Manufacturing
Caserta, Italy(2 locations)............ 751,000 Owned Manufacturing
Milan, Tennessee....................... 531,000 Owned Manufacturing
Turin, Italy (4 locations)............. 512,000 Mixed Manufacturing/Office
Granite City, Illinois................. 458,000 Owned Manufacturing
Malacky, Slovakia...................... 453,600 Owned Manufacturing
Zwickau, Germany....................... 409,000 Owned Manufacturing
Clinton Township, Michigan............. 385,000 Owned Manufacturing
Gent, Belgium.......................... 376,000 Owned Manufacturing
Sebewaing, Michigan.................... 366,000 Owned Manufacturing
Toronto, Ontario....................... 329,400 Owned Manufacturing/Office
Bardstown, Kentucky.................... 300,000 Owned Manufacturing
Plymouth, Michigan..................... 294,000 Leased Manufacturing
Corydon, Indiana....................... 290,000 Leased Manufacturing
Lansing, Michigan...................... 250,000 Leased Manufacturing
Hwasung kun, Korea..................... 219,000 Owned(2) Manufacturing
Kunpo City, Korea...................... 200,000 Owned(2) Manufacturing
Sao Paolo, Brazil...................... 193,000 Owned Manufacturing/Office
Kalamazoo, Michigan.................... 180,000 Owned Manufacturing
Traverse City, Michigan................ 170,000 Owned Manufacturing
Greenville, Michigan................... 156,000 Owned Manufacturing/Office
Changchun, China....................... 140,500 Leased(1) Manufacturing
Auburn, Indiana........................ 132,000 Owned Manufacturing/Office
Kendallville, Indiana.................. 131,000 Owned Manufacturing
Bellevue, Ohio......................... 126,000 Owned Manufacturing
Bluffton, Ohio......................... 102,000 Owned Manufacturing
Bergisch-Gladbach, Germany............. 102,000 Owned Manufacturing/Engineering/Office
Shiheung City, Korea................... 93,000 Owned(2) Manufacturing

SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
--------------------------------------- --------- --------- --------------------------------

Rochester Hills, Michigan.............. 89,000 Leased Office/Engineering/Design
Chemnitz, Germany...................... 76,000 Leased Manufacturing
Barrie, Ontario........................ 72,000 Leased Manufacturing
Belcamp, Maryland...................... 70,000 Owned Manufacturing
Kwangju City, Korea.................... 64,000 Owned(2) Manufacturing
Minas Gerais, Brazil................... 59,000 Owned Manufacturing
Upper Sandusky, Ohio................... 56,000 Owned Manufacturing
Ansan City, Korea...................... 56,000 Owned(2) Manufacturing
Buchholz, Germany...................... 54,000 Owned Manufacturing
Opole, Poland.......................... 54,000 Owned Manufacturing
Youngchun City, Korea.................. 50,000 Owned(2) Manufacturing
Novi, Michigan......................... 47,000 Leased Engineering/Design/Sales
Bowling Green, Kentucky................ 46,000 Owned Manufacturing
Fenton, Missouri....................... 41,000 Leased Warehouse
Ulsan City, Korea...................... 29,000 Owned(2) Manufacturing
Tokod, Hungary......................... 22,000 Owned Manufacturing
Grand Rapids, Michigan................. 18,000 Leased Corporate Headquarters
Hyderabad, India....................... 2,800 Leased Engineering/Design
Yokohama, Japan........................ 1,000 Leased Sales

------------
(1) Facility is leased by a joint venture in which we hold a 60% equity
interest.

(2) Facility is owned by a joint venture in which we hold a 66% equity interest.

Management believes that substantially all of our property and equipment is
in good condition. In order to increase efficiency, we expect to continue to
make capital expenditures for equipment upgrades at our facilities as necessary.

We believe that our existing facilities will be adequate to meet our
production demands for the foreseeable future. Our facilities were specifically
designed for the manufacturing of our products. The utilization and capacity of
such facilities are dependent upon the mix of products being produced by us.

LEGAL PROCEEDINGS

We are not currently involved in any material lawsuits. We believe we
maintain adequate insurance, including product liability coverage. We
historically have not been required to pay any material liability claims.

ENVIRONMENTAL MATTERS

We are subject to foreign, federal, state and local laws and regulations
governing the protection of the environment and occupational health and safety,
including laws regulating the generation, storage, handling, use and
transportation of hazardous materials; the emission and discharge of hazardous
materials into the soil, ground or air; and the health and safety of our
colleagues. We are also required to obtain permits from governmental authorities
for certain operations. We cannot assure that we have been or will be at all
times in complete compliance with such laws, regulations and permits. If we
violate or fail to comply with these laws, regulations or permits, we could be
fined or otherwise sanctioned by regulators. In some instances, such a fine or
sanction could be material. We do not expect that our capital expenditures for
environmental controls will be material for the current or succeeding fiscal
year.

third party sites to which these facilities sent wastes containing hazardous
substances. The amount of such liability could be material.

As part of our acquisition of Active in 1999, we acquired a facility
located in Sebewaing, Michigan. In 2001, the Sebewaing facility received a claim
from the Village of Sebewaing for costs associated with the removal of sludge
from the Village's wastewater treatment lagoon. The Village alleged that
wastewater discharges from the facility resulted in contamination of the sludge,
which, in turn, increased the disposal costs incurred by the Village. The amount
of the Village's claim is $208,000. We are in discussions with the Village
regarding the resolution of this claim. We also acquired from Active a facility
located in Elkton, Michigan. We are in the process of investigating
contamination at the Elkton facility, and at a nearby waste disposal site that
was allegedly used for the disposal of wastes from the Elkton facility in the
1970s. These investigations are being conducted under the oversight of the
Michigan Department of Environmental Quality ("MDEQ"). Because the MDEQ has not
yet approved a Remedial Action Plan for these sites, the cost to remediate the
sites is not known, although it is not expected to exceed the $14 million in the
escrow established for indemnification, described below.

In connection with our acquisition of Active, we are entitled to
indemnification for losses (including reasonable legal fees and expenses)
resulting from claims arising from certain pre-closing matters, including
pre-closing environmental matters. The indemnity covers losses that exceed $1
million, up to the amount of escrowed funds, which is currently about $14
million. The indemnity is limited to the claims we submitted within two years
after acquiring Active. We submitted several claims under this indemnity,
including claims for the Sebewaing wastewater matter, the Elkton contamination
matters described above and several non-environmental claims. We are currently
in negotiations with the former shareholders of Active to reach agreement
regarding the amount funds that will be paid out of the escrow to settle
indemnified claims.

We acquired Algoods, Inc. in 2000, with a facility in Toronto, Ontario.
Prior operations had resulted in contamination at the facility. Alcan Aluminum,
Ltd., a former owner of the property, is in the process of investigating and
remediating this contamination. Until 2008, we have agreed to contribute up to
$100,000 (CDN) per year for remediation activities. After 2008, we have agreed
to be responsible for on-site contamination and Alcan has agreed to be
responsible for off-site contamination. In 2000, we had preliminarily estimated
that the present value of our cost to address these issues was $5.5 million
(CDN).

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to our
directors and executive officers as of December 31, 2001:

NAME AGE POSITION
---- --- --------

S.A. Johnson.............................. 61 Chairman of the Board of Directors
Dugald K. Campbell........................ 55 President, Chief Executive Officer and
Director
James W. Arnold........................... 49 Vice President
Anthony A. Barone......................... 52 Vice President and Chief Financial Officer
Richard S. Burgess........................ 47 Vice President
Kathy J. Johnston......................... 44 Vice President
Tommy G. Pitser........................... 54 Vice President
Scott D. Rued............................. 45 Vice President and Director
Antonio R. Zarate......................... 57 Vice President
Jurgen M. Geissinger...................... 42 Director
Ali Jenab................................. 39 Director
Joe Loughrey.............................. 52 Director
James R. Lozelle.......................... 56 Director
Georgia R. Nelson......................... 51 Director
Enrique Zambrano.......................... 46 Director

S.A. (TONY) JOHNSON has served as Chairman and a director since April
1993. Mr. Johnson is the founder of Hidden Creek Industries ("Hidden Creek"), a
private industrial management company based in Minneapolis which has provided
certain management and other services to Tower Automotive. Mr. Johnson is also
the Managing Partner of J2R Partners ("J2R"), an investment partnership that
participated in the acquisition of R.J. Tower Corporation. Prior to forming
Hidden Creek, Mr. Johnson served from 1985 to 1989 as Chief Operating Officer of
Pentair, Inc., a diversified industrial company. From 1981 to 1985, Mr. Johnson
was President and Chief Executive Officer of Onan Corp., a diversified
manufacturer of electrical generating equipment and engines for commercial,
defense and industrial markets. Mr. Johnson currently serves as Chairman and a
director of Dura Automotive Systems, Inc., a manufacturer of mechanical
assemblies and integrated systems for the automotive industry, and served as
Chairman and a director of Automotive Industries Holding, Inc., a supplier of
automotive interior trim components, from May 1990 until its sale to Lear
Corporation in August 1995.

DUGALD K. CAMPBELL has served as President, Chief Executive Officer and a
director since December 1993. From 1991 to 1993, Mr. Campbell served as a
consultant to Hidden Creek. From 1988 to 1991, he served as Vice President and
General Manager of the Sensor Systems Division of Siemens Automotive, a
manufacturer of engine management systems and components. From 1972 to 1988, he
held various executive, engineering and marketing positions with Allied
Automotive, a manufacturer of vehicle systems and components and a subsidiary of
AlliedSignal, Inc.

JAMES W. ARNOLD has served as Vice President since 1999, with current
responsibility for our North American and Asian strategy. Mr. Arnold joined
Tower Automotive in 1998. From 1977 to 1998, Mr. Arnold held a variety of
manufacturing, sales, marketing and Asian general management positions at
AlliedSignal.

ANTHONY A. BARONE has served as Vice President and Chief Financial Officer
since May 1995. From 1984 to 1995, Mr. Barone served as Chief Financial Officer
of O'Sullivan Corporation, a manufacturer of interior trim components for the
automotive industry.

RICHARD S. BURGESS has served as Vice President with responsibility for
colleague growth and development since January 1996. From June 1994 to January
1996, Mr. Burgess served as the colleague growth and development leader during
the start-up of the Bardstown, Kentucky operation. From October 1991 to June
1994, Mr. Burgess filled various roles in colleague growth and development of
R.J. Tower Corporation.

KATHY J. JOHNSTON has served as Vice President since June 2000 with
responsibility for enterprise strategy and commercial development. From 1997 to
2000, Ms. Johnston served as Vice President Planning and Business Development at
TRW Automotive in Cleveland, Ohio. From 1981 to 1997, Ms. Johnston served in
finance, sales and marketing, purchasing, operations and strategic planning
roles at TRW's vehicle safety systems group in Detroit, Michigan.

TOMMY G. PITSER has served as Vice President since 1996, with current
responsibility for our European strategy. Mr. Pitser previously had
responsibility for our South American strategy and our joint venture investment
in China and operations in Barrie, Ontario; Plymouth, Michigan; Yokohama, Japan;
Romulus, Michigan; Manchester, Michigan and Novi, Michigan, since May 1996.
Prior to joining us, Mr. Pitser served in various sales and marketing capacities
at MSTI. Prior to joining MSTI, Mr. Pitser served as Market Director-Automotive
at AE Goetze North America. From 1969 to 1992, Mr. Pitser was an employee of
Borg-Warner Corporation, most recently as General Manager-Marine & Industrial
Transmissions.

SCOTT D. RUED has served as Vice President and a director since April
1993. Mr. Rued is the Chief Executive Officer and President of Hidden Creek. Mr.
Rued, a partner of J2R, has also served as Executive Vice President and Chief
Financial Officer of Hidden Creek from January 1994 through 2001, and served as
its Vice President--Finance and Corporate Development from June 1989 through
1993. Mr. Rued served as Vice President, Chief Financial Officer and a director
of Automotive Industries Holding, Inc. from April 1990 until its sale to Lear
Corporation in August 1995. Mr. Rued is also a director of The Rottlund Company,
Inc., a corporation engaged in the development and sale of residential real
estate.

ANTONIO R. ZARATE has served as Vice President since May 2000 with
responsibility for our strategy in Mexico and South America. From 1994 to 2000,
Mr. Zarate served as President of the Automotive Division of Proeza, S.A. de
C.V., a diversified international company that has operations primarily in the
automotive and citrus juice processing industries.

JURGEN M. GEISSINGER has served as a director since May 2000. Dr.
Geissinger has served as President and Chief Executive Officer of INA Holding
GmbH & Co. KG, a global manufacturer of bearings, linear guidance systems,
automotive transmissions and engine systems since November 1998. From 1992 to
October 1998, Dr. Geissinger served in various positions at ITT Automotive, most
recently as Senior Vice President, with responsibility for the Brakes and
Chassis Engineering Division worldwide.

ALI JENAB has served as a director since January 2001. Mr. Jenab was named
President and Chief Operating Officer of VA Linux Systems, Inc. in February
2001. From August 2000, until February 2001, Mr. Jenab served as that company's
Senior Vice President and General Manager, Systems Division. From 1983 through
August 2000, Mr. Jenab held various positions at Amdahl Corporation, a provider
of high-end integrated computing solutions.

JOE LOUGHREY has served as a director since November 1994. Mr. Loughrey
joined Cummins Inc. in 1974 and has served as Executive Vice President and
President--Engine Business since October 1999. Before then, Mr. Loughrey served
as Executive Vice President and Group President--Industrial and Chief Technical
Officer from 1996 to 1999. Mr. Loughrey is also a director of Sauer-Danfoss,
Inc., a worldwide leader in the design, manufacture and sale of engineered
hydraulic systems and components.

JAMES R. LOZELLE has served as a director since May 1994. Mr. Lozelle
served as Executive Vice President for Tower Automotive, with responsibility for
Tower Automotive's operations in Milwaukee, Wisconsin and Roanoke, Virginia,
from April 1997 to January 1999. From the acquisition of Edgewood in May 1994
until March 1997, Mr. Lozelle served at the Tower Automotive Technical Centers,
with responsibility for advanced product development and customer service. Mr.
Lozelle served as President of Edgewood from 1982 until it was acquired by Tower
Automotive. Mr. Lozelle is chairman of the Near Zero Stamping research project
of the Autobody Consortium.
47

GEORGIA R. NELSON was appointed to the board of directors in May 2001. Ms.
Nelson has served as President of Midwest Generation EME, LLC, an Edison
International company since it was established in 1999 as a subsidiary of Edison
Mission Energy. Midwest Generation is a wholesale power generation company.
Since January 1, 2002, Ms. Nelson has served as General Manager of Edison
Mission Energy--Americas, a global independent power operating, development and
trading company. From 1996 to 1999, Ms. Nelson was Senior Vice President of
Worldwide Operations and Division President of the Americas region of Edison
Mission Energy. From 1993 to 1996, she served as Senior Vice President of
Southern California Edison, a large U.S. electric utility.

ENRIQUE ZAMBRANO has served as a director since December 1997. Mr.
Zambrano has served as Chief Executive Officer and a director of Proeza, S.A. de
C.V., a diversified international company that has operations primarily in the
automotive and citrus juice processing industries, since 1988. Mr. Zambrano is
also a director of IMSA, a steel processing company, Pyosa, a chemical special
manufacturing company, SENDA, a leading regional transportation company, XIGNUX,
a Mexican private industrial conglomerate, and ITESM, the largest private
University in Mexico.

There are no family relationships between any of the directors or any of
the executive officers.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Two of our directors, Messrs. S.A. Johnson and Scott Rued, are partners in
Hidden Creek. Tower Automotive was formed in April 1993 at the direction of
Hidden Creek to acquire R.J. Tower Corporation in a leveraged transaction. The
principal equity investors in such acquisition were Onex Corporation, a publicly
owned holding company based in Canada ("Onex"), and J2R, an investment
partnership formed by the partners of Hidden Creek. Onex and J2R sold
substantially all of their Tower Automotive common stock in 1996 and 1997 and,
as a result, do not have a material economic interest in any of the securities
or capital stock of Tower Automotive. Since 1993, Hidden Creek has provided
certain strategic, financial and acquisition services to us, including analyzing
acquisition opportunities, conducting due diligence and contract negotiations,
and assisting in financing activities. To facilitate such services, certain
employees of Hidden Creek serve as non-employee officers of Tower Automotive. We
currently pay Hidden Creek approximately $20,000 per month for general
management consulting services, plus reimbursement of expenses, and in the past
we have retained them as advisers for certain strategic, financial, and
acquisition services, for which we pay them negotiated fees. We expect to pay
Hidden Creek a fee of approximately $250,000 in connection with this offering.
Our total payments to Hidden Creek were approximately $600,000 in 2001,
$4,400,000 in 2000 and $3,100,000 in 1999. We believe that the terms of such
transactions with Hidden Creek are no less favorable than those that could have
been obtained pursuant to transactions with unaffiliated parties.

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

Unless otherwise noted, the following table sets forth certain information
regarding ownership of our common stock as of March 22, 2002, by (1) the
beneficial owners of more than 5% of our common stock, (2) each of our directors
and named executive officers, and (3) all directors and named executive officers
as a group. To our knowledge, each of such stockholders has sole voting and
investment power as to the shares shown unless otherwise noted. Beneficial
ownership of the common stock listed in the table has been determined in
accordance with the applicable rules and regulations promulgated under the
Securities Exchange Act of 1934.

BENEFICIAL OWNERSHIP OF
COMMON STOCK(1)
-------------------------
DIRECTORS, NUMBER OF PERCENT OF
OFFICERS AND 5% SHAREHOLDERS SHARES CLASS
------------------------------------------------------------ ----------- ----------

S.A. Johnson(2)............................................. 315,610 *
Dugald K. Campbell(2)(3).................................... 574,723 1.2%
James W. Arnold(2).......................................... 63,058 *
Anthony Barone(2)........................................... 129,415 *
Tom G. Pitser(2)............................................ 104,905 *
Antonio Zarate(2)........................................... 41,604 *
Scott D. Rued(2)............................................ 79,185 *
Jurgen M. Geissinger(2)..................................... 7,640 *
Ali Jenab(2)................................................ 3,027 *
Joe Loughrey(2)............................................. 77,298 *
James R. Lozelle(2)......................................... 434,925 *
Georgia Nelson.............................................. 0 0
Enrique Zambrano(2)......................................... 17,298 *
American Express Financial Corporation(4)................... 2,535,588 5.2%
Dimensional Funds Advisors, Inc.(5)......................... 3,573,000 7.3%
Hartford Mutual Funds, Inc.(6).............................. 2,429,045 5.0%
Morgan Stanley Dean Witter & Co.(7)......................... 3,194,090 6.5%
Pioneer Global Asset Management(8).......................... 2,956,810 6.0%
State of Wisconsin Investment Board(9)...................... 4,875,000 9.9%
Wellington Management Company, LLP(10)...................... 2,454,545 5.0%
All Directors and Officers as a group (15 persons).......... 1,958,565 4.0%

------------
* Less than one percent.

(1) The number of shares includes shares that may be purchased under options
that are exercisable in 60 days. The percent of class is calculated based
on the number of shares outstanding plus such option shares.

(2) Includes the following number of shares issuable as deferred compensation
for the following individuals: Mr. Johnson--17,298; Mr. Campbell--90,147;
Mr. Arnold--13,435; Mr. Barone--23,628; Mr. Pitser--23,100; Mr.
Zarate--3,604; Mr. Rued--7,207; Mr. Geissinger--7,640; Mr. Jenab--3,027;
Mr. Loughrey--17,298; Mr. Lozelle--18,223; and Mr. Zambrano--17,298.

(3) Includes 259,495 shares held in trusts, of which Mr. Campbell or his wife
are the trustees. Mr. Campbell disclaims beneficial ownership of the shares
held in trust.

(4) American Express Company ("AEC") and American Express Financial Corporation
("AEFC") each reported as of December 31, 2001, shared dispositive power
with respect to 2,535,588 shares of our common stock and shared voting
power with respect to 537,000 shares of our common stock. The address for
AEFC is 200 AXP Financial Center, Minneapolis, Minnesota 55474.

(5) Dimensional Fund Advisors, Inc. reported as of January 30, 2002, sole
voting and dispositive power with respect to 3,573,000 shares of our common
stock. The address for Dimensional Fund Advisors, Inc. is 1299 Ocean
Avenue, 11th Floor, Santa Monica, California 90401.

(footnotes on next page)
50

(6) The Hartford Mutual Funds, Inc. reported as of February 14, 2002, shared
voting and dispositive power with respect to 2,429,045 shares of our common
stock. Its address is 200 Hopmeadow Street, Simsbury, CT 06089.

(7) Morgan Stanley Dean Witter & Co. reported as of February 13, 2002, shared
voting power with respect to 3,044,390 shares of our common stock and
shared dispositive power with respect to 3,194,090 shares of our common
stock. The address for Morgan Stanley Dean Witter & Co. is 1585 Broadway,
New York, New York 10036.

(8) Pioneer Global Asset Management, S.p.A reported as of January 28, 2002,
sole voting and dispositive power with respect to 2,956,810 shares of our
common stock. The address for Pioneer Global Asset Management is Galleria
San Carlo 6, 20122 Milan, Italy.

(9) The State of Wisconsin Investment Board reported as of February 15, 2002,
sole voting and dispositive power with respect to 4,875,000 shares of our
common stock. The address of the Board is P.O. Box 7842, Madison, Wisconsin
53707.

(10) Wellington Management Company, LLP reported as of February 14, 2002, shared
voting and dispositive power with respect to 2,454,545 shares of our common
stock. The address for Wellington Management Company, LLP is 75 State
Street, Boston, MA 02109.

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of Tower Automotive consists of 200,000,000
shares of common stock, $0.01 par value per share, of which 48,222,012 shares
were issued and outstanding as of March 15, 2002 and 5,000,000 shares of
preferred stock, $1.00 par value per share, of which no shares are issued or
outstanding. The following description of our capital stock and certain
provisions of our amended and restated certificate of incorporation and by-laws
is a summary of all material terms of our capital stock and is qualified in its
entirety by the provisions of the amended and restated certificate of
incorporation and by-laws, copies of which have been filed with the SEC and are
available for inspection. See "Where You Can Find More Information."

COMMON STOCK

Holders of our common stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders, including the election of
directors. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election if they choose to do so. The amended and restated
certificate of incorporation does not provide for cumulative voting for the
election of directors. Holders of common stock will be entitled to receive
ratably such dividends, if any, as may be declared from time to time by our
board of directors out of funds legally available therefor, and will be entitled
to receive, pro rata, all assets of Tower Automotive available for distribution
to such holders upon liquidation. Holders of common stock have no preemptive,
subscription or redemption rights. All outstanding shares of our common stock,
including the shares offered hereby, are fully paid and nonassessable. As of
March 15, 2002, our common stock was held of record by 2,893 stockholders.

As of March 15, 2002, we had reserved for issuance:

-- 7,600,000 shares of common stock under our stock option plans and
employee stock discount purchase plans, of which options to purchase
2,998,770 shares were outstanding;

-- 15,926 shares issuable upon the conversion of notes issued in
connection with the acquisition of Edgewood;

-- 8,424,908 shares issuable upon conversion of our 6 3/4% Convertible
Trust Preferred Securities; and

-- 7,728,850 shares issuable upon conversion of our 5% Convertible
Subordinated Notes due 2004.

PREFERRED STOCK

Pursuant to the amended and restated certificate of incorporation, we are
authorized to issue "blank check" preferred stock, which may be issued from time
to time in one or more series upon authorization by our board of directors. The
board of directors, without further approval of the stockholders, is authorized
to fix the dividend rights and terms, conversion rights, voting rights,
redemption rights and terms, liquidation preferences, and any other rights,
preferences, privileges and restrictions applicable to each series of the
preferred stock. The issuance of preferred stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes could, among
other things, adversely affect the voting power of the holders of common stock
and, under certain circumstances, make it more difficult for a third party to
gain control of us, discourage bids for our common stock at a premium or
otherwise adversely affect the market price of the common stock.

ANTI-TAKEOVER EFFECTS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS

Some provisions of our certificate of incorporation and bylaws may be
deemed to have an anti-takeover effect and may delay or prevent a tender offer
or takeover attempt that a stockholder might consider to be in its best
interest, including those attempts that might result in a premium over the
market price for the shares held by stockholders.

These provisions include:

Board Vacancies. Our certificate of incorporation authorizes the board of
directors to fill vacant directorships or increase the size of the board of
directors, which may deter a stockholder from removing incumbent directors and
simultaneously gaining control of the board of directors by filling the
vacancies created by this removal with its own nominees.

Cumulative Voting. Our certificate of incorporation does not authorize our
stockholders the right to cumulative voting in the election of directors. As a
result, stockholders may not aggregate their votes for a single director.

Special Meetings of Stockholders. Our certificate of incorporation
provides that special meetings of our stockholders may be called only by the
chairman of the board of directors, the president and chief executive officer,
any member of the board of directors or holders of at least 25% of the shares
entitled to vote generally in the election of directors.

Authorized but Unissued Shares. Our authorized but unissued shares of
common stock and preferred stock are available for future issuance without
stockholder approval. These additional shares may be utilized for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions and employee benefit plans. The existence of
authorized but unissued shares of common stock and preferred stock could render
more difficult or discourage an attempt to obtain control of a majority of our
common stock by means of a proxy contest, tender offer, merger or otherwise.

SECTION 203 OF DELAWARE GENERAL CORPORATION LAW

We are subject to the "business combination" statute of the Delaware
General Corporation Law. In general, such statute prohibits a publicly held
Delaware corporation from engaging in various "business combination"
transactions with any "interested stockholder" for a period of three years after
the date of the transaction in which the person became an "interested
stockholder," unless:

-- the transaction is approved by the board of directors prior to the
date the interested stockholder obtained such status,

-- upon consummation of the transaction which resulted in the
stockholder becoming an "interested stockholder," the "interested
stockholder" owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commended,
excluding specified shares, or

-- on or subsequent to such date the "business combination" is approved
by the board of directors and authorized at an annual or special
meeting of the stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the "interested stockholder."

A "business combination" includes mergers, asset sales and other
transactions resulting in financial benefit to a stockholder. An "interested
stockholder" is a person who, together with affiliates and associates, owns (or
within three years, did own) 15% or more of a corporation's voting stock. The
statute could prohibit or delay mergers or other takeover or change in control
attempts with respect to us and, accordingly, may discourage attempts to acquire
us.

TRANSFER AGENT

Equiserve Trust Company N.A. is the transfer agent for our common stock.

DESCRIPTION OF CERTAIN FINANCING ARRANGEMENTS

SENIOR CREDIT FACILITY

Our wholly owned subsidiary, R.J. Tower Corporation, entered into a senior
credit facility on July 25, 2000 with Bank of America, N.A., as administrative
agent, and J.P. Morgan Chase Bank, as syndication agent, and other lenders named
therein. The senior credit facility provides for a six-year multicurrency
revolving credit facility of up to $825.0 million, with a letter of credit
sublimit of $100.0 million. The senior credit facility also provides a $325.0
million amortizing term loan. Borrowings under the revolving credit facility may
be used for working capital and other general corporate purposes. As of December
31, 2001, R.J. Tower Corporation had total borrowings under the senior credit
facility of approximately $426.0 million. At December 31, 2001, we had borrowed
approximately $101 million under the revolving credit facility. In order to
borrow under the revolving credit facility, we must meet certain covenant
ratios. Based on these covenants, the amount of unused availability under the
revolving facility was approximately $103 million at December 31, 2001. Assuming
we had completed this offering and used the net proceeds to reduce our term loan
borrowings under our senior credit facility as of December 31, 2001, we would
have had approximately $307.2 million of unused availability under the revolving
facility. We do not have the ability to reborrow amounts repaid under the term
loan. We expect to continue to incur borrowings under our revolving facility
from time to time for general corporate and working capital purposes.

The senior credit facility has a final maturity of July 2006. Loans made
under the term loan were available in a single borrowing on July 25, 2000. The
term loan is generally subject to quarterly amortization of principal, based
upon the annual amounts set forth below:

YEAR AMOUNT
------------------------------------------------------------ -----------

2002........................................................ $55,000,000
2003........................................................ 70,000,000
2004........................................................ 70,000,000
2005........................................................ 82,500,000
2006........................................................ 47,500,000

Tower Automotive and each of our existing and future domestic subsidiaries
guarantee the indebtedness under the senior credit facility, which may also be
guaranteed in the future by certain material foreign subsidiaries of R.J. Tower
Corporation in the event that such a guarantee does not result in material
adverse tax consequences to R.J. Tower Corporation. Currently, no foreign
subsidiaries are guarantors under the senior credit facility.

The borrowings under the senior credit facility bear interest at a rate
equal to (a) the Eurodollar rate plus the Applicable Margin or (b) the Base Rate
(defined as the higher of (i) the Bank of America reference rate and (ii the
Federal Funds rate plus .50%) plus the Applicable Margin. The Applicable Margin
is determined as follows:

BASIS POINTS
---------------------------------------------------------------------------
APPLICABLE
APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
RATIO OF TOTAL EURODOLLAR RATE COMMITMENT BASE RATE
FUNDED DEBT TO EBITDA(1) LOANS FEE LOANS
---------------------------------------- --------------------------------------------- -------------- ----------

less than2.25x.......................... 100.0 20.0 0.0
greater than or equal to2.25x and less
than2.75x............................. 125.0 25.0 0.0
greater than or equal to2.75x and less
than3.25x............................. 150.0 35.0 25.0
greater than or equal to3.25x and less
than3.75x............................. 175.0 40.0 50.0
greater than or equal to3.75x........... 200.0 50.0 75.0

------------
(1) As defined in the senior credit facility.

The senior credit facility requires R.J. Tower Corporation to meet certain
financial tests, including a minimum interest coverage ratio (defined as EBITDA
to interest expense) of 2.75x on July 25, 2000 and

increasing to 3.75x as of June 30, 2004 and a maximum leverage ratio (defined as
indebtedness to EBITDA) of 4.25x on July 25, 2000 and decreasing to 3.25x as of
June 30, 2004. The senior credit facility also contains covenants which, among
other things, limit:

-- the incurrence of additional indebtedness (subject to a basket of up
to 15% of net worth) and contingent obligations,

-- the creation of liens and encumbrances,

-- restricted payments (subject to a $125 million basket for cash
dividends in connection with common stock repurchases),

-- additional investments,

-- prepayments of subordinated indebtedness,

-- asset sales, acquisitions, joint ventures, mergers and
consolidations,

-- transactions with affiliates, and

-- other matters customarily restricted in such agreements.

The senior credit facility contains customary events of default including
but not limited to:

-- payment defaults,

-- breach of representations and warranties,

-- noncompliance with covenants,

-- bankruptcy,

-- judgments in excess of specified amounts,

-- failure of any guaranty or pledge agreement supporting the senior
credit facility to be in full force and effect,

-- defaults under other instruments or agreements of indebtedness, and

-- a change of control (as such term is defined in the senior credit
facility).

9.25% SENIOR NOTES

In July 2000, R.J. Tower Corporation issued E150,000,000 of 9.25% Senior
Notes due 2010 pursuant to an indenture, dated as of July 25, 2000, among R.J
Tower Corporation, as issuer, the guarantors named therein and U.S. Trust
Corporation, as trustee. The Euro-denominated senior notes are limited in
aggregate principal amount to E200,000,000. The senior notes will mature on
August 1, 2010 and interest on the senior notes is payable semiannually on
February 1 and August 1 of each year. The senior notes are listed on the
Luxembourg Stock Exchange. The net proceeds of the offering of the senior notes
were used to repay outstanding indebtedness.

The senior notes are unsecured obligations of R.J. Tower Corporation, equal
in right of payment with all other unsecured and unsubordinated indebtedness of
R.J. Tower Corporation and senior in right of payment to the outstanding and
future subordinated indebtedness of R.J. Tower Corporation. Each of the U.S.
subsidiaries of R.J. Tower Corporation that have guaranteed indebtedness under
the senior credit facility unconditionally guarantee payment on a joint and
several basis of all of R.J. Tower Corporation's obligations under the senior
notes indenture and the senior notes. Tower Automotive unconditionally
guarantees the senior notes on a senior unsecured basis. The guarantees are
unsecured obligations of the guarantors, equal in right of payment with all
other unsecured and unsubordinated indebtedness of the guarantors and senior in
right of payment to the outstanding and future subordinated indebtedness of the
guarantors.

The senior notes are redeemable at any time and from time to time at the
option of R.J. Tower Corporation, in whole or in part, upon not less than 30 nor
more than 60 days' notice to each holder. The redemption price is equal to the
greater of:

-- 100% of the principal amount of the senior notes to be redeemed, or

-- as determined by Chase Manhattan International Limited or Bank of
America International Limited, the sum of the present values of the
remaining scheduled payments of principal and interest on the senior
notes discounted to the date of redemption, on a semiannual basis, at
the Reference Dealer Rate (defined to mean with respect to Chase
Manhattan International Limited or Bank of America International
Limited and any redemption date, the midmarket annual yield to
maturity, as determined by Chase Manhattan International Limited or
Bank of America International Limited, of the German Government Bund
5.25% due July 1, 2010 or, if that security is no longer outstanding,
a similar security in the reasonable judgment of Chase Manhattan
International Limited or Bank of America International Limited, at
11:00 a.m., London time, on the third business day in London
preceding such redemption date quoted in writing to U.S. Trust
Corporation) plus 50 basis points,

plus accrued and unpaid interest to the date of redemption.

If a change of control occurs, R.J. Tower Corporation will be required to
offer to purchase the senior notes at 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest and liquidated damages, if any, to the
date of purchase. Change of control is generally defined under the senior notes
indenture to mean:

-- the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of R.J. Tower Corporation and its subsidiaries
taken as a whole to any person (as that term is used in Section
13(d)(3) of the Exchange Act),

-- the adoption of a plan relating to the liquidation or dissolution of
R.J. Tower Corporation,

-- the first day on which we cease, either directly or indirectly, to
own all of the outstanding equity interest of R.J. Tower Corporation,

-- the consummation of any transaction (including, without limitation,
any merger or consolidation) the result of which is that any "person"
(as defined above), other than an employee trust sponsored by R.J.
Tower Corporation, becomes the beneficial owner, directly or
indirectly, of more than 50% of the voting stock of R.J. Tower
Corporation, measured by voting power rather than number of shares,
or

-- the first day on which a majority of the members of the board of
directors of R.J. Tower Corporation are not continuing directors
(defined to include members of the board of directors of R.J. Tower
Corporation on the date of the senior notes indenture or members who
were nominated for election or elected to such board of directors
with the approval of a majority of the continuing directors who were
members of the board of directors at the time of such nomination or
election).

The senior notes indenture also contains covenants which, among other
things, limit:

-- the creation of liens and encumbrances, and

-- certain sale and lease-back transactions with respect to the owned
manufacturing facility properties of R.J. Tower Corporation or any
subsidiary.

The senior notes indenture includes various events of default customary for
such type of agreements, such as failure to pay principal and interest when due
on the senior notes, cross defaults on other indebtedness and certain events of
bankruptcy, insolvency and reorganization.

5.0% CONVERTIBLE SUBORDINATED NOTES

The 5.0% convertible subordinated notes were issued pursuant to an
indenture, dated as of July 28, 1997, between Tower Automotive and The Bank of
New York, as trustee. The convertible notes are limited in
56

aggregate principal amount of $200.0 million. The net proceeds from the sale of
the convertible notes were used to repay a portion of the bank indebtedness
incurred by R.J. Tower Corporation to finance the acquisitions of APC in April
1997 and SIMES in May 1997. The convertible notes were initially sold in an
underwritten private placement.

The convertible notes will mature on August 1, 2004. The convertible notes
bear interest at the rate of 5.0% per annum, payable semiannually on February 1
and August 1 of each year, to the persons in whose names such convertible notes
are registered at the close of business on the January 15 and July 15
immediately preceding such interest payment date.

The convertible notes are among our general unsecured obligations,
subordinated in right of payment to all of our existing and future senior
indebtedness. Senior indebtedness is generally defined under the convertible
notes indenture to include, subject to limited exceptions, all our obligations
to pay the principal of, and premium, if any, interest and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, any of our indebtedness, unless the instrument
creating or evidencing such indebtedness provides that such indebtedness is not
senior or superior in right of payment to the convertible notes or which is pari
passu with, or subordinated to, the convertible notes. In addition, the
convertible notes are effectively subordinated to all of the obligations of our
subsidiaries, including trade creditors. The convertible notes indenture does
not restrict our or our subsidiaries' incurrence of senior indebtedness or other
indebtedness.

The convertible notes are convertible into shares of common stock of us at
any time prior to the close of business on August 1, 2004, unless previously
redeemed or repurchased, at a conversion price of $25.88 per share (equivalent
to a conversion rate of 38.6473 shares per $1,000 principal amount of
convertible notes), subject to adjustment in certain events, for an aggregate of
7,728,850 shares of common stock.

The convertible notes can be redeemed at our option, in whole or in part,
upon not less than 30 nor more than 60 days' notice to each holder, at the
following redemption prices (expressed as percentages of the principal amount)
if redeemed during the 12-month period commencing August 1 of the years
indicated below, in each case (subject to the right of holders of records on a
record date to receive interest due on an interest payment date that is on or
prior to such redemption date) together with accrued and unpaid interest and
liquidated damages, if any, to the redemption date:

YEAR PERCENTAGE
------------------------------------------------------------ ----------

2000........................................................ 102.857%
2001........................................................ 102.143
2002........................................................ 101.429
2003........................................................ 100.714
2004........................................................ 100.000

If a change of control occurs, we will be required to offer to purchase the
convertible notes at 100% of the principal amount thereof, plus accrued and
unpaid interest and liquidated damages, if any, to the date of purchase. Change
of control is generally defined under the convertible notes indenture to mean:

-- an event or series of events as a result of which any person or group
is or becomes, directly or indirectly, the beneficial owner of more
than 50% of the combined voting power of the then outstanding
securities entitled to vote generally in elections of our (or any
successor entity's) board of directors, managers or trustees, as
applicable;

-- the completion of any consolidation with or merger by us into any
other person, or our sale, conveyance, transfer or lease of all or
substantially all of our assets to any person, or any merger of any
other person into us in a single transaction or series of related
transactions, and, our outstanding stock is changed or exchanged,
unless our stockholders immediately following such transaction own,
directly or indirectly, at least a majority of the combined voting
power of the outstanding voting securities of the person resulting
from such transaction in substantially the same proportion as their

ownership of the securities entitled to vote generally in elections
of our (or any successor entity's) board of directors immediately
before such transaction; or

-- such time as the continuing directors do not constitute a majority of
our board of directors (or, if applicable, the board of directors of
any successor corporation).

The convertible notes indenture does not contain any financial covenants or
any restrictions on the payment of dividends, the repurchase of securities of us
or the incurrence of senior indebtedness. The convertible notes indentures
contains no covenants or other provisions to afford protection to holders of
convertible notes in the event of a highly leveraged transaction or a change of
control of Tower Automotive, except to the limited extent described above
relating to a change of control.

CONVERTIBLE TRUST PREFERRED SECURITIES

On June 9, 1998, Tower Automotive Capital Trust, or "Trust," a statutory
business trust created at Tower Automotive's direction, completed the offering
of $258.8 million of 6 3/4% Convertible Trust Preferred Securities resulting in
net proceeds of approximately $249.7 million. The net proceeds of the offering
of the Trust Preferred Securities were used to repay outstanding indebtedness.
We own all of the outstanding common securities issued by the Trust. The sole
assets held by the Trust are the 6 3/4% subordinated convertible debentures due
2018 that we issued in an aggregate principal amount of $266.8 million. The
Trust Preferred Securities are redeemable, in whole or in part, on or after June
30, 2001, and all Trust Preferred Securities must be redeemed no later than June
30, 2018. The Trust Preferred Securities are subject to redemption at the
following percentages of the liquidation amount thereof plus accrued and unpaid
distributions, if any, to the date fixed for redemption if redeemed during the
twelve-month period commencing on June 30, in each of the following years
indicated:

YEAR PERCENTAGE
------------------------------------------------------------ ----------

2001........................................................ 104.725%
2002........................................................ 104.050
2003........................................................ 103.375
2004........................................................ 102.700
2005........................................................ 102.025
2006........................................................ 101.350
2007........................................................ 100.675
2008 and thereafter......................................... 100.000

The Trust Preferred Securities are convertible, at the option of the
holder, into our common stock at a rate of 1.6280 shares of common stock for
each Trust Preferred Security, which is equivalent to a conversion price of
$30.713 per share.

UNDERWRITERS

Under the terms and subject to the conditions contained in an underwriting
agreement dated the date of this prospectus, the underwriters named below, for
whom Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc., Robert W.
Baird & Co. Incorporated and Salomon Smith Barney Inc. are acting as the
representatives, have severally agreed to purchase, and Tower Automotive has
agreed to sell to them, severally, the number of shares indicated below:

NAME NUMBER OF SHARES
------------------------------------------------------------ ----------------

Morgan Stanley & Co. Incorporated...........................
J.P. Morgan Securities Inc..................................
Robert W. Baird & Co. Incorporated..........................
Salomon Smith Barney Inc....................................
----------
TOTAL.................................................. 15,000,000
==========

The underwriters are offering the shares of common stock subject to their
acceptance of the shares from Tower Automotive and subject to prior sale. The
underwriting agreement provides that the obligations of the several underwriters
to pay for and accept delivery of the shares of common stock offered by this
prospectus are subject to the approval of certain legal matters by their counsel
and to certain other conditions. The underwriters are obligated to take and pay
for all of the shares of common stock offered by this prospectus if any such
shares are taken. However, the underwriters are not required to take or pay for
the shares covered by the underwriters' over-allotment option described below.

The underwriters initially propose to offer part of the shares of common
stock directly to the public at the public offering price listed on the cover
page of this prospectus and part to certain dealers at a price that represents a
concession not in excess of $ a share under the public offering price.
Any underwriter may allow, and such dealers may reallow, a concession not in
excess of $ a share to other underwriters or to certain dealers. After
the initial offering of the shares of common stock, the offering price and other
selling terms may from time to time be varied by the representatives.

Tower Automotive has granted to the underwriters an option, exercisable for
30 days from the date of this prospectus, to purchase up to an aggregate of
2,225,000 additional shares of common stock at the public offering price set
forth on the cover page of this prospectus, less underwriting discounts and
commissions. The underwriters may exercise this option solely for the purpose of
covering over-allotments, if any, made in connection with the offering of the
shares of common stock offered by this prospectus. To the extent the option is
exercised, each underwriter will become obligated, subject to certain
conditions, to purchase about the same percentage of the additional shares of
common stock as the number listed next to the underwriter's name in the
preceding table bears to the total number of shares of common stock listed next
to the names of all underwriters in the preceding table. If the underwriters'
option is exercised in full, the total price to the public would be $ ,
the total underwriters' discounts and commissions would be $ and total
proceeds to Tower Automotive would be $ .

The underwriting discounts and commissions were determined by negotiations
between Tower Automotive and the representatives and are a percentage of the
offering price to the public. The primary factors considered in determining the
discounts and commissions were the size of the offering, the nature of the
securities offered and the discounts and commissions charged in comparable
transactions. The estimated offering expenses payable by Tower Automotive, in
addition to the underwriting discounts and commissions, are approximately
$1,000,000, which includes legal, accounting and printing costs and various
other fees associated with registering and listing the common stock.

The underwriters have informed Tower Automotive that they do not intend
sales to discretionary accounts to exceed five percent of the total number of
shares of common stock offered by them.

Tower Automotive's common stock is listed on the New York Stock Exchange
under the symbol "TWR."

Each of Tower Automotive and its directors and executive officers has
agreed that, without the prior written consent of Morgan Stanley & Co.
Incorporated on behalf of the underwriters, it will not, during the period
ending 90 days after the date of this prospectus:

-- offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose
of directly or indirectly, any shares of common stock or any
securities convertible into or exercisable or exchangeable for common
stock; or

-- enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of
the common stock;

whether any such transaction described above is to be settled by delivery of
common stock or such other securities, in cash or otherwise. The restrictions
described in this paragraph do not apply to:

-- the sale of shares to the underwriters;

-- the issuance by Tower Automotive of shares of common stock upon the
exercise of an option or a warrant or the conversion of a security
outstanding on the date of this prospectus of which the underwriters
have been advised in writing;

-- transactions by any person other than Tower Automotive relating to
shares of common stock or other securities acquired in open market
transactions after the completion of the offering of the shares;

-- the issuance or granting by Tower Automotive of options, securities
or other awards under any of its employee benefit plans; provided
that such options, securities or other awards do not become
exercisable or vest during the 90-day lock-up period;

-- the exercise or conversion (including a cashless exercise or
conversion) by directors or executive officers of an option, warrant
or other security outstanding as of the date hereof, of which the
underwriters have been advised in writing; provided that any
securities received upon such exercise or conversion are deemed as
common stock acquired prior to the date hereof; or

-- transfers by directors or executive officers of shares of common
stock or any securities convertible into or exercisable or
exchangeable for common stock as a bona fide gift or by will or the
law of descent,

provided that each recipient of any such transfer pursuant to the last bullet
point above will be required to execute a duplicate lock-up agreement covering
the remainder of the 90-day period.

In order to facilitate the offering of the common stock, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the common stock. Specifically, the underwriters may sell more shares
than they are obligated to purchase under the underwriting agreement, creating a
short position. A short sale is covered if the short position is no greater than
the number of shares available for purchase by the underwriters under the over
allotment option. The underwriters can close out a covered short sale by
exercising the over allotment option or purchasing shares in the open market. In
determining the source of shares to close out a covered short sale, the
underwriters will consider, among other things, the open market price of shares
compared to the price available under the over allotment option. The
underwriters may also sell shares in excess of the over allotment option,
creating a naked short position. The underwriters must close out any naked short
position by purchasing shares in the open market. A naked short position is more
likely to be created if the underwriters are concerned that there may be
downward pressure on the price of the common stock in the open market after
pricing that could adversely affect investors who purchase in the offering. As
an additional means of facilitating the offering, the underwriters may bid for,
and purchase, shares of common stock in the open market to stabilize the price
of the common stock. The underwriting syndicate may also reclaim selling
concessions allowed to an underwriter or a dealer for distributing the common
stock in the offering, if the syndicate repurchases previously distributed
common stock to cover syndicate short positions or to stabilize the price of the
common stock. These activities may raise or maintain the market price of the
common stock above independent market levels or prevent or retard a decline in
the market price of the

common stock. The underwriters are not required to engage in these activities,
and may end any of these activities at any time.

From time to time, each of the representatives has provided, and continues
to provide, investment banking services to Tower Automotive.

As of February 13, 2002, Morgan Stanley Dean Witter & Co., the parent
company of Morgan Stanley & Co. Incorporated, was deemed to beneficially own
3,194,090 shares of our common stock as a result of accounts managed, including
by its wholly owned subsidiary Morgan Stanley Investments L.P., in its capacity
as investment advisor.

Affiliates of some of the underwriters are parties to Tower Automotive's
senior credit facility and will receive their proportionate shares of the debt
repayments made from the proceeds of this offering. See "Use of Proceeds."
Citibank, an affiliate of Salomon Smith Barney Inc., is a lender, and JP Morgan
Chase Bank, an affiliate of J.P. Morgan Securities Inc., is the administrative
agent and a lender, under the six-year $1.15 billion senior credit facility.
Because more than 10% of the proceeds of the offering will be paid to members or
affiliates of members of the National Association of Securities Dealers, Inc.
participating in this offering, this offering will be conducted in accordance
with Rule 2710(c)(8) of the Conduct Rules of the National Association of
Securities Dealers, Inc.

Tower Automotive and the underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed on
for Tower Automotive, Inc. by Kirkland & Ellis (a partnership that includes
professional corporations), Chicago, Illinois. Certain legal matters will be
passed upon for the underwriters by Davis Polk & Wardwell. Kirkland & Ellis has
from time to time represented, and may continue to represent, Morgan Stanley &
Co. Incorporated in connection with certain legal matters.

EXPERTS

The financial statements of Tower Automotive, Inc. included in this
prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
report.

WHERE YOU CAN FIND OTHER INFORMATION

We are subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports, proxy statements and other information with
the Securities and Exchange Commission. You can inspect and copy these reports,
proxy statements and other information at the Public Reference Room of the SEC,
450 Fifth Street, N.W., Washington, D.C. 20549 and, at prescribed rates, you can
obtain copies of these materials from the Public Reference Room. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of the Public
Reference Room. Our SEC filings will also be available to you on the SEC's Web
site. The address of this site is http://www.sec.gov.

We have filed with the SEC a registration statement (which term shall
include all amendments, exhibits and schedules thereto) on Form S-3 under the
Securities Act, with respect to the shares offered hereby. This prospectus does
not contain all the information set forth in the registration statement, certain
parts of which are omitted in accordance with the rules and regulations of the
SEC, and to which reference is hereby made. Statements made in this prospectus
as to the contents of any document referred to are not necessarily complete.
With respect to each such document filed as an exhibit to the registration
statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement shall be

deemed qualified in its entirety by such reference. The registration statement
may be inspected at the public reference facilities maintained by the SEC at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and
is available to you on the SEC's Web site.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The SEC allows us to incorporate by reference into this prospectus the
information we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and
information we file later with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed below and any
future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act until the sale of all of the shares of common stock that are
part of this offering. The documents we are incorporating by reference are as
follows:

-- our Annual Report on Form 10-K for the fiscal year ended December 31,
2001;

-- our Current Reports on Form 8-K/A and Form 8-K, as applicable, dated
January 3, 2002, February 1, 2002 and April 22, 2002; and

-- our Proxy Statement dated April 3, 2002 for the 2002 Annual Meeting
of Stockholders.

Any statement contained in a document incorporated by reference will be
modified or superseded for all purposes to the extent that a statement contained
in this prospectus (or in any other document that is subsequently filed with the
SEC and incorporated by reference) modifies or is contrary to that previous
statement. Any statement so modified or superceded will not be deemed a part of
this prospectus except as so modified or superseded.

You may request a copy of these filings at no cost (other than exhibits
unless such exhibits are specifically incorporated by reference) by writing or
telephoning us at the following address and telephone number:

Tower Automotive, Inc.
5211 Cascade Road SE
Suite 300
Grand Rapids, Michigan 49546
(616) 802-1600
Attention: Investor Relations

INDEX TO FINANCIAL STATEMENTS

Report of Independent Public Accountants.................... F-2
Consolidated Balance Sheets as of December 31, 2001 and
2000...................................................... F-3
Consolidated Statements of Operations for the years ended
December 31, 2001, 2000 and 1999.......................... F-4
Consolidated Statements of Stockholders' Investment for the
years ended December 31, 2001, 2000 and 1999.............. F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999.......................... F-6
Notes to Consolidated Financial Statements.................. F-7

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Tower Automotive, Inc.:

We have audited the accompanying consolidated balance sheets of Tower
Automotive, Inc. (a Delaware corporation) and Subsidiaries as of December 31,
2001 and 2000, and the related consolidated statements of operations,
stockholders' investment and cash flows for each of the three years in the
period ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the 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 financial statements referred to above present fairly,
in all material respects, the financial position of Tower Automotive, Inc. and
Subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United States.

As explained in Note 2 to the financial statements, effective January 1,
2001, the Company adopted the new requirements of Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities."

Arthur Andersen LLP

Minneapolis, Minnesota,
January 25, 2002

F-2

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31,
-----------------------
2001 2000
---------- ----------
(AMOUNTS IN THOUSANDS,
EXCEPT SHARE AMOUNTS)

ASSETS
Current Assets:
Cash and cash equivalents................................. $ 21,767 $ 3,373
Accounts receivable....................................... 216,638 278,707
Inventories............................................... 112,536 132,478
Prepaid tooling and other................................. 89,229 222,119
---------- ----------
Total current assets................................... 440,170 636,677
---------- ----------
Property, Plant and Equipment, net.......................... 1,120,259 1,111,780
Investments in Joint Ventures............................... 243,198 267,217
Deferred Income Taxes....................................... 61,461 11,641
Goodwill, net of accumulated amortization of $56,850 and
$51,391................................................... 567,080 794,362
Other Assets, net of accumulated amortization of $17,083 and
$13,360................................................... 101,268 71,070
---------- ----------
$2,533,436 $2,892,747
========== ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current maturities of long-term debt and capital lease
obligations............................................ $ 172,083 $ 149,066
Accounts payable.......................................... 368,910 248,389
Accrued liabilities....................................... 278,962 160,469
---------- ----------
Total current liabilities.............................. 819,955 557,924
---------- ----------
Long-Term Debt, net of current maturities................... 601,084 933,442
Obligations Under Capital Leases, net of current
maturities................................................ 4,620 8,458
Convertible Subordinated Notes.............................. 199,984 200,000
Deferred Income Taxes....................................... -- 33,884
Other Noncurrent Liabilities................................ 201,635 200,194
---------- ----------
Total noncurrent liabilities........................... 1,007,323 1,375,978
---------- ----------
Commitments and Contingencies (Notes 4, 6 and 12)
Mandatorily Redeemable Trust Convertible Preferred
Securities................................................ 258,750 258,750
Stockholders' Investment:
Preferred stock, par value $1; 5,000,000 shares
authorized; no shares issued or outstanding............ -- --
Common stock, par value $.01; 200,000,000 shares
authorized; 48,077,142 and 47,584,391 shares issued and
outstanding............................................ 481 476
Additional paid-in capital................................ 456,627 450,455
Retained earnings......................................... 40,432 307,956
Deferred Compensation Plans............................... (15,571) (8,942)
Accumulated other comprehensive loss...................... (34,561) (9,672)
Treasury stock, at cost: 4,112,100 shares in 2000......... -- (40,178)
---------- ----------
Total stockholders' investment......................... 447,408 700,095
---------- ----------
$2,533,436 $2,892,747
========== ==========

The accompanying notes are an integral part of these consolidated balance
sheets.
F-3

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31,
---------------------------------------------
2001 2000 1999
------------- ------------- -------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues................................................. $2,467,433 $2,531,953 $2,170,003
Cost of sales............................................ 2,190,248 2,160,359 1,823,103
---------- ---------- ----------
Gross profit........................................... 277,185 371,594 346,900
Selling, general and administrative expenses............. 139,203 137,003 105,950
Amortization expense..................................... 24,804 21,517 15,803
Restructuring and asset impairment charges............... 383,739 141,326 --
---------- ---------- ----------
Operating income (loss)................................ (270,561) 71,748 225,147
Interest expense......................................... 80,319 71,162 39,491
Interest income.......................................... (6,554) (6,451) (1,510)
---------- ---------- ----------
Income (loss) before provision for income taxes, equity
in earnings of joint ventures and minority
interest............................................ (344,326) 7,037 187,166
Provision (benefit) for income taxes..................... (73,312) 2,619 74,866
---------- ---------- ----------
Income (loss) before equity in earnings of joint
ventures, minority interest and extraordinary
item................................................ (271,014) 4,418 112,300
Equity in earnings of joint ventures, net................ 17,250 22,480 15,268
Minority interest, net................................... (13,760) (10,476) (10,480)
---------- ---------- ----------
Income (loss) before extraordinary item................ (267,524) 16,422 117,088
Extraordinary loss on early extinguishment of debt,
net.................................................... -- 2,988 --
---------- ---------- ----------
Net income (loss)................................... $ (267,524) $ 13,434 $ 117,088
========== ========== ==========
Basic earnings (loss) per share (Note 4):
Income (loss) before extraordinary loss................ $ (5.87) $ 0.35 $ 2.50
Extraordinary loss..................................... -- (0.06) --
---------- ---------- ----------
Net income (loss)................................... $ (5.87) $ 0.29 $ 2.50
========== ========== ==========
Diluted earnings (loss) per share (Note 4):
Income (loss) before extraordinary loss................ $ (5.87) $ 0.34 $ 2.10
Extraordinary loss..................................... -- (0.06) --
---------- ---------- ----------
Net income (loss)................................... $ (5.87) $ 0.28 $ 2.10
========== ========== ==========

The accompanying notes are an integral part of these consolidated financial
statements.
F-4

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT

COMMON STOCK ADDITIONAL WARRANTS TO DEFERRED
------------------- PAID-IN RETAINED ACQUIRE COMPENSATION
SHARES AMOUNT CAPITAL EARNINGS COMMON STOCK PLANS
---------- ------ ---------- --------- ------------ ------------
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

BALANCE, DECEMBER 31, 1998............. 46,281,880 $463 $426,471 $ 177,434 $ 2,000 $ --
Conversion of Edgewood notes........... 250,000 3 755 -- -- --
Exercise of options.................... 125,000 1 996 -- -- --
Sales of stock under Employee Stock
Discount Purchase Plan............... 222,574 2 3,579 -- -- --
Deferred Income Stock Plan............. -- -- 4,484 -- -- (4,484)
Non-employee options grant............. -- -- 897 -- -- --
Collection of common stock
subscriptions receivable............. -- -- 28 -- -- --
Net income............................. -- -- -- 117,088 -- --
Other comprehensive loss -- foreign
currency translation adjustment...... -- -- -- -- -- --
Total comprehensive income.............
---------- ---- -------- --------- ------- --------
BALANCE, DECEMBER 31, 1999............. 46,879,454 469 437,210 294,522 2,000 (4,484)
Conversion of warrants................. 400,000 4 5,596 -- (2,000) --
Exercise of options.................... 56,000 1 348 -- -- --
Sales of stock under Employee Stock
Discount Purchase Plan............... 224,342 2 2,843 -- -- --
Deferred Income Stock Plan............. 24,595 -- 4,458 -- -- (4,458)
Common share repurchase................ -- -- -- -- -- --
Net income............................. -- -- -- 13,434 -- --
Other comprehensive loss -- foreign
currency translation adjustment...... -- -- -- -- -- --
Total comprehensive income.............
---------- ---- -------- --------- ------- --------
BALANCE, DECEMBER 31, 2000............. 47,584,391 476 450,455 307,956 -- (8,942)
Conversion of Edgewood and 5%
convertible notes.................... 273,862 3 825 -- -- --
Exercise of options.................... 42,750 -- 268 -- -- --
Sales of stock under Employee Stock
Discount Purchase Plan............... 172,502 2 1,167 -- -- --
Deferred Income Stock Plan............. -- -- 1,279 -- -- (1,279)
Restricted stock issued in exchange for
stock options........................ -- -- 5,350 -- -- (5,350)
Private placement of common stock...... 3,637 -- (2,717) -- -- --
Net loss............................... -- -- -- (267,524) -- --
Other comprehensive loss -- foreign
currency translation adjustment...... -- -- -- -- -- --
Transition adjustment relating to loss
on qualifying cash flow hedges....... -- -- -- -- -- --
Unrealized loss on qualifying cash flow
hedges............................... -- -- -- -- -- --
Minimum pension liability.............. -- -- -- -- -- --
Total comprehensive loss...............
---------- ---- -------- --------- ------- --------
BALANCE, DECEMBER 31, 2001............. 48,077,142 $481 $456,627 $ 40,432 $ -- $(15,571)
========== ==== ======== ========= ======= ========

ACCUMULATED
TREASURY STOCK OTHER TOTAL
--------------------- COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT INCOME (LOSS) INVESTMENT
---------- -------- ------------- -------------
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

BALANCE, DECEMBER 31, 1998............. -- $ -- $ 428 $ 606,796
Conversion of Edgewood notes........... -- -- -- 758
Exercise of options.................... -- -- -- 997
Sales of stock under Employee Stock
Discount Purchase Plan............... -- -- -- 3,581
Deferred Income Stock Plan............. -- -- -- --
Non-employee options grant............. -- -- -- 897
Collection of common stock
subscriptions receivable............. -- -- -- 28
Net income............................. -- -- --
Other comprehensive loss -- foreign
currency translation adjustment...... -- -- (3,010)
Total comprehensive income............. 114,078
---------- -------- -------- ---------
BALANCE, DECEMBER 31, 1999............. -- -- (2,582) 727,135
Conversion of warrants................. -- -- -- 3,600
Exercise of options.................... -- -- -- 349
Sales of stock under Employee Stock
Discount Purchase Plan............... -- -- -- 2,845
Deferred Income Stock Plan............. -- -- -- --
Common share repurchase................ (4,112,100) (40,178) -- (40,178)
Net income............................. -- -- --
Other comprehensive loss -- foreign
currency translation adjustment...... -- -- (7,090)
Total comprehensive income............. 6,344
---------- -------- -------- ---------
BALANCE, DECEMBER 31, 2000............. (4,112,100) (40,178) (9,672) 700,095
Conversion of Edgewood and 5%
convertible notes.................... -- -- -- 828
Exercise of options.................... -- -- -- 268
Sales of stock under Employee Stock
Discount Purchase Plan............... -- -- -- 1,169
Deferred Income Stock Plan............. 479,337 -- -- --
Restricted stock issued in exchange for
stock options........................ -- -- -- --
Private placement of common stock...... 3,632,763 40,178 -- 37,461
Net loss............................... -- -- --
Other comprehensive loss -- foreign
currency translation adjustment...... -- -- (2,115)
Transition adjustment relating to loss
on qualifying cash flow hedges....... -- -- (4,200)
Unrealized loss on qualifying cash flow
hedges............................... -- -- (4,102)
Minimum pension liability.............. -- -- (14,472)
Total comprehensive loss............... (292,413)
---------- -------- -------- ---------
BALANCE, DECEMBER 31, 2001............. -- $ -- $(34,561) $ 447,408
========== ======== ======== =========

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

F-5

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,
---------------------------------------
2001 2000 1999
----------- ----------- -----------
(AMOUNTS IN THOUSANDS)

OPERATING ACTIVITIES:
Net income (loss)................................... $ (267,524) $ 13,434 $ 117,088
Adjustments required to reconcile net income (loss)
to net cash provided by operating activities-
Depreciation and amortization.................... 159,893 144,805 111,611
Deferred income tax provision (benefit).......... (80,758) (23,373) 45,528
Extraordinary loss on extinguishment of debt,
net............................................ -- 2,988 --
Equity in earnings of joint ventures, net........ (17,250) (22,480) (15,268)
Restructuring and asset impairment charge........ 383,739 141,326 --
Change in other operating items:
Accounts receivable............................ 74,515 111,706 (73,903)
Inventories.................................... 21,415 6,789 (9,340)
Prepaid tooling and other...................... 129,339 (115,780) 52,270
Accounts payable and accrued liabilities....... 148,802 (119,763) 40,491
Other assets and liabilities................... (38,356) (47,004) (56,474)
----------- ----------- -----------
Net cash provided by operating activities... 513,815 92,648 212,003
----------- ----------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net........................... (193,955) (93,588) (197,315)
Acquisitions, net of cash acquired.................. (2,689) (182,252) (320,662)
Acquisition of joint venture interests and other.... (2,729) (46,295) (68,594)
Net proceeds from sale of Roanoke Heavy Truck
Business......................................... -- 55,353 --
Change in restricted cash........................... -- -- 2,677
----------- ----------- -----------
Net cash used for investing activities...... (199,373) (266,782) (583,894)
----------- ----------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings............................ 2,308,821 3,372,311 2,208,667
Repayments of debt.................................. (2,643,860) (3,299,737) (1,841,229)
Net proceeds from issuance of senior Euro notes..... -- 134,700 --
Net proceeds from issuance of common stock.......... 1,530 6,794 4,636
Net proceeds from private placement of common
stock............................................ 37,461 -- --
Payments for repurchase of common shares............ -- (40,178) --
----------- ----------- -----------
Net cash provided by (used for) financing
activities................................ (296,048) 173,890 372,074
----------- ----------- -----------
Net Change in Cash and Cash Equivalents............... 18,394 (244) 183
Cash and Cash Equivalents, beginning of year.......... 3,373 3,617 3,434
----------- ----------- -----------
Cash and Cash Equivalents, end of year................ $ 21,767 $ 3,373 $ 3,617
=========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid, net of amounts capitalized........... $ 79,099 $ 63,776 $ 36,023
=========== =========== ===========
Income taxes (refunded) paid........................ $ (12,853) $ 18,808 $ 17,136
=========== =========== ===========
NON CASH FINANCING ACTIVITIES:
Notes payable converted to common stock............. $ 828 $ -- $ 758
=========== =========== ===========
Non-employee options grant.......................... $ -- $ -- $ 897
=========== =========== ===========
Deferred Income Stock Plan.......................... $ 1,279 $ 4,458 $ 4,484
=========== =========== ===========
Issuance of restricted stock for options............ $ 5,350 $ -- $ --
=========== =========== ===========

The accompanying notes are an integral part of these consolidated financial
statements.
F-6

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION:

Tower Automotive, Inc. and subsidiaries (the "Company") produces a broad
range of assemblies and modules for vehicle frames, upper body structures and
suspension systems for the global automotive industry. Including both
wholly-owned subsidiaries and investments in joint ventures, the Company has
facilities in the United States, Canada, Italy, Germany, Hungary, Poland,
Brazil, India, Slovakia, Korea, Japan, China, and Mexico.

2. SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION:

The accompanying consolidated financial statements include the accounts of
Tower Automotive, Inc., its wholly-owned subsidiaries, and its majority-owned
and majority-controlled investments. All material intercompany accounts and
transactions have been eliminated in consolidation.

As part of the acquisition of Automotive Products Company in 1997, the
Company acquired a 60 percent joint venture interest in Tower Golden Ring, which
produces certain parts in China. The remaining 40 percent of the joint venture
is owned by unrelated third parties. Prior to the third quarter of 2001, this
investment was accounted for using the equity method since all significant
business decisions required the approval of 80 percent of the joint venture
partners. During the third quarter of 2001, the Company determined that its
relationship with the other investors and the fact that representatives
appointed by the Company hold key management positions within the joint venture
allowed it to exercise significant control over significant business decisions.
As a result, this joint venture was consolidated effective as of the third
quarter of 2001. The Company's investments in Metalsa and Yorozu are accounted
for using the equity method. The Company's minority-controlled investments (less
than 20 percent ownership) are accounted for under the cost method.

CASH AND CASH EQUIVALENTS:

Cash and cash equivalents consist of highly liquid investments with an
original maturity of three months or less. Cash equivalents are stated at cost
which approximates fair value.

SUBORDINATED INTEREST IN ACCOUNTS RECEIVABLE:

In June 2001, the Company entered into a financing agreement whereby its
domestic operating units sell eligible customer receivables on an ongoing basis
to a newly formed, fully consolidated, financing entity. The financing entity
subsequently sells its interest in the receivables to a third party funding
agent in exchange for cash and a subordinated interest in the unfunded
receivables transferred. The Company acts as an administrative agent in the
management and collection of accounts receivable sold.

At December 31, 2001, the Company sold approximately $111.2 million of net
accounts receivable in exchange for $15.2 million of cash and a retained
subordinated interest in the receivables sold of approximately $96.0 million.
The receivables sold represented amounts owed to the Company from customers as
of November 30, 2001. The majority of such receivables were collected in
December 2001 and as a result, the Company's retained interest in accounts
receivable is not significant as of December 31, 2001 and is not presented
separately from accounts receivable. The net proceeds from the sale of the
receivables were used to pay down borrowings under the Company's revolving
credit facility. As of December 31, 2001, the Company recorded a liability to
the funding agent of $15.2 million, which represents receivables for which the
Company has received collections from customers and are required to be submitted
to the funding agent. Settlement of amounts due to the funding agent, as well as
the cost of funding at a rate of approximately 7.6 percent, occurs during the
month subsequent to the sale of the receivables.

F-7

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INVENTORIES:

Inventories are valued at the lower of first-in, first-out ("FIFO") cost or
market.

Inventories consisted of the following (in thousands):

DECEMBER 31,
-------------------
2001 2000
-------- --------

Raw materials............................................... $ 52,579 $ 54,958
Work-in-process............................................. 24,636 40,281
Finished goods.............................................. 35,321 37,239
-------- --------
$112,536 $132,478
======== ========

TOOLING AND OTHER DESIGN COSTS:

Tooling and other design costs represent costs incurred by the Company in
the development of new tooling used in the manufacture of the Company's
products. The Company follows the provisions of Emerging Issues Task Force
("EITF") Issue No. 99-5, "Accounting for Pre-Production Costs Related to
Long-Term Supply Arrangements," that requires all pre-production tooling costs
incurred for tools that the Company will not own and that will be used in
producing products to be supplied under long-term supply agreements be expensed
as incurred unless the supply agreement provides the supplier with the
noncancellable right to use the tools or the reimbursement of such costs is
contractually guaranteed by the customer. At the time that the customer awards a
contract to the Company, the customer agrees to reimburse the Company for
certain of its tooling costs either in the form of a lump sum payment or by
reimbursement on a piece price basis. When the part for which tooling has been
developed reaches a production-ready status, the Company is reimbursed by its
customers for the cost of the tooling (in instances of lump sum payment), at
which time the tooling becomes the property of the customers. For those costs
related to other tooling and design costs reimbursed through the piece price as
contractually guaranteed, such costs are capitalized as property, plant and
equipment and amortized using the unit of production method over the life of the
related product. The Company has certain other tooling costs related to tools
for which the Company has the contractual right to use the tool over the life of
the supply arrangement, which are capitalized as property, plant and equipment
and amortized over the life of the related product. The components of
capitalized tooling costs are as follows (in thousands):

DECEMBER 31,
------------------
2001 2000
------- --------

Reimbursable pre-production design and development costs.... $ 5,628 $ 2,442
Customer-owned tooling...................................... 51,019 85,416
Supplier-owned tooling...................................... 28,533 18,197
------- --------
Total.................................................. $85,180 $106,055
======= ========

All tooling amounts owned by the customer for which the Company expects
reimbursement are recorded in other current and other long-term assets on the
accompanying consolidated balance sheet. If the Company forecasts that the
amount of capitalized tooling and design costs exceeds the amount to be realized
through the sale of product, a loss is recognized currently.

F-8

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consisted of the following (in thousands):

DECEMBER 31,
-----------------------
2001 2000
---------- ----------

Land........................................................ $ 8,058 $ 7,126
Buildings and improvements.................................. 348,200 310,129
Machinery and equipment..................................... 1,095,955 1,028,365
Construction in progress.................................... 145,108 165,260
---------- ----------
1,597,321 1,510,880
Less-Accumulated depreciation............................... (477,062) (399,100)
---------- ----------
Net property, plant and equipment...................... $1,120,259 $1,111,780
========== ==========

Property, plant and equipment acquired in the acquisitions discussed in
Note 6 was recorded at its fair value, determined based on appraisals, as of the
respective acquisition dates. Additions to property, plant and equipment
following the acquisitions are stated at cost. For financial reporting purposes,
depreciation and amortization are provided using the straight-line method over
the following estimated useful lives:

Buildings and improvements.................................. 15 to 40 years
Machinery and equipment..................................... 3 to 20 years

Accelerated depreciation methods are used for tax reporting purposes.

Interest is capitalized during the construction of major facilities and is
amortized over their estimated useful lives. Interest of $14.6 million was
capitalized during the year ended December 31, 2001, $12.9 million was
capitalized during the year ended December 31, 2000 and $6.9 million was
capitalized during the year ended December 31, 1999.

Maintenance and repairs are charged to expense as incurred. Major
betterments and improvements which extend the useful life of the related item
are capitalized and depreciated. The cost and accumulated depreciation of
property, plant and equipment retired or otherwise disposed of are removed from
the related accounts, and any residual values after considering proceeds are
charged or credited to income.

GOODWILL:

Goodwill represents the excess of the purchase price over the fair value of
the net assets acquired, and through December 31, 2001, was being amortized on a
straight-line basis over 40 years.

The Company periodically evaluates whether events and circumstances have
occurred which may affect the estimated useful life or the recoverability of the
remaining balance of its goodwill and other long-lived assets. If such events or
circumstances were to indicate that the carrying amount of these assets were not
recoverable, the Company would estimate the future cash flows expected to result
from the use of the assets and their eventual disposition. If the sum of the
expected future cash flows (undiscounted and without interest charges) were less
than the carrying amount of goodwill, the Company would recognize an impairment
loss. Impairment losses are measured by comparing fair value of the goodwill as
determined by discounting the future cash flows at a market rate of interest.

During the fourth quarter of 2001, the Company recorded a goodwill
impairment charge of $87.5 million as a result of the restructuring of certain
operations (See Note 3). In addition, based upon the Company's current operating
plans (including the organizational realignment initiative discussed in Note 3)
and current and forecasted trends in the automotive industry, the Company
re-evaluated the carrying amount of goodwill

F-9

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and other long-lived assets. Based upon this analysis, the Company determined
that an additional $108.6 million of goodwill and $97.0 million of manufacturing
equipment and other assets were impaired. As a result, these assets were written
down to their estimated fair value as discussed above (See Note 3).

OTHER ASSETS:

Other assets consist primarily of deferred rent expense and debt issuance
costs. Debt issue costs are amortized on a straight-line basis over the term of
the related obligations.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

The carrying amount of cash and cash equivalents, accounts receivable,
accounts payable and revolving credit facilities approximates fair value because
of the short maturity of these instruments. The carrying amount of the Company's
long-term debt approximates fair value because of the variability of the
interest cost associated with these instruments. The fair value of the Company's
Convertible Subordinated Notes and Preferred Securities approximated $167.5
million and $111.3 million, respectively, as of December 31, 2001.

DERIVATIVE FINANCIAL INSTRUMENTS:

The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 133 "Accounting for Derivative Instruments and Hedging Activities,"
effective January 1, 2001. SFAS No. 133 establishes accounting and reporting
standards requiring that every derivative instrument, including certain
derivative instruments embedded in other contracts be recorded in the balance
sheet as either an asset or liability measured at its fair value. SFAS No. 133
requires that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge criteria are met, and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. The effect of this change as of January 1, 2001,
was a pretax charge to accumulated other comprehensive loss of $6.8 million
($4.2 million net of income tax benefit).

The Company uses derivative financial instruments principally to manage the
risk that changes in interest rates will affect the amount of its future
interest payments. Interest rate swap contracts are used to adjust the
proportion of total debt that is subject to variable and fixed interest rates.
Under these agreements, the Company agrees to pay an amount equal to a specified
fixed rate times a notional principal amount, and to receive in return an amount
equal to a specified variable rate times the same notional principal amount. The
notional amounts of the contract are not exchanged. No other cash payments are
made unless the contract is terminated prior to maturity, in which case the
amount paid or received in settlement is established by agreement at the time of
termination, and usually will represent the net present value, at current rates
of interest, of the remaining obligation to exchange payments under the term of
the contract.

The interest rate swap contracts are recorded at fair value in the
consolidated balance sheet as accrued liabilities and the related gains or
losses on these contracts are deferred in stockholders' investment (as a
component of other comprehensive income (loss)). Amounts to be paid or received
under the contracts are accrued as interest rates change and are recognized over
the life of the contracts as an adjustment to interest expense. The net effect
of this accounting is that interest expense on the portion of variable rate debt
being hedged is generally recorded based on fixed interest rates.

During September 2000, the Company entered into an interest rate swap
contract to hedge against interest rate exposure on approximately $160 million
of its floating rate indebtedness under its $1.15 billion senior unsecured
credit facility. The contract has the effect of converting the floating rate
interest to a fixed rate of approximately 6.9 percent, plus any applicable
margin required under the revolving credit facility. The interest rate swap
contract was executed to balance the Company's fixed-rate and floating-rate debt
portfolios and expires in September 2005. As of December 31, 2001, this is the
only swap contract the Company has

F-10

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

outstanding. The fair value of the interest rate swap agreement at December 31,
2001 and 2000 was a liability of $13.4 million and $6.9 million, respectively,
representing the cost that would be incurred to terminate the agreement. This
swap contract has been designated as a highly effective cash flow hedge and
accordingly, gains or losses on any ineffectiveness was not material to any
period.

OTHER NONCURRENT LIABILITIES:

Other noncurrent liabilities consisted of the following (in thousands):

DECEMBER 31,
-------------------
2001 2000
-------- --------

Post-retirement benefits.................................... $ 86,382 $ 93,668
Purchase accounting reserves................................ 43,119 68,369
Other....................................................... 72,134 38,157
-------- --------
$201,635 $200,194
======== ========

REVENUE RECOGNITION AND SALES COMMITMENTS:

The Company recognizes revenue as its products are shipped to its
customers. The Company enters into agreements to produce products for its
customers at the beginning of a given vehicle's life. Once such agreements are
entered into by the Company, fulfillment of the customers' purchasing
requirements is the obligation of the Company for the entire production life of
the vehicle, with terms of three to ten years and the Company has no provisions
to terminate such contracts. In certain instances, the Company may be committed
under existing agreements to supply product to its customers at selling prices
which are not sufficient to cover the direct cost to produce such product. In
such situations, the Company records a liability for the estimated future amount
of such losses. Such losses are recognized at the time that the loss is probable
and reasonably estimable and is recorded at the minimum amount necessary to
fulfill the Company's obligations to its customers. Losses are discounted and
are estimated based upon information available at the time of the estimate,
including future production volume estimates, length of the program and selling
price and production cost information.

INCOME TAXES:

The Company recognizes deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Deferred tax assets and liabilities are determined
based on the difference between the financial statement and tax bases of assets
and liabilities using currently enacted tax rates.

COMPREHENSIVE INCOME (LOSS):

Comprehensive income (loss) reflects the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. For the Company, comprehensive income (loss) represents
net income (loss) adjusted for foreign currency translation adjustments, minimum
pension liability adjustments, and gains or losses on qualifying cash flow
hedges in accordance with SFAS No. 133.

SEGMENT REPORTING:

In accordance with SFAS No. 131, the Company uses the "management approach"
to reporting segment disclosures. The management approach designates the
internal organization that is used by management for

F-11

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

making operating decisions and assessing performance as the source of the
Company's reportable segments. SFAS No. 131 also requires disclosures about
products and services, geographic areas, and major customers.

STOCK OPTIONS:

The Company accounts for stock options under the provisions of Accounting
Principles Board opinion ("APB") No. 25, under which no compensation expense is
recognized when the stock options are granted to employees and directors at fair
market value. The pro forma effects had the Company followed the provisions of
SFAS No. 123 are included in Note 4. The Company may also grant stock options to
outside consultants. The fair value of these option grants are expensed over the
period services are rendered based on the Black-Scholes valuation model.

USE OF ESTIMATES:

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. The actual results could differ from those
estimates.

FOREIGN CURRENCY TRANSLATION:

Assets and liabilities of the Company's foreign operations are translated
into U.S. dollars using the year-end rates of exchange. Results of operations
are translated at average rates prevailing throughout the period. Translation
gains or losses are accumulated as a separate component of "other comprehensive
loss" in the accompanying consolidated statements of stockholders' investment.

RECLASSIFICATIONS:

Certain prior year amounts were reclassified to conform to the current year
presentation.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

On June 29, 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS 141, "Business Combinations," and SFAS 142, "Goodwill and Intangible
Assets." Major provisions of these Statements are as follows: all business
combinations initiated after June 30, 2001 must use the purchase method of
accounting; the pooling of interest method of accounting is prohibited except
for transactions initiated before July 1, 2001; intangible assets acquired in a
business combination must be recorded separately from goodwill if they arise
from contractual or other legal rights or are separable from the acquired entity
and can be sold, transferred, licensed, rented or exchanged, either individually
or as part of a related contract, asset or liability; goodwill and intangible
assets with indefinite lives are not amortized but tested for impairment
annually, except in certain circumstances, and whenever there is an impairment
indicator; all acquired goodwill must be assigned to reporting units for
purposes of impairment testing; effective January 1, 2002, goodwill is no longer
subject to amortization.

The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of fiscal year 2002. As of
December 31, 2001, the Company has unamortized goodwill of $567.1 million that
will be subject to the transition provisions of the Statements. The Company has
not yet determined the impact of adopting these Statements on its earnings and
financial position, including whether it will be required to recognize any
transitional impairment losses as a cumulative effect of a change in accounting
principle. Application of the nonamortization provisions of the Statements is
expected to result in a

F-12

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reduction in goodwill amortization expense of approximately $16 million in
fiscal 2002, after reflecting 2001 goodwill writedowns of $196.1 million.

In July 2001, the FASB issued SFAS No. 144, "Impairment or Disposal of
Long-Lived Assets," which is effective for fiscal years beginning after December
15, 2001. The provisions of this Statement provide a single accounting model for
impairment of long-lived assets. The adoption of SFAS No. 144 on January 1, 2002
is not expected to have a material impact on the Company's financial position or
its results of operations.

3. RESTRUCTURING AND ASSET IMPAIRMENT CHARGES:

SEBEWAING AND MILWAUKEE PRESS OPERATIONS:

In October 2001, the Company's board of directors approved a restructuring
of the enterprise that included the closing of the Sebewaing, Michigan facility.
In addition, in December 2001, the Company's board of directors approved a
restructuring plan that related to the consolidation of technical activities and
a reduction of other salaried colleagues in conjunction with a reorganization of
the Company's U.S. and Canada operations and the relocation of some component
manufacturing from the Company's Milwaukee Press Operations to other Tower
locations. As a result of these realignment efforts (the "2001 Plan"), the
Company recorded a restructuring charge in the fourth quarter of 2001 of $178.1
million, which reflects the estimated qualifying "exit costs" to be incurred
over the next 12 months pertaining to the 2001 Plan.

The 2001 Plan charge includes costs associated with asset impairments,
severance and outplacement costs related to employee terminations and certain
other exit costs. These activities are anticipated to result in a reduction of
more than 700 colleagues in the Company's technical and administrative centers
in Novi, Rochester Hills, and Grand Rapids, Michigan; Milwaukee, Wisconsin; and
its U.S. and Canada manufacturing locations. Through December 31, 2001, the
Company had eliminated approximately 270 colleagues pursuant to the 2001 Plan.
The estimated restructuring charge does not cover certain aspects of the 2001
Plan, including movement of equipment and employee relocation and training.
These costs will be recognized in future periods as incurred.

The asset impairments consist of long-lived assets, including fixed assets,
buildings and manufacturing equipment from the facilities the Company intends to
dispose of or discontinue, and goodwill. The carrying value of the long-lived
assets written off was approximately $127.4 million as of December 31, 2001.
Fixed assets that will be disposed of as part of the 2001 Plan were written down
to their estimated residual values. For assets that will be sold currently, the
Company measured impairment based on estimated proceeds on the sale of the
facilities and equipment. These asset impairments have arisen as a consequence
of the Company making the decision to exit these activities during the fourth
quarter of 2001.

Based on the current plan, the Company anticipates this charge will require
cash payments of approximately $34.9 million combined with the $127.4 million
write-off of assets and other future obligations of $15.8 million. The asset
write-offs include $87.5 million of goodwill associated with Sebewaing and
Milwaukee Press Operations, $20.6 million of property, plant and equipment
associated with the Sebewaing operations and $12.1 million of property, plant
and equipment associated with the Milwaukee Press Operations business that will
be discontinued. Additionally, there was $7.2 million of property and building
write downs associated with the decision to consolidate the Company's technical
centers.

F-13

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The accrual for operational realignment and other costs is included in
accrued liabilities in the accompanying consolidated balance sheet as of
December 31, 2001. The table below summarizes the accrued operational
realignment and other charges through December 31, 2001 (in millions):

SEVERANCE AND
ASSET OUTPLACEMENT OTHER EXIT
IMPAIRMENTS COSTS COSTS TOTAL
----------- ------------- ---------- -------

Provision and reclassifications.......... $ 127.4 $24.6 $26.1 $ 178.1
Reclassification from 2000 Plan.......... -- -- 5.9 5.9
Cash payments............................ -- (0.7) (0.6) (1.3)
Non cash charges......................... (127.4) -- -- (127.4)
------- ----- ----- -------
Balance at December 31, 2001............. $ -- $23.9 $31.4 $ 55.3
======= ===== ===== =======

SUBSEQUENT EVENT (UNAUDITED):

On January 31, 2002, the Company announced that it will discontinue the
remaining stamping and ancillary processes currently performed at the Company's
Milwaukee Press Operations and relocate the remaining work to other Tower
locations or Tier II suppliers. The Company expects to complete the transfer
process during the second quarter of 2002. As a result of these efforts, the
Company expects to record a restructuring charge in the first quarter of 2002
totaling approximately $75 million.

HEAVY TRUCK AND KALAMAZOO STAMPING OPERATIONS:

In October 2000, the Company's board of directors approved a comprehensive
operational realignment plan (the "2000 Plan") to improve the Company's
long-term competitive position and lower its cost structure. The 2000 Plan
included phasing out the heavy truck rail manufacturing in Milwaukee, Wisconsin;
reducing stamping capacity by closing the Kalamazoo, Michigan facility; and
consolidating related support activities across the enterprise. The Company
recognized a charge to operations of approximately $141.3 million in the fourth
quarter of 2000, which reflected the estimated qualifying "exit costs" to be
incurred over the ensuing twelve months.

The 2000 Plan charge included costs associated with asset impairments,
severance and outplacement costs related to employee terminations, loss contract
provisions and certain other exit costs. These activities resulted in a
reduction of approximately 850 employees.

The asset impairments consisted of long-lived assets, including fixed
assets, manufacturing equipment and land, from the facilities the Company
intends to dispose of or discontinue. For assets that were disposed of
currently, the Company measured impairment based on estimated proceeds on the
sale of the facilities and equipment. The carrying value of the long-lived
assets held for sale or disposal was approximately $3.8 million as of December
31, 2001. For assets that will be held and used in the future, the Company
prepared a forecast of expected undiscounted cash flows to determine whether
asset impairment existed, and used fair values to measure the required
write-downs. These asset impairments have arisen as a consequence of the Company
making the decision to exit these activities during the fourth quarter of 2000.

The Company anticipated this charge would require cash payments of
approximately $37.6 million combined with the write-off of assets having a book
value of approximately $103.7 million. Actual amounts have been revised by $5.9
million compared to the original estimate. The assets written off included
Milwaukee heavy truck rail manufacturing machinery and equipment of
approximately $47.3 million, Milwaukee and corporate campus support operating
assets of approximately $46.1 million, Kalamazoo stamping operation's land,
buildings and equipment of approximately $5.7 million and Granite City stamping,
machinery and equipment of $4.6 million.

F-14

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The accrual for the 2000 Plan has been fully utilized and revised as of
December 31, 2001. The table below summarizes the accrued operational
realignment and other charges through December 31, 2001 (in millions):

SEVERANCE AND
ASSET OUTPLACEMENT LOSS OTHER EXIT
IMPAIRMENTS COSTS CONTRACTS COSTS TOTAL
----------- ------------- --------- ---------- -------

Provision...................... $ 103.7 $ 25.2 $ 8.1 $ 4.3 $ 141.3
Cash payments.................. -- (8.7) (2.5) (0.3) (11.5)
Non cash charges............... (103.7) -- -- -- (103.7)
------- ------- ----- ----- -------
Balance at December 31, 2000... -- 16.5 5.6 4.0 26.1
Cash payments.................. -- (13.6) (4.2) (2.4) (20.2)
Revision of estimate........... -- (2.9) (1.4) (1.6) (5.9)
------- ------- ----- ----- -------
Balance at December 31, 2001... $ -- $ -- $ -- $ -- $ --
======= ======= ===== ===== =======

NON-RESTRUCTURING ASSET IMPAIRMENTS:

The restructuring and asset impairment charges line on the accompanying
consolidated statement of operations is comprised of both restructuring and
non-restructuring related asset impairments. The components of that line are as
follows for each of the three years ending December 31, 2001 (in millions):

2001 2000 1999
------ ------ -----

Restructuring and related asset impairments................. $178.1 $141.3 $ --
Other goodwill and asset impairments........................ 205.6 -- --
------ ------ -----
Total....................................................... $383.7 $141.3 $ --
====== ====== =====

The other goodwill and asset impairment charges recorded in 2001 are a
result of the Company's review of the carrying amount of certain of its
goodwill, fixed assets, and certain investments based upon the Company's current
operating plans (including the organizational realignment initiative discussed
above) and current and forecasted trends in the automotive industry. Based upon
a review of anticipated cash flows, the Company determined that goodwill
assigned to two of its plants was impaired and was written off. In addition, the
Company identified assets which no longer had sufficient cash flows to support
their carrying amounts and were written down to fair value, including its
investment in J.L. French.

The total of the other goodwill and asset impairment charges included above
is as follows (in millions):

Goodwill writedown.......................................... $108.6
Other asset impairments..................................... 50.7
Investment in J.L. French impairment........................ 46.3
------
Total.................................................. $205.6
======

4. STOCKHOLDERS' INVESTMENT:

SALE OF COMMON STOCK:

On August 30, 2001, the Company issued 3,636,400 shares of common stock
(par value $0.01 per share) at a price of $11.00 per share in a private
placement transaction. The Company used the net proceeds of approximately $37.5
million to repay outstanding indebtedness under its revolving credit facility.

F-15

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STOCK REPURCHASE:

On May 26, 2000, the Company announced that its board of directors approved
the purchase of up to $100 million of its common stock, if authorized by the
executive committee of the board. The shares may be purchased in the open market
at prevailing prices and at times and amounts to be determined by the board's
executive committee as market conditions and the Company's capital position
warrant. During the year ended December 31, 2000, approximately 4.1 million
shares at a total cost of approximately $40.2 million were purchased. The
repurchased shares were placed in treasury and were reissued during 2001 for
general corporate purposes. There were no shares repurchased during 2001.

EARNINGS PER SHARE:

Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding during the year. Diluted earnings
per share for the 1999 period was calculated on the following assumptions: (i)
the Edgewood notes were converted at the beginning of the respective periods,
(ii) the Convertible Subordinated Notes were converted at the beginning of the
respective periods, and (iii) the Preferred Securities (as defined in Note 5)
were converted at the beginning of the period. The Convertible Subordinated
Notes and Preferred Securities were not included in the computation of earnings
per share for the year ended December 31, 2001 and 2000, due to their
anti-dilutive effect. In addition, common stock equivalents relating to options
and Edgewood notes totaling approximately 230,000 shares, using the treasury
stock method, were excluded from the calculation of earnings per share in 2001
because their impact was anti-dilutive.

YEARS ENDED DECEMBER 31,
---------------------------------------
2001 2000 1999
------------ ---------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Net income (loss).................................... $(267,524) $13,434 $117,088
Interest expense on Edgewood notes, net of tax....... -- 30 33
Interest expense on Convertible Subordinated Notes,
net of tax......................................... -- -- 6,508
Dividends on Preferred Securities, net of tax........ -- -- 10,480
--------- ------- --------
Net income (loss) applicable to common stockholders--
diluted............................................ $(267,524) $13,464 $134,109
========= ======= ========
Weighted average number of common shares
outstanding........................................ 45,597 47,100 46,934
Dilutive effect of outstanding stock options and
warrants after application of the treasury stock
method............................................. -- 171 560
Dilutive effect of Edgewood notes, assuming
conversion......................................... -- 289 326
Dilutive effect of Convertible Subordinated Notes,
assuming conversion................................ -- -- 7,729
Dilutive effect of Preferred Securities, assuming
conversion......................................... -- -- 8,425
--------- ------- --------
Diluted shares outstanding........................... 45,597 47,560 63,974
========= ======= ========
Basic earnings (loss) per share...................... $ (5.87) $ 0.29 $ 2.50
========= ======= ========
Diluted earnings (loss) per share.................... $ (5.87) $ 0.28 $ 2.10
========= ======= ========

F-16

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STOCK OPTION PLAN:

The Company sponsors the 1994 Key Employee Stock Option Plan (the "Stock
Option Plan"), under which any person who is a full-time, salaried employee of
the Company (excluding non-management directors) is eligible to participate in
the Stock Option Plan (an "Employee Participant"). A committee of the board of
directors selects the Employee Participants and determines the terms and
conditions of the options. The Stock Option Plan provides for the issuance of
options up to 3,000,000 shares of Common Stock at exercise prices equal to the
stock market price on the date of grant, subject to certain adjustments
reflecting changes in the Company's capitalization. Information regarding the
Stock Option Plan is as follows:

WEIGHTED
WEIGHTED AVERAGE FAIR
SHARES AVERAGE VALUE OF EXERCISABLE
UNDER EXERCISE OPTIONS AT END OF
OPTION EXERCISE PRICE PRICE GRANTED YEAR
---------- -------------- -------- ------------ -----------

Outstanding, December 31, 1998.... 1,853,350 $ 4.00 - 25.75 $17.89 $10.43 252,100
Granted......................... 795,500 19.25 19.25
Exercised....................... (125,000) 4.00 - 18.94 8.54
Forfeited....................... (81,000) 7.56 - 22.97 20.05
---------- -------------- ------
Outstanding, December 31, 1999.... 2,442,850 4.00 - 25.75 13.07 9.51 552,475
Exercised....................... (56,000) 4.00 - 7.56 6.48
Forfeited....................... (366,500) 4.00 - 25.75 19.20
---------- -------------- ------
Outstanding, December 31, 2000.... 2,020,350 4.00 - 22.97 19.00 9.72 978,725
Exercised....................... (42,750) 4.00 - 7.56 6.60
Converted to restricted stock... (1,251,500) 17.13 - 22.97 19.98
Forfeited....................... (223,500) 4.00 - 22.97 19.70
---------- -------------- ------
Outstanding, December 31, 2001.... 502,600 $ 4.00 - 22.97 $17.29 $ 8.85 378,600
========== ============== ======

The weighted average exercise price of options exercisable at end of year
was $16.59 at December 31, 2001, $18.13 at December 31, 2000 and $16.48 at
December 31, 1999.

All options granted in the stock option plan have a contractual life of 10
years from the date of grant and vest ratably over a four-year period from the
date of grant.

F-17

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In March 1999, the Company's board of directors adopted and shareholders
approved the Tower Automotive Inc. Long Term Incentive Plan ("Incentive Plan").
The Incentive Plan is designed to promote the long term success of the Company
through stock based compensation by aligning the interests of participants with
those of its stockholders. Eligible participants under the Incentive Plan
include key company colleagues, directors, and outside consultants. Awards under
the Incentive Plan may include stock options, stock appreciation rights,
performance shares, and other stock based awards. The Incentive Plan provides
for the issuance of up to 3,000,000 shares of common stock. A committee of the
board of directors is responsible for administration, participant selection, and
determination of terms and conditions of the Incentive Plan. Information
regarding the Incentive Plan is as follows:

WEIGHTED
AVERAGE
WEIGHTED FAIR
SHARES AVERAGE VALUE OF EXERCISABLE
UNDER EXERCISE OPTIONS AT END OF
OPTION EXERCISE PRICE PRICE GRANTED YEAR
--------- -------------- -------- -------- -----------

Granted.............................. 405,000 $ 19.25 $19.25
Granted.............................. 121,490 26.81 26.81
--------- -------------- ------
Outstanding, December 31, 1999....... 526,490 19.25 - 26.81 20.99 $9.08 --
Granted.............................. 1,315,480 13.19 13.19
Granted.............................. 120,000 15.56 15.56
Granted.............................. 60,000 12.06 12.06
Granted.............................. 5,000 11.94 11.94
Granted.............................. 5,000 9.63 9.63
Granted.............................. 5,000 10.75 10.75
Granted.............................. 10,000 10.19 10.19
Granted.............................. 120,000 9.13 9.13
Forfeited............................ (179,000) 13.19 - 19.25 18.44
--------- -------------- ------
Outstanding, December 31, 2000....... 1,987,970 9.13 - 26.81 14.61 7.94 70,000
Granted.............................. 918,450 11.33 11.33
Converted to restricted stock........ (252,000) 19.25 19.25
Forfeited............................ (273,450) 9.13 - 13.19 10.62
--------- -------------- ------
Outstanding, December 31, 2001....... 2,380,970 $ 9.63 - 26.81 $13.36 $7.48 373,783
========= ============== ======

Options granted in each of the past three years have a remaining
contractual life of five to 10 years and vest ratably over a four-year period
from the date of grant. The weighted average exercise price of options
exercisable under the Incentive Plan was $13.65 at December 31, 2001 and $19.25
at December 31, 2000. No options issued under the Incentive Plan were
exercisable as of December 31, 1999.

INDEPENDENT DIRECTOR STOCK OPTION PLAN:

In February 1996, the Company's board of directors approved the Tower
Automotive, Inc. Independent Director Stock Option Plan (the "Director Option
Plan") that provides for the issuance of options to Independent Directors, as
defined, to acquire up to 200,000 shares of the Company's Common Stock, subject
to certain adjustments reflecting changes in the Company's capitalization. The
option exercise price must be at least equal to the fair value of the Common
Stock at the time the option is issued. Vesting is determined by

F-18

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the board of directors at the date of grant and in no event can be less than six
months from the date of grant. Information regarding the Director Option Plan is
as follows:

WEIGHTED
AVERAGE
WEIGHTED FAIR
SHARES AVERAGE VALUE OF EXERCISABLE
UNDER EXERCISE OPTIONS AT END OF
OPTION EXERCISE PRICE PRICE GRANTED YEAR
------- -------------- -------- -------- -----------

Outstanding, December 31,
1998.......................... 123,000 $7.56 - 22.97 $15.37 $8.38 49,800
Granted....................... 40,000 19.25 19.25
------- ------------- ------
Outstanding, December 31,
1999.......................... 163,000 7.56 - 22.97 16.32 8.70 90,600
Forfeited..................... (41,000) 7.56 - 22.97 15.37
------- ------------- ------
Outstanding, December 31,
2000.......................... 122,000 7.56 - 22.97 16.64 8.80 91,200
Forfeited..................... (6,800) 19.25 19.25
------- ------------- ------
Outstanding, December 31,
2001.......................... 115,200 $7.56 - 22.97 $16.49 $8.75 108,400
======= ============= ======

The weighted average exercise price of options exercisable under the
Director Option Plan was $16.31 at December 31, 2001, $15.59 at December 31,
2000 and $13.56 at December 31, 1999.

EMPLOYEE STOCK PURCHASE PLAN:

The Company also sponsors an employee stock discount purchase plan which
provides for the sale of up to 1,400,000 shares of the Company's Common Stock at
discounted purchase prices, subject to certain limitations. The cost per share
under this plan is 85 percent of the market value of the Company's Common Stock
at the date of purchase, as defined. During the year ended December 31, 2001,
172,502 shares of Common Stock were issued to employees pursuant to this plan,
224,342 shares of Common Stock were issued during the year ended December 31,
2000, and 222,574 shares of Common Stock were issued during the year ended
December 31, 1999. The weighted average fair value of shares sold in 2001, 2000,
and 1999 was $6.64, $11.23, and $16.09, respectively.

DEFERRED STOCK PLANS:

The Company sponsors the Tower Automotive, Inc. Key Leadership Deferred
Income Stock Purchase Plan and the Tower Automotive, Inc. Director Deferred
Stock Purchase Plan (the "Deferred Stock Plans"), which allow certain employees
to defer receipt of all or a portion of their annual cash bonus and outside
directors to defer all or a portion of their annual retainer. The Company makes
a matching contribution of one-third of the deferral. The Company matching
contribution vests on the 15th day of December of the second plan year following
the date of the deferral. In accordance with the terms of the plans, the
deferral and Company's matching contribution may be placed in a "Rabbi" trust,
which invests solely in the Company's Common Stock. This trust arrangement
offers a degree of assurance for ultimate payment of benefits without causing
constructive receipt for income tax purposes. Distributions from the trust can
only be made in the form of the Company's Common Stock. The assets in the trust
remain subject to the claims of creditors of the Company and are not the
property of the employee or outside director; therefore, they are included as a
separate component of stockholders' investment under the caption Deferred
Compensation Plans. The Company recorded $1.3 million, $4.5 million and $4.4
million of expense related to these plans during the years ended December 31,
2001, 2000 and 1999, respectively.

F-19

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

RESTRICTED STOCK:

In July 2001, the Company offered to its existing colleagues, and certain
consultants, the right to exchange the Company stock options, having an exercise
price of $17.125 or more, for shares of restricted stock. As a result of the
offer, effective September 17, 2001, the Company issued approximately 530,671
shares of its common stock in exchange for the surrender of options to purchase
a total of 1,503,500 shares of the Company's Common Stock. The cost of this
exchange was recorded in stockholders' investment as deferred compensation based
upon the fair value of stock issued and is being expensed as the restrictions
lapse.

SUPPLEMENTAL RETIREMENT PLAN:

During 2001, the Company's board of directors approved the Tower Automotive
Supplemental Retirement Plan (the "Supplemental Retirement Plan"), which allows
certain employees who are restricted in their contributions to the Tower
Automotive Retirement Plan by certain statutory limitations on benefits to defer
receipt of all or a portion of their annual cash compensation. The Company makes
a matching contribution based on the terms of the plan. The Company's matching
contributions vests on the first day of the third plan year following the date
of the employee's deferral. The Company recorded $0.4 million of compensation
expense related to this plan during the year ended December 31, 2001.

STOCK-BASED COMPENSATION PLANS:

As discussed above, the Company has three stock option plans: the Stock
Option Plan, the Long Term Incentive Plan and the Independent Director Stock
Option Plan. Additionally the Company has two stock purchase plans: the Employee
Stock Purchase Plan and the Deferred Income Stock Plan. The Company has elected
to continue to account for these plans under APB No. 25, under which no
compensation cost has been recognized for employee groups and directors eligible
for the plans. Had compensation cost for these plans been determined as required
under SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's pro
forma net income (loss) and pro forma earnings per share would have been as
follows (in thousands, except per share data):

YEARS ENDED DECEMBER 31,
------------------------------
2001 2000 1999
--------- ------- --------

Net income (loss)
As Reported....................................... $(267,524) $13,434 $117,088
Pro Forma......................................... (271,396) 5,001 109,003
Basic earnings (loss) per share
As Reported....................................... $ (5.87) $ 0.29 $ 2.50
Pro Forma......................................... (5.95) 0.11 2.33
Diluted earnings (loss) per share
As Reported....................................... $ (5.87) $ 0.28 $ 2.10
Pro Forma......................................... (5.95) 0.11 1.97

The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes option pricing model with the following weighted average
assumptions: Risk free interest rates of 4.88 percent in 2001, 5.56 percent to
6.72 percent in 2000, and 4.54 percent in 1999; expected life of seven years for
2001, 2000, and 1999; expected volatility of 52 percent in 2001, 49 percent in
2000, and 40 percent in 1999; expected dividends of zero.

F-20

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTHER COMMON STOCK EQUIVALENTS:

In connection with the acquisition of Edgewood Tool and Manufacturing
Company ("Edgewood") in May 1994, the Company issued options to acquire 205,968
shares of Common Stock at an exercise price of $3.28 per share. These options
are fully exercisable through 2004. As of December 31, 2001, all of these
options were exercisable.

In connection with the acquisition of MSTI in May 1996, the Company issued
warrants to MascoTech, Inc. ("MascoTech") to acquire 400,000 shares of Common
Stock at an exercise price of $9 per share. On May 5, 2000, MascoTech exercised
all of the warrants outstanding under this agreement.

In addition, the Company has Convertible Subordinated Notes outstanding as
discussed in Note 8, and Convertible Preferred Securities as discussed in Note
5.

DIVIDENDS:

The Company has not declared or paid any cash dividends in the past. As
discussed in Note 8, the Company's debt agreements restrict the amount of
dividends the Company can declare or pay. As of December 31, 2001, under the
most restrictive debt covenants, the Company could not have paid any cash
dividends.

5. MANDATORILY REDEEMABLE TRUST CONVERTIBLE PREFERRED SECURITIES:

On June 9, 1998, Tower Automotive Capital Trust (the "Preferred Issuer"), a
wholly owned statutory business trust of the Company, completed the offering of
$258.8 million of its 6 3/4 percent Trust Convertible Preferred Securities
("Preferred Securities"), resulting in net proceeds of approximately $249.7
million. The Preferred Securities are redeemable, in whole or in part, on or
after June 30, 2001 and all Preferred Securities must be redeemed no later than
June 30, 2018. The Preferred Securities are convertible, at the option of the
holder, into common stock of the Company at a rate of 1.6280 shares of common
stock for each Preferred Security, which is equivalent to a conversion price of
$30.713 per share. The net proceeds of the offering were used to repay
outstanding indebtedness. Minority interest reflected in the accompanying
consolidated statements of operations represents dividends on the Preferred
Securities at a rate of 6 3/4 percent, net of income tax benefits at the
Company's incremental tax rate of 39 percent in 2001 and 40 percent in 2000 and
1999.

No separate financial statements of the Preferred Issuer have been included
herein. The Company does not consider that such financial statements would be
material to holders of Preferred Securities because (i) all of the voting
securities of the Preferred Issuer are owned, directly or indirectly, by the
Company, a reporting company under the Exchange Act, (ii) the Preferred Issuer
has no independent operations and exists for the sole purpose of issuing
securities representing undivided beneficial interests in the assets of the
Preferred Issuer and investing the proceeds thereof in 6 3/4 percent Convertible
Subordinated Debentures due June 30, 2018 issued by the Company and (iii) the
obligations of the Preferred Issuer under the Preferred Securities are fully and
unconditionally guaranteed by the Company.

6. ACQUISITIONS AND INVESTMENT IN JOINT VENTURES:

ACQUISITIONS:

On November 30, 2000 the Company completed the acquisition of Strojarne
Malacky, a.s. ("Presskam"), a manufacturer of upper body structural assemblies
for Volkswagen, Porsche and Skoda, located in Bratislava, Slovakia. The Company
paid total consideration of approximately $10 million for Presskam and intends
to use the investment to further support Volkswagen's Bratislava assembly
operation.

F-21

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On July 6, 2000, the Company acquired the remaining 60 percent equity
interest in Metalurgica Caterina S.A. ("Caterina") for approximately $42
million. The initial 40 percent interest was acquired in March 1998, for
approximately $48 million. Caterina is a supplier of structural stampings and
assemblies to the Brazilian automotive market, including Volkswagen and
Mercedes-Benz.

On May 3, 2000, the Company acquired all of the outstanding common stock of
Algoods, Inc. ("Algoods") for total consideration of approximately $33 million.
Algoods manufactures aluminum heat shields and impact discs for the North
American automotive industry from aluminum mini-mill and manufacturing
operations located in Toronto, Canada. Its primary customer is DaimlerChrysler.
The acquisition of Algoods represents a significant investment in processing
technology for lightweight materials which complements the Company's existing
heat shield capabilities and provides opportunities for application in other
lightweight vehicle structural products.

Effective January 1, 2000, the Company acquired all of the outstanding
shares of Dr. Meleghy GmbH & Co. KG Werkzeugbau und Presswerk, Bergisch Gladbach
("Dr. Meleghy") for approximately $86 million plus earnout payments of $2.7
million paid in 2001 and $26.9 million to be paid in 2002. Dr. Meleghy designs
and produces structural stampings, assemblies, exposed surface panels and
modules to the European automotive industry. Dr. Meleghy also designs and
manufactures tools and dies for use in its production and for the external
market. Dr. Meleghy operates three facilities in Germany and one facility in
both Hungary and Poland. Dr. Meleghy's main customers include DaimlerChrysler,
Audi, Volkswagen, Ford, Opel, and BMW. Products offered by Dr. Meleghy include
body side panels, floor pan assemblies, and miscellaneous structural stampings.

On October 29, 1999, the Company invested $21 million for new shares
representing a 49 percent equity interest in Seojin Industrial Company Limited
("Seojin"). Seojin is a supplier of frames, modules and structural components to
the Korean automotive industry. In addition, the Company advanced $19 million to
Seojin in exchange for variable rate convertible bonds (the "Bonds") due October
30, 2009. The conversion rate was based on a predetermined formula that would
increase the Company's equity interest to 66 percent. On October 31, 2000, the
Company exercised its right to convert the bonds into 17 percent of the common
stock of Seojin. Based upon the formula for conversion of the Seojin bonds, the
Company paid an additional $1.2 million for the 17 percent equity interest.

On July 29, 1999, the Company acquired all of the outstanding stock of
Active Tool Corporation and Active Products Corporation (collectively, "Active")
for total approximate consideration of $315 million. Active, which has five
facilities, designs and produces a variety of large unexposed structural
stampings, exposed surface panels, and modules to the North American automotive
industry. Active's main customers include DaimlerChrysler, Ford, General Motors,
and Saturn. Products offered by Active include body sides, pickup box sides,
fenders, floor pan assemblies, door panels, pillars, and heat shields. The
acquisition of Active enhances the Company's ability to manufacture large and
complex structures, as well as exposed surface panels.

These acquisitions have been accounted for using the purchase method of
accounting and, accordingly, the assets acquired and liabilities assumed have
been recorded at fair value as of the dates of the acquisitions. The excess of
the purchase price over the fair value of the assets acquired and liabilities
assumed has been recorded as goodwill. Results of operations for these
acquisitions have been included in the accompanying consolidated financial
statements since the dates of acquisition.

In conjunction with its acquisitions, reserves have been established for
certain costs associated with facility shutdown and consolidation activities,
for general and payroll related costs primarily for planned

F-22

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

employee termination activities, and for provisions for acquired loss contracts.
A rollforward of these reserves is as follows (in millions):

FACILITY PAYROLL LOSS
SHUTDOWN COSTS RELATED COSTS CONTRACTS
-------------- ------------- ---------

December 31, 1999............................... $13.8 $ 6.4 $ 24.8
Additions..................................... 1.0 -- 12.3
Utilizations.................................. (7.5) (2.6) (8.4)
----- ----- ------
December 31, 2000............................... 7.3 3.8 28.7
Additions..................................... -- -- --
Utilization................................... (2.1) (2.7) (11.7)
----- ----- ------
December 31, 2001............................... $ 5.2 $ 1.1 $ 17.0
===== ===== ======

The timing of facility shutdown and consolidation activities were adjusted
to reflect customer concerns with supply interruption. As of December 31, 2001,
the facilities have been shutdown, but the Company continues to incur costs
related to maintenance, taxes and other costs related to buildings that are held
for sale. These reserves have been utilized as originally intended and
management believes the liabilities recorded for shutdown and consolidation
activities are adequate but not excessive as of December 31, 2001.

A reconciliation of the purchase accounting liabilities detailed in the
table above to the total purchase accounting liabilities shown in Note 2 follows
(in millions):

DECEMBER 31,
-------------
2001 2000
----- -----

Facility shutdown costs..................................... $ 5.2 $ 7.3
Payroll-related costs....................................... 1.1 3.8
Loss contracts.............................................. 17.0 28.7
Environmental liabilities................................... 10.8 12.5
Customer obligations........................................ 2.7 4.4
Legal and other............................................. 6.3 11.7
----- -----
Total purchase accounting reserves..................... $43.1 $68.4
===== =====

INVESTMENT IN JOINT VENTURES:

On January 2, 2001, the Company invested approximately $2 million in the
formation of a prototyping joint venture with Carron Industries. The joint
venture, Carron Prototype Center, located in Inkster, Michigan, provides the
Company with detail stamping and tooling capabilities and has capacity for full
frame prototypes and vehicle builds. The Company accounts for this investment
using the cost method.

On September 21, 2000, the Company acquired a 17 percent equity interest in
Yorozu Corporation ("Yorozu"), a supplier of suspension modules and structural
parts to the Asian and North American automotive markets, from Nissan Motor Co.
Ltd. ("Nissan"). Yorozu is based in Japan and is publicly traded on the first
tier of the Tokyo Stock Exchange. Its principal customers include Nissan, Auto
Alliance, General Motors, Ford, and Honda. The Company will pay Nissan
approximately $68 million over two and one half years for the original 17
percent interest and an option to increase its holdings in Yorozu by 13.8
percent through the purchase of additional Yorozu shares, which was exercised on
February 20, 2001. As of December 31, 2001, $29.5 million remains to be paid
under these arrangements and is recorded as indebtedness on the Company's
balance sheet. As of December 31, 2001, the traded market value of shares held
in Yorozu was $17.6 million and the Company's investment in Yorozu was $54.8
million. The Company

F-23

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

has determined that the investment in Yorozu has not suffered a permanent
decline in market value. This determination is based on the long-term nature of
the investment and the fact that the Company believes that there is a
significant premium associated with the large block of stock held.

On March 23, 2000, the Company invested $2.1 million in the formation of a
product technology and development joint venture with Defiance Testing &
Engineering Services, Inc., a subsidiary of GenTek Inc. The joint venture, DTA
Development, located in Westland, Michigan, provides the Company with product-
testing services. Traditionally, the Company utilizes both internal and external
product testing extensively to validate complex systems during the development
stage of a program. This joint venture allows the Company to have access to a
broader and more cost efficient range of testing capabilities. DTA Development
blends the benefits of chassis product technology and development activities
with leading edge commercial testing services.

On October 14, 1999, the Company loaned $30.0 million to J. L. French
Automotive Castings, Inc., ("J.L. French") in exchange for a convertible
subordinated promissory note due October 14, 2009 that bears interest at 7.5
percent. On November 30, 2000, the Company exercised its option to convert the
note into 7,124 shares of Class A "1" Common Stock of J. L. French, which has a
7.5 percent pay-in-kind dividend right.

Additionally, on November 30, 2000, the Company invested $2.9 million in J.
L. French through the purchase of Class P Common Stock, which has an 8 percent
pay-in-kind dividend right. On May 24, 2000, the Company invested $11.0 million
in J. L. French through the purchase of Class A Common Stock. At December 31,
2001, the Company has an ownership interest of approximately 16 percent in J. L.
French. As discussed in Note 3, the Company evaluated its investment in J.L.
French and determined that the investment has been impaired. Due to this
impairment, the Company recorded a charge of $46.3 million to write off the
entire investment in J.L. French during the fourth quarter of 2001.

The Company is a 40 percent partner in Metalsa S. de R.L. ("Metalsa") with
Promotora de Empresas Zano, S.A. de C.V. ("Proeza"). Metalsa is the largest
supplier of vehicle frames and structures in Mexico. In addition, the parties
have entered into a technology sharing arrangement that enables both companies
to utilize the latest available product and process technology. Metalsa is
headquartered in Monterrey, Mexico and has manufacturing facilities in Monterrey
and San Luis Potosi, Mexico. Metalsa's customers include DaimlerChrysler,
General Motors, Ford, and Nissan. In connection with the original agreement, the
Company paid $120 million to Proeza, with an additional amount of up to $45
million payable based upon net earnings of Metalsa for the years 1998, 1999 and
2000. Based upon Metalsa's 1998 and 1999 net earnings, the Company paid Proeza
$9.0 million and $7.9 million of additional consideration during 1999 and 2000,
respectively. Based upon Metalsa's 2000 net earnings, the Company paid $8.6
million of additional consideration during the first quarter of 2002.

F-24

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Summarized unaudited financial information for Metalsa is as follows (in
thousands):

DECEMBER 31,
------------------------------
2001 2000 1999
-------- -------- --------

CONDENSED STATEMENTS OF EARNINGS
Revenues........................................... $280,543 $258,951 $239,902
Operating income................................... $ 31,940 $ 38,355 $ 54,104
Net income......................................... $ 21,520 $ 31,001 $ 28,679
======== ======== ========
CONDENSED BALANCE SHEETS
Current assets..................................... $115,728 $ 79,182 $ 78,712
Noncurrent assets.................................. 303,717 234,105 147,901
-------- -------- --------
$419,445 $313,287 $226,613
======== ======== ========
Current liabilities.................................. $ 64,502 $ 58,550 $ 45,288
Noncurrent liabilities............................... 157,819 105,517 55,293
Stockholders' investment............................. 197,124 149,220 126,032
-------- -------- --------
$419,445 $313,287 $226,613
======== ======== ========

The accompanying unaudited consolidated pro forma results of operations for
the year ended December 31, 2000 give effect to the following as if they were
completed at the beginning of the year: (i) the acquisitions of Algoods,
Caterina, Seojin and Presskam, (ii) the refinancing of bank indebtedness under
the new senior credit facility (Note 8), and (iii) the completion of the sale of
the senior Euro notes and the application of the net proceeds therefrom (Note
8). The accompanying unaudited consolidated pro forma results of operations for
the year ended December 31, 1999 give effect to the transactions described above
and the following as if they were completed at the beginning of the year: (i)
the acquisition of Active, (ii) the investment in Seojin, and (iii) the $325
million term loan add on facility (Note 8). The unaudited pro forma financial
information does not purport to represent what the Company's results of
operations would actually have been if such transactions in fact had occurred at
such date or to project the Company's results of future operations (in
thousands, except per share data):

PRO FORMA FOR THE YEARS
ENDED DECEMBER 31,
-----------------------
2000 1999
---------- ----------

Revenues.................................................... $2,920,727 $2,896,176
Net income.................................................. $ 9,276 $ 123,109
Basic earnings per share.................................... $ 0.20 $ 2.63
Diluted earnings per share.................................. $ 0.20 $ 2.19

7. DIVESTITURES:

On December 7, 2000, the Company sold its Roanoke, Virginia heavy truck
rail manufacturing business (the "Roanoke Heavy Truck Business") to its joint
venture partner, Metalsa, for net proceeds of approximately $55 million, which
approximated the book value of the net assets sold, plus an earnout of up to $30
million based on achieving certain profit levels over the three years following
the sale. Through December 31, 2001, no additional payments have been earned.
The net proceeds were used to repay outstanding indebtedness under the revolving
credit facility. The results of operations of the Roanoke Heavy Truck Business
are not significant to the operating results of the Company as a whole and have,
therefore, been excluded from the pro forma financial information in Note 6.

F-25

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. LONG-TERM DEBT:

Long-term debt consisted of the following (in thousands):

DECEMBER 31,
----------------------
2001 2000
--------- ----------

Revolving credit facility, due July 2006, interest at prime
or LIBOR plus a margin ranging from 0 to 200 basis points
(3.5 percent at December 31, 2001 and 8.45 percent at
December 31, 2000)........................................ $ 9,300 $ 274,000
Revolving credit facility, multi currency borrowings, due
July 2006, interest at prime or LIBOR plus a margin
ranging from 0 to 200 basis points (4.26 percent at
December 31, 2001 and 5.89 percent at December 31, 2000).. 91,308 71,919
Term credit facility, due in quarterly repayments beginning
June 2002 to July 2006. Interest at prime or LIBOR plus a
margin ranging from 0 to 200 basis points (3.85 percent at
December 31, 2001 and 8.27 percent at December 31,
2000)..................................................... 325,000 325,000
R. J. Tower Corporation 9.25 percent Senior Euro Notes due
August 2010............................................... 133,560 141,330
Industrial development revenue bonds, due in lump sum
payments in June 2024 and March 2025, interest payable
monthly at a rate adjusted weekly by the bond remarketing
agent (2.17 percent at December 31, 2001 and 6.82 percent
at December 31, 2000)..................................... 43,765 43,765
Convertible Edgewood notes, due May 2003, interest at 5.75
percent payable quarterly................................. 50 878
Other foreign subsidiary indebtedness, consisting primarily
of borrowings at Seojin, interest ranging from 4.53
percent to 13.82 percent, renewable annually.............. 136,987 151,171
Other....................................................... 30,474 72,969
--------- ----------
770,444 1,081,032
Less -- Current maturities.................................. (169,360) (147,590)
--------- ----------
$ 601,084 $ 933,442
========= ==========

Future maturities of long-term debt as of December 31, 2001 are as follows
(in thousands):

2002........................................................ $169,360
2003........................................................ 97,157
2004........................................................ 77,685
2005........................................................ 84,223
2006........................................................ 148,108
Thereafter.................................................. 193,911
--------
$770,444
========

On July 25, 2000, the Company replaced its previous $750 million amortizing
credit agreement with a new six-year $1.15 billion senior unsecured credit
agreement. The new credit agreement includes a non-amortizing revolving facility
of $825 million along with an amortizing term loan of $325 million. The new
facility also includes a multi-currency borrowing feature that allows the
Company to borrow up to $500 million in certain freely tradable offshore
currencies, and letter of credit sublimits of $100 million. As of December 31,
2001, $20.0 million of the outstanding borrowings are denominated in Japanese
yen, $55.6 million are denominated in Euro, and $15.7 million are denominated in
Canadian dollars. Interest on the new credit

F-26

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

facility is at the financial institutions' reference rate, LIBOR, or the
Eurodollar rate plus a margin ranging from 0 to 200 basis points depending on
the ratio of the consolidated funded debt for restricted subsidiaries of the
Company to its total EBITDA. The weighted average interest rate for such
borrowings was 7.0 percent and 7.3 percent for years ended December 31, 2001 and
2000, respectively. The new credit agreement has a final maturity of 2006. As a
result of the debt replacement, the Company recorded an extraordinary loss, net
of tax, of $3.0 million during the third quarter of 2000.

The Credit Agreement requires the Company to meet certain financial tests,
including but not limited to a minimum interest coverage and maximum leverage
ratio. The credit agreement limits the Company's ability to pay dividends. As of
December 31, 2001, the Company was in compliance with all debt covenants.

On July 25, 2000, R. J. Tower Corporation (the "Issuer"), a wholly-owned
subsidiary of the Company, issued Euro-denominated senior unsecured notes in the
amount of E150 million ($133.6 million at December 31, 2001). The notes bear
interest at a rate of 9.25 percent, payable semi-annually. The notes rank
equally with all of the Company's other unsecured and unsubordinated debt. The
net proceeds after issuance costs were used to repay a portion of the Company's
existing Euro-denominated indebtedness under its credit facility. The notes
mature on August 1, 2010.

During September 2000, the Company entered into an interest rate swap
contract to hedge against interest rate exposure on approximately $160 million
of its floating rate indebtedness under its $1.15 billion senior unsecured
credit facility. The contracts have the effect of converting the floating rate
interest to a fixed rate of approximately 6.9 percent, plus any applicable
margin required under the revolving credit facility. The interest rate swap
contract was executed to balance the Company's fixed-rate and floating-rate debt
portfolios and expires in September 2005.

For the periods presented through July 24, 2000, the Company's Credit
Agreement included an amortizing revolving credit facility that provided for
borrowings of up to $750 million on an unsecured basis with a letter of credit
sublimit of $75 million. Interest on the credit facility was at the prime rate
or LIBOR plus a margin ranging from 17 to 50 basis points depending upon the
ratio of the consolidated indebtedness of the Company to its total
capitalization.

In July 1997, the Company completed the offering of $200 million of
Convertible Subordinated Notes (the "Notes"). The Notes bear interest at 5
percent, are unsecured, due on August 1, 2004 and are convertible into Common
Stock at a conversion price of $25.88 per share. The Company may make optional
redemptions of the Notes after August 1, 2000 at amounts ranging from 102.857
percent to 100.714 percent of face value. In the event of a change in control
(as defined) the holders of the Notes may require the Company to redeem the
Notes at face value plus accrued interest. Proceeds from the Notes were used to
repay outstanding indebtedness under the revolving credit facility.

In 1994 and 1995, the Company issued $25.0 million and $20.0 million,
respectively, of industrial development revenue bonds related to the
construction and equipping of a manufacturing facility in Bardstown, Kentucky.
The bonds are collateralized by letters of credit.

F-27

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. INCOME TAXES:

The provision for income taxes consisted of the following (in thousands):

YEARS ENDED DECEMBER 31,
-----------------------------
2001 2000 1999
-------- -------- -------

Currently payable --
Domestic............................................ $ 201 $ 19,383 $25,422
Foreign............................................. 7,245 6,609 3,916
-------- -------- -------
Total............................................ 7,446 25,992 29,338
Deferred --
Domestic............................................ (75,139) (13,264) 46,994
Foreign............................................. (5,619) (10,109) (1,466)
-------- -------- -------
Total............................................ (80,758) (23,373) 45,528
-------- -------- -------
Total............................................ $(73,312) $ 2,619 $74,866
======== ======== =======

A reconciliation of income taxes computed at the statutory rates to the
reported income tax provision is as follows (in thousands):

YEARS ENDED DECEMBER 31,
----------------------------
2001 2000 1999
--------- ------ -------

Taxes at federal statutory rates....................... $(120,514) $2,463 $65,508
State income taxes, net of federal benefit............. 2,503 852 4,940
Effect of permanent differences, primarily interest
expense and nondeductible goodwill................... 32,174 (696) 4,418
Valuation allowance.................................... 16,254 -- --
Foreign provision in excess of (less than) U.S. tax
rate................................................. (3,729) -- --
--------- ------ -------
Total............................................. $ (73,312) $2,619 $74,866
========= ====== =======

The summary of income (loss) before provision (benefit) for income taxes,
equity in earnings of joint ventures, minority interests and extraordinary items
consisted of the following (in thousands):

YEARS ENDED DECEMBER 31,
------------------------------
2001 2000 1999
--------- ------- --------

Domestic............................................. $(364,688) $(4,669) $183,113
Foreign.............................................. 20,362 11,706 4,053
--------- ------- --------
Total........................................... $(344,326) $ 7,037 $187,166
========= ======= ========

F-28

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A summary of deferred income tax assets (liabilities) is as follows (in
thousands):

DECEMBER 31,
--------------------
2001 2000
-------- ---------

Deferred Income Tax Assets:
Accrued compensation costs................................ $ 11,569 $ 8,446
Postretirement benefit obligations........................ 31,952 39,435
Loss contracts............................................ 5,397 14,950
Facility closure and consolidation costs.................. 48,009 37,626
Net operating loss carryforwards and tax credits.......... 76,618 34,365
Investment valuation adjustments.......................... 16,254 --
Other reserves and accruals not currently deductible for
tax purposes........................................... 10,975 23,524
-------- ---------
200,774 158,346
Less: Valuation allowance.............................. (16,254) --
-------- ---------
Total deferred income tax assets....................... 184,520 158,346
Deferred Income Tax Liabilities -- Depreciation lives and
methods................................................... (96,736) (151,320)
-------- ---------
Net deferred tax assets................................ $ 87,784 $ 7,026
======== =========

Net current deferred tax assets of $26.3 million in 2001 and $29.3 million
in 2000 have been recorded in other current assets. The valuation allowance has
been provided due to the uncertainty of the use of the tax benefit associated
with a specific reserve recorded against the carrying value of a cost-based
investment.

The Company has an alternative minimum tax ("AMT") credit carryforward of
approximately $21.1 million. The AMT credit has an indefinite carryforward
period. The Company has federal net operating loss carryforwards ("NOL's") of
approximately $69.5 million which expire 2020 through 2021 and various state
NOL's that expire through 2021.

The Company has not recorded deferred income taxes applicable to
undistributed earnings of its foreign joint venture operations as all such
earnings are deemed to be indefinitely reinvested in those operations. If the
earnings of such joint ventures were not indefinitely reinvested, a deferred
liability would have been required which would not have been material as of
December 31, 2001 or 2000. Undistributed amounts, if remitted in the future, may
not result in additional U.S. income taxes because of the use of available
foreign tax credits at that time.

F-29

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. SEGMENT INFORMATION:

The Company produces a broad range of assemblies and modules for vehicle
body structures and suspension systems for the global automotive industry. These
operations have similar characteristics including the nature of products,
production processes and customers and produce lower vehicle structures, body
structures (including Class A surfaces), suspension components, and modular
assemblies for the automotive industry. Management reviews the operating results
of the Company and makes decisions based upon two operating segments: United
States/Canada and International. The accounting policies of the segments are the
same as those described in the summary of significant accounting policies (see
Note 2). Financial information by segment is as follows (in thousands):

UNITED STATES/
CANADA INTERNATIONAL TOTAL
-------------- ------------- ----------

2001:
Revenues........................................ $1,777,361 $690,072 $2,467,433
Interest income................................. 4,859 1,695 6,554
Interest expense................................ 66,580 13,739 80,319
Operating income (loss)......................... (315,387) 44,826 (270,561)
Total assets.................................... 2,041,851 491,585 2,533,436
Capital expenditures, net....................... 131,455 62,500 193,955
Depreciation and amortization expense........... 126,863 33,030 159,893
Restructuring and asset impairment charges...... 383,739 -- 383,739
Provision (benefit) for income taxes............ (80,008) 6,696 (73,312)
2000:
Revenues........................................ $2,163,358 $368,595 $2,531,953
Interest income................................. 5,955 496 6,451
Interest expense................................ 63,194 7,968 71,162
Operating income................................ 45,463 26,285 71,748
Total assets.................................... 2,516,000 376,747 2,892,747
Capital expenditures, net....................... 78,512 15,076 93,588
Depreciation and amortization expense........... 126,011 18,794 144,805
Restructuring and asset impairment charges...... 141,326 -- 141,326
Provision (benefit) for income taxes............ (2,963) 5,582 2,619
1999:
Revenues........................................ $2,042,998 $127,005 $2,170,003
Interest income................................. 1,338 172 1,510
Interest expense................................ 35,965 3,526 39,491
Operating income................................ 216,492 8,655 225,147
Total assets.................................... 2,377,849 174,701 2,552,550
Capital expenditures, net....................... 185,926 11,389 197,315
Depreciation and amortization expense........... 104,731 6,880 111,611
Restructuring and asset impairment charges...... -- -- --
Provision for income taxes...................... 73,139 1,727 74,866

F-30

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following is a summary of revenues and long-lived assets by geographic
location (in thousands):

YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------
2001 2000 1999
----------------------- ----------------------- -----------------------
LONG-LIVED LONG-LIVED LONG-LIVED
REVENUES ASSETS REVENUES ASSETS REVENUES ASSETS
---------- ---------- ---------- ---------- ---------- ----------

United States and Canada... $1,777,361 $ 852,887 $2,163,358 $ 985,215 $2,042,998 $1,034,745
Europe..................... 278,789 121,993 256,970 114,920 127,005 58,082
Asia....................... 376,040 159,940 91,270 118,254 -- --
Mexico and South America... 35,243 12,972 20,355 11,863 -- --
---------- ---------- ---------- ---------- ---------- ----------
$2,467,433 $1,147,792 $2,531,953 $1,230,252 $2,170,003 $1,092,827
========== ========== ========== ========== ========== ==========

Revenues are attributed to geographic locations based on the location of
specific production. Long-lived assets consist of net property, plant and
equipment and capitalized tooling, and excludes intangible assets.

The following is a summary of the approximate composition by product
category of the Company's revenues (in thousands):

YEARS ENDED DECEMBER 31,
------------------------------------
2001 2000 1999
---------- ---------- ----------

Body structures and assemblies (including Class A
surfaces)...................................... $ 971,858 $ 998,407 $ 543,175
Lower vehicle structures......................... 895,118 1,029,596 1,205,873
Suspension modules and systems................... 355,981 270,892 208,700
Suspension components............................ 198,296 199,567 205,914
Other............................................ 46,180 33,491 6,341
---------- ---------- ----------
$2,467,433 $2,531,953 $2,170,003
========== ========== ==========

The Company sells its products directly to automotive manufacturers.
Following is a summary of customers that accounted for 10 percent or more of
consolidated revenues in any of the three years in the period ended December 31,
2001:

2001 2000 1999
---- ---- ----

Ford........................................................ 35% 37% 38%
DaimlerChrysler............................................. 25 31 29
Hyundai/Kia................................................. 12 4 --
General Motors.............................................. 4 5 10

Receivables from these customers represented 41 percent of total accounts
receivable at December 31, 2001, 57 percent of total accounts receivable at
December 31, 2000 and 65 percent of total accounts receivable at December 31,
1999.

11. EMPLOYEE BENEFIT PLANS:

The Company sponsors various pension and other postretirement benefit plans
for its employees.

RETIREMENT PLANS:

The Company's UAW Retirement Income Plan and the Tower Automotive Pension
Plan provides for substantially all union employees. Benefits under the plans
are based on years of service. Contributions by the Company are intended to
provide not only for benefits attributed to service to date, but also for those
benefits

F-31

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

expected to be earned in the future. The Company's funding policy is to
contribute annually the amounts sufficient to meet the higher of the minimum
funding requirements set forth in the Employee Retirement Income Security Act of
1974 or the minimum funding requirements under the Company's union contracts.

The following tables provide a reconciliation of the changes in the benefit
obligations and fair value of assets for the defined benefit pension plans (in
thousands):

2001 2000
-------- --------

RECONCILIATION OF FAIR VALUE OF PLAN ASSETS:
Fair value of plan assets at the beginning of the year...... $104,884 $ 68,266
Actual return on plan assets................................ (10,746) 6,089
Employer contributions...................................... -- 32,455
Benefits paid............................................... (4,783) (1,926)
-------- --------
Fair value of plan assets at the end of the year....... $ 89,355 $104,884
======== ========
CHANGE IN BENEFIT OBLIGATIONS:
Benefit obligations at the beginning of the year............ $115,525 $ 99,282
Service cost................................................ 9,956 11,676
Interest cost............................................... 9,883 8,126
Plan amendments............................................. -- 3,187
Actuarial loss (gain)....................................... 11,171 (4,298)
Benefits paid............................................... (4,783) (1,926)
Curtailment loss (gain)..................................... 1,422 (1,107)
Settlements................................................. -- 585
Special termination benefit................................. 311 --
-------- --------
Benefit obligations at the end of the year............. $143,485 $115,525
======== ========
FUNDED STATUS RECONCILIATION:
Funded status............................................... $(54,130) $(10,642)
Unrecognized transition asset............................... (67) (98)
Unrecognized prior service cost............................. 9,787 23,702
Unrecognized actuarial losses (gains)....................... 25,065 (8,378)
-------- --------
Net amount recognized.................................. $(19,345) $ 4,584
======== ========
AMOUNTS RECOGNIZED IN THE BALANCE SHEET AS OF EACH YEAR END:
Accrued benefit liability................................... $(51,396) $(10,772)
Intangible asset............................................ 9,787 15,356
Accumulated other comprehensive income...................... 22,264 --
-------- --------
Net amount recognized.................................. $(19,345) $ 4,584
======== ========

The Tower Automotive Pension Plan was the only pension plan with an
accumulated benefit obligation in excess of plan assets. The plan's accumulated
benefit obligation was $133.9 million and $108.9 million at September 30, 2001
and 2000, respectively. The fair value of the assets was $84.1 million and $98.5
million at September 30, 2001 and 2000, respectively.

F-32

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In connection with the comprehensive realignment plans discussed in Note 3,
benefits for certain employees covered by the Tower Automotive Pension Plan and
the UAW Retirement Income Plan are accounted for as a curtailment for the
periods ending December 31, 2001 and 2000.

The following table provides the components of net periodic benefit cost
for the plans for the years ended December 31, 2001, 2000, and 1999 (in
thousands):

2001 2000 1999
------- ------- -------

Service cost............................................ $ 9,956 $11,677 $11,350
Interest cost........................................... 9,883 8,126 4,702
Expected return on plan assets.......................... (9,815) (7,431) (2,980)
Amortization of transition asset........................ (31) (31) (31)
Amortization of prior-service cost...................... 1,077 2,533 1,902
Amortization of net (gains) losses...................... (287) (158) 202
Curtailment loss (gain)................................. 12,839 (572) --
Special termination benefit............................. 311 586 --
------- ------- -------
Net periodic benefit cost.......................... $23,933 $14,730 $15,145
======= ======= =======

The assumptions used in the measurement of the Company's benefit obligation
are as follows:

2001 2000
--------- ---------

Weighted-average assumptions of each year end:
Discount rate............................................. 7.5% 8.1%
Expected return on plan assets............................ 9.5% 9.5%
Rate of compensation increase............................. 4.5% 4.5%
Measurement date.......................................... 9/30/2001 9/30/2000

The Company contributes to a union sponsored multi-employer pension plan
providing defined benefits to certain Michigan hourly employees. Contributions
to the pension plan are based on rates set forth in the Company's union
contracts. The expense related to this plan was $0.7 million for the year ended
December 31, 2001, $0.8 million for the year ended December 31, 2000 and $0.8
million for the year ended December 31, 1999.

The Company also contributes to a union sponsored multi-employer pension
plan providing defined benefits for certain hourly employees of the Milwaukee
facility. Expense relating to this plan was $0.6 million, $0.5 million and $1.3
million for the years ended December 31, 2001, 2000 and 1999, respectively. The
expense is determined based on contractual rates with the union.

The Company also maintains a qualified profit sharing retirement plan and
401(k) employee savings plan covering certain salaried and hourly employees. The
expense related to these plans was $11.0 million during 2001 and 2000, and $9.7
million during 1999.

The Company sponsors a 401(k) employee savings plan covering certain union
employees. The Company matches a portion of the employee contributions made to
this plan. The expense under this plan in each of the three years in the period
ended December 31, 2001 was not material.

POSTRETIREMENT PLANS:

The Company provides certain medical insurance benefits for retired
employees. Certain employees of the Company are eligible for these benefits if
they remain employed until age 55 or 59 and fulfill other eligibility
requirements specified by the plans. Certain retirees between the ages of 55 and
62 must contribute

F-33

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

100 percent of the group rate for active employees. No contributions are
required for retirees 62 or older. Benefits are continued for dependents of
eligible retiree participants after the death of the retiree.

The following tables provide a reconciliation of the changes in the benefit
obligations for the retiree medical plans (in thousands):

2001 2000
--------- ---------

RECONCILIATION OF FAIR VALUE OF PLAN ASSETS:
Fair value of plan assets at the beginning of the year...... $ -- $ --
Employer contributions...................................... 12,435 12,606
Benefits paid............................................... (12,435) (12,606)
--------- ---------
Fair value of plan assets at the end of the year............ $ -- $ --
========= =========
CHANGE IN BENEFIT OBLIGATIONS:
Benefit obligations at the beginning of the year............ $ 117,664 $ 117,351
Service cost................................................ 862 1,524
Interest cost............................................... 10,676 9,174
Actuarial loss (gain)....................................... 28,671 3,227
Benefits paid............................................... (12,435) (12,606)
Curtailment loss (gain)..................................... 114 (1,007)
--------- ---------
Benefit obligations at the end of the year.................. $ 145,552 $ 117,663
========= =========
FUNDED STATUS RECONCILIATION:
Funded status............................................... $(145,552) $(117,663)
Unrecognized actuarial losses (gains)....................... 42,572 15,385
--------- ---------
Net amount recognized....................................... $(102,980) $(102,278)
========= =========
AMOUNTS RECOGNIZED IN THE BALANCE SHEET AS OF EACH YEAR END:
Accrued benefit liability................................... $(102,980) $(102,278)
========= =========

The following table provides the components of net periodic benefit cost
for the plans for the years ended December 31, (in thousands):

2001 2000 1999
------- ------- -------

Service cost............................................ $ 862 $ 1,524 $ 1,511
Interest cost........................................... 10,676 9,174 8,023
Amortization of net loss................................ 1,484 3,227 477
Curtailment loss........................................ 115 -- --
------- ------- -------
Net periodic benefit cost............................... $13,137 $13,925 $10,011
======= ======= =======

The discount rate used to measure the Company's post retirement medical
benefit obligation was 8.1 percent in 2001 and 2000.

For measurement purposes, an 11.5 percent annual rate of increase in per
capita cost of covered health care benefits was assumed for 2001. The rate was
assumed to decrease gradually to 5.5 percent for 2006 and remain at that level
thereafter.

F-34

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Assumed health care cost trend rates have a significant effect on the
amounts reported for the post retirement medical plans. A one percentage point
change in assumed health care costs trend rates would have the following effects
(in thousands):

INCREASE DECREASE
-------- --------

ONE PERCENTAGE POINT:
Effect on total service and interest cost components...... $ 184 $ 167
====== ======
Effect on the accumulated benefit obligation.............. $2,700 $2,409
====== ======

12. COMMITMENTS:

LEASES:

The Company leases office and manufacturing space and certain equipment
under lease agreements which require it to pay maintenance, insurance, taxes and
other expenses in addition to annual rentals. The Company has entered into
several leasing commitments with maturities of between 2002 and 2015. The
properties covered under these transactions include manufacturing equipment,
facilities and administrative offices. The leases provide for a substantial
residual value guarantee (less than 90 percent of the total cost), which may
become payable upon the termination of the transaction, and include purchase and
renewal options. As of December 31, 2001, residual value guarantees in
connection with these leases totaled approximately $103.4 million. Upon
termination of the leases, the Company expects the fair market value of the
leased properties to reduce substantially or eliminate entirely the payment
under the residual value guarantees. Future annual rental commitments at
December 31, 2001 under these leases are as follows (in thousands):

YEAR OPERATING CAPITAL
---- --------- -------

2002........................................................ $ 54,177 $3,227
2003........................................................ 53,288 4,449
2004........................................................ 53,565 275
2005........................................................ 53,108 --
2006........................................................ 47,679 --
Thereafter.................................................. 121,427 --
-------- ------
$383,244 $7,951
========
Less-amount representing interest........................... 608
------
Present value of minimum lease payments..................... $7,343
======

Total rent expense for all operating leases totaled $55.2 million, $21.5
million and $15.0 million in 2001, 2000 and 1999, respectively.

Rent commitments associated with acquired facilities which will not be
utilized by the Company have been excluded from the above amounts and were
provided for in the recording of the related acquisition, as discussed in Note
6.

LITIGATION:

The Company is party to certain claims arising in the ordinary course of
business. In the opinion of management, based upon the advice of legal counsel,
the outcomes of such claims are not expected to be material to the Company's
financial position and statements of operations.

F-35

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. RELATED PARTY TRANSACTIONS:

The Company has made payments to Hidden Creek Industries, an affiliate of
the Company, for certain acquisition related and other management services
totaling $0.6 million during 2001, $4.4 million during 2000 and $3.1 million
during 1999.

14. QUARTERLY FINANCIAL DATA (UNAUDITED):

The following is a condensed summary of quarterly results of operations for
2001 and 2000. The restructuring and asset impairment charges described in Note
3 are reflected in the fourth quarter 2001 and 2000 amounts. The sum of the per
share amounts for the quarters does not equal the total for the year due to the
effects of rounding and the anti-dilutive effects of certain common stock
equivalents (in thousands, except per share amounts):

BASIC DILUTED
OPERATING EARNINGS EARNINGS
GROSS INCOME NET INCOME (LOSS) (LOSS)
REVENUES PROFIT (LOSS) (LOSS) PER SHARE PER SHARE
---------- -------- --------- ---------- --------- ---------

2001:
First.................... $ 628,376 $ 79,271 $ 37,894 $ 12,861 $ 0.29 $ 0.28
Second................... 642,407 85,261 44,111 16,672 0.38 0.35
Third.................... 557,785 55,419 16,185 (1,364) (0.03) (0.03)
Fourth................... 638,865 57,234 (368,751) (295,693) (6.15) (6.15)
---------- -------- --------- --------- ------ ------
$2,467,433 $277,185 $(270,561) $(267,524) $(5.87) $(5.87)
========== ======== ========= ========= ====== ======
2000:
First.................... $ 685,364 $111,722 $ 71,967 $ 37,123 $ 0.79 $ 0.65
Second................... 681,020 114,371 75,822 39,293 0.83 0.68
Third.................... 536,210 64,728 27,617 6,965 0.15 0.15
Fourth................... 629,359 80,773 (103,658) (69,947) (1.54) (1.54)
---------- -------- --------- --------- ------ ------
$2,531,953 $371,594 $ 71,748 $ 13,434 $ 0.29 $ 0.28
========== ======== ========= ========= ====== ======

15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:

The following consolidating financial information presents balance sheets,
statements of operations and cash flow information related to the Company's
business. Each Guarantor, as defined, is a direct or indirect wholly-owned
subsidiary of the Company and has fully and unconditionally guaranteed the 9.25
percent senior unsecured notes issued by R. J. Tower Corporation, on a joint and
several basis. Tower Automotive, Inc. (the parent company) has also fully and
unconditionally guaranteed the note and is reflected as the Parent Guarantor in
the consolidating financial information. The Non-Guarantors are the Company's
foreign subsidiaries. Separate financial statements and other disclosures
concerning the Guarantors have not been presented because management believes
that such information is not material to investors.

F-36

TOWER AUTOMOTIVE INC.

CONSOLIDATING BALANCE SHEETS
AT DECEMBER 31, 2001

R. J. TOWER PARENT GUARANTOR NON-GUARANTOR
CORPORATION GUARANTOR COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- ---------- ------------- ------------ ------------
(AMOUNTS IN THOUSANDS)

ASSETS
Current assets:
Cash and cash equivalents........ $ -- $ -- $ 2,444 $ 19,323 $ -- $ 21,767
Accounts receivable.............. -- -- 140,402 76,236 -- 216,638
Inventories...................... -- -- 72,003 40,533 -- 112,536
Prepaid tooling and other........ -- -- 52,238 36,991 -- 89,229
-------- --------- ---------- -------- ----------- ----------
Total current assets.......... -- -- 267,087 173,083 -- 440,170
-------- --------- ---------- -------- ----------- ----------
Property, plant and equipment,
net.............................. -- -- 824,437 295,822 -- 1,120,259
Investments in joint ventures...... 237,834 -- 4,177 1,187 -- 243,198
Investment in subsidiaries......... 744,808 447,408 -- -- (1,192,216) --
Goodwill and other assets, net..... 9,659 9,700 428,186 282,264 -- 729,809
-------- --------- ---------- -------- ----------- ----------
$992,301 $ 457,108 $1,523,887 $752,356 $(1,192,216) $2,533,436
======== ========= ========== ======== =========== ==========

LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term
debt and capital lease
obligations................... $ 67,381 $ -- $ 2,723 $101,979 $ -- $ 172,083
Accounts payable................. -- -- 263,800 105,110 -- 368,910
Accrued liabilities.............. 7,234 4,167 203,832 63,729 -- 278,962
-------- --------- ---------- -------- ----------- ----------
Total current liabilities..... 74,615 4,167 470,355 270,818 -- 819,955
-------- --------- ---------- -------- ----------- ----------
Long-term debt, net of current
maturities....................... 472,373 -- 44,765 83,946 -- 601,084
Obligations under capital leases,
net of current maturities........ -- -- 4,620 -- -- 4,620
Convertible subordinated notes..... -- 199,984 -- -- -- 199,984
Due to/(from) affiliates........... (27,392) (453,201) 428,037 52,556 -- --
Other noncurrent liabilities....... -- -- 150,639 50,996 -- 201,635
-------- --------- ---------- -------- ----------- ----------
Total noncurrent
liabilities................. 444,981 (253,217) 628,061 187,498 -- 1,007,323
-------- --------- ---------- -------- ----------- ----------
Manditorily redeemable trust
convertible preferred
securities....................... -- 258,750 -- -- -- 258,750
Stockholders' investment........... 481,969 447,408 439,943 304,865 (1,192,216) 481,969
Accumulated other comprehensive
loss............................. (9,264) -- (14,472) (10,825) -- (34,561)
-------- --------- ---------- -------- ----------- ----------
Total stockholders'
investment.................. 472,705 447,408 425,471 294,040 (1,192,216) 447,408
-------- --------- ---------- -------- ----------- ----------
$992,301 $ 457,108 $1,523,887 $752,356 $(1,192,216) $2,533,436
======== ========= ========== ======== =========== ==========

F-37

TOWER AUTOMOTIVE INC.

CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001

Revenues....................... $ -- $ -- $1,644,357 $823,076 $ -- $2,467,433
Cost of sales.................. -- -- 1,467,062 723,186 -- 2,190,248
--------- --------- ---------- -------- -------- ----------
Gross profit.............. -- -- 177,295 99,890 -- 277,185
Selling, general and
administrative expenses...... -- -- 103,591 35,612 -- 139,203
Restructuring and asset
impairment charges........... -- -- 383,614 125 -- 383,739
Amortization expense........... 1,774 1,301 14,660 7,069 -- 24,804
--------- --------- ---------- -------- -------- ----------
Operating income (loss)... (1,774) (1,301) (324,570) 57,084 -- (270,561)
Interest expense, net.......... 60,621 7,516 (7,773) 13,401 -- 73,765
--------- --------- ---------- -------- -------- ----------
Income (loss) before
provision for income
taxes................... (62,395) (8,817) (316,797) 43,683 -- (344,326)
Provision (benefit) for income
taxes........................ (24,334) (3,439) (57,803) 12,264 -- (73,312)
--------- --------- ---------- -------- -------- ----------
Income (loss) before
equity in earnings of
joint ventures and
minority interest....... (38,061) (5,378) (258,994) 31,419 -- (271,014)
Equity in earnings of joint
ventures and subsidiaries,
net.......................... (213,429) (251,490) 300 -- 481,869 17,250
Minority interest, net......... -- (10,656) -- (3,104) -- (13,760)
--------- --------- ---------- -------- -------- ----------
Net income (loss)......... $(251,490) $(267,524) $ (258,694) $ 28,315 $481,869 $ (267,524)
========= ========= ========== ======== ======== ==========

F-38

TOWER AUTOMOTIVE INC.

CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2001

NON-
R. J. TOWER PARENT GUARANTOR GUARANTOR
CORPORATION GUARANTOR COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- --------- --------- ------------ ------------
(AMOUNTS IN THOUSANDS)

OPERATING ACTIVITIES:
Net income (loss).................. $ (251,490) $(267,524) $(258,694) $ 28,315 $ 481,869 $ (267,524)
Adjustments required to reconcile
net income (loss) to net cash
provided by (used in) operating
activities
Depreciation and amortization.... 1,774 1,301 122,026 34,792 -- 159,893
Deferred income tax provision
(benefit)..................... -- -- (65,976) (14,782) -- (80,758)
Equity in earnings of joint
ventures, net................. (16,950) -- (300) -- -- (17,250)
Restructuring and asset
impairment charge............. -- -- 383,614 125 -- 383,739
Changes in other operating
items......................... 251,214 381 281,364 (2,562) (194,682) 335,715
----------- --------- --------- --------- --------- -----------
Net cash provided by (used in)
operating activities........ (15,452) (265,842) 462,034 45,888 287,187 513,815
----------- --------- --------- --------- --------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net.......... -- -- (142,253) (51,702) -- (193,955)
Acquisitions and other, net........ 366,055 226,851 (316,282) 5,145 (287,187) (5,418)
----------- --------- --------- --------- --------- -----------
Net cash provided by (used in)
investing activities........ 366,055 226,851 (458,535) (46,557) (287,187) (199,373)
----------- --------- --------- --------- --------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings........... 2,201,333 -- -- 107,488 -- 2,308,821
Repayments of debt................. (2,533,164) -- (2,630) (108,066) -- (2,643,860)
Net proceeds from private placement
of stock......................... -- 37,461 -- -- -- 37,461
Net proceeds from the issuance of
common stock..................... -- 1,530 -- -- -- 1,530
----------- --------- --------- --------- --------- -----------
Net cash provided by (used
for) financing activities... (331,831) 38,991 (2,630) (578) -- (296,048)
----------- --------- --------- --------- --------- -----------
Net Change in Cash and Cash
Equivalents...................... 18,772 -- 869 (1,247) -- 18,394
Cash and Cash Equivalents,
Beginning of Period.............. (18,772) -- 1,575 20,570 -- 3,373
----------- --------- --------- --------- --------- -----------
Cash and Cash Equivalents, End of
Period........................... $ -- $ -- $ 2,444 $ 19,323 $ -- $ 21,767
=========== ========= ========= ========= ========= ===========

F-39

TOWER AUTOMOTIVE INC.

CONSOLIDATING BALANCE SHEETS
AT DECEMBER 31, 2000

ASSETS
Current assets:
Cash and cash equivalents....... $ (18,772) $ -- $ 1,575 $ 20,570 $ -- $ 3,373
Accounts receivable............. 6,983 381 172,332 99,011 -- 278,707
Inventories..................... 2,032 -- 83,479 46,967 -- 132,478
Prepaid tooling and other....... 24,704 -- 171,107 26,308 -- 222,119
--------- --------- ---------- -------- ----------- ----------
Total current assets......... 14,947 381 428,493 192,856 -- 636,677
--------- --------- ---------- -------- ----------- ----------
Property, plant and equipment,
net............................. 37,245 -- 836,175 238,360 -- 1,111,780
Investments in joint ventures..... 221,165 43,912 2,140 -- -- 267,217
Investment in subsidiaries........ 541,468 734,624 -- -- (1,276,092) --
Goodwill and other assets, net.... 21,527 11,001 536,142 308,403 -- 877,073
--------- --------- ---------- -------- ----------- ----------
$ 836,352 $ 789,918 $1,802,950 $739,619 $(1,276,092) $2,892,747
========= ========= ========== ======== =========== ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities
Current maturities of long-term
debt and capital lease
obligations.................. $ 56,569 $ -- $ 1,477 $ 91,020 $ -- $ 149,066
Accounts payable................ (13,260) -- 156,724 104,925 -- 248,389
Accrued liabilities............. 35,183 4,167 101,001 20,118 -- 160,469
--------- --------- ---------- -------- ----------- ----------
Total current liabilities.... 78,492 4,167 259,202 216,063 -- 557,924
--------- --------- ---------- -------- ----------- ----------
Long-term debt, net of current
maturities...................... 800,401 -- 44,787 88,254 -- 933,442
Obligations under capital leases,
net of current maturities....... -- -- 8,458 -- -- 8,458
Convertible subordinated notes.... -- 200,000 -- -- -- 200,000
Due to/(from) affiliates.......... (822,981) (373,094) 915,331 280,744 -- --
Deferred income taxes............. 29,102 -- (631) 5,413 -- 33,884
Other noncurrent liabilities...... 9,060 -- 132,105 59,029 -- 200,194
--------- --------- ---------- -------- ----------- ----------
Total noncurrent
liabilities................ 15,582 (173,094) 1,100,050 433,440 -- 1,375,978
--------- --------- ---------- -------- ----------- ----------
Mandatorily redeemable trust
convertible preferred
securities...................... -- 258,750 -- -- -- 258,750
Stockholders' investment.......... 744,296 700,095 443,698 97,770 (1,276,092) 709,767
Accumulated other comprehensive
loss............................ (2,018) -- -- (7,654) -- (9,672)
--------- --------- ---------- -------- ----------- ----------
Total stockholders'
investment................. 742,278 700,095 443,698 90,116 (1,276,092) 700,095
--------- --------- ---------- -------- ----------- ----------
$ 836,352 $ 789,918 $1,802,950 $739,619 $(1,276,092) $2,892,747
========= ========= ========== ======== =========== ==========

F-40

TOWER AUTOMOTIVE INC.

CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000

NON-
R. J. TOWER PARENT GUARANTOR GUARANTOR
CORPORATION GUARANTOR COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- ---------- --------- ------------ ------------
(AMOUNTS IN THOUSANDS)

Revenues....................... $ 77,723 $ -- $1,911,493 $542,737 $ -- $2,531,953
Cost of sales.................. 47,389 -- 1,627,593 485,377 -- 2,160,359
-------- -------- ---------- -------- -------- ----------
Gross profit.............. 30,334 -- 283,900 57,360 -- 371,594
Selling, general and
administrative expenses...... 5,030 -- 108,636 23,337 -- 137,003
Restructuring and asset
impairment charges........... 12,465 -- 128,861 -- -- 141,326
Amortization expense........... 2,921 1,305 13,210 4,081 -- 21,517
-------- -------- ---------- -------- -------- ----------
Operating income (loss)... 9,918 (1,305) 33,193 29,942 -- 71,748
Interest expense, net.......... 63,795 7,906 (15,044) 8,054 -- 64,711
-------- -------- ---------- -------- -------- ----------
Income (loss) before
provision for income
taxes................... (53,877) (9,211) 48,237 21,888 -- 7,037
Provision (benefit) for income
taxes........................ (21,550) (3,681) 19,289 8,561 -- 2,619
-------- -------- ---------- -------- -------- ----------
Income (loss) before
equity in earnings of
joint ventures and
minority interest....... (32,327) (5,530) 28,948 13,327 -- 4,418
Equity in earnings of joint
ventures and subsidiaries,
net.......................... 64,755 29,440 -- -- (71,715) 22,480
Minority interest, net......... -- (10,476) -- -- -- (10,476)
-------- -------- ---------- -------- -------- ----------
Income before
extraordinary item...... 32,428 13,434 28,948 13,327 (71,715) 16,422
Extraordinary loss on early
extinguishments of debt,
net.......................... 2,988 -- -- -- -- 2,988
-------- -------- ---------- -------- -------- ----------
Net income................ $ 29,440 $ 13,434 $ 28,948 $ 13,327 $(71,715) $ 13,434
======== ======== ========== ======== ======== ==========

F-41

TOWER AUTOMOTIVE INC.

CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2000

OPERATING ACTIVITIES:
Net income.......................... $ 29,440 $ 13,434 $ 28,948 $ 13,327 $(71,715) $ 13,434
Adjustments required to reconcile
net income to net cash provided by
(used in) operating activities
Depreciation and amortization..... 6,426 1,305 115,873 21,201 -- 144,805
Deferred income tax provision
(benefit)....................... (23,335) -- (631) 593 -- (23,373)
Extraordinary loss on
extinguishments of debt......... 2,988 -- -- -- -- 2,988
Equity in earnings of joint
ventures, net................... (22,480) -- -- -- -- (22,480)
Restructuring and asset impairment
charge.......................... 12,465 -- 128,861 -- -- 141,326
Changes in other operating
items........................... (144,253) (381) (184,533) 165,115 -- (164,052)
----------- -------- --------- --------- -------- -----------
Net cash provided by (used in)
operating activities......... (138,749) 14,358 88,518 200,236 (71,715) 92,648
----------- -------- --------- --------- -------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net........... (20,800) -- (85,898) 13,110 -- (93,588)
Acquisitions and other, net......... (164,981) 19,026 (35,082) (119,225) 71,715 (228,547)
Net proceeds from the sale of
Roanoke Heavy Truck Business...... -- -- 55,353 -- -- 55,353
----------- -------- --------- --------- -------- -----------
Net cash provided by (used in)
investing activities......... (185,781) 19,026 (65,627) (106,115) 71,715 (266,782)
----------- -------- --------- --------- -------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings............ 3,304,062 -- 21 68,228 -- 3,372,311
Repayments of debt.................. (3,135,316) -- (21,821) (142,600) -- (3,299,737)
Net proceeds from issuance of senior
Euro notes........................ 134,700 -- -- -- -- 134,700
Net proceeds from the issuance of
common stock...................... -- 6,794 -- -- -- 6,794
Payments for the repurchase of
common shares..................... -- (40,178) -- -- -- (40,178)
----------- -------- --------- --------- -------- -----------
Net cash provided by (used for)
financing activities......... 303,446 (33,384) (21,800) (74,372) -- 173,890
----------- -------- --------- --------- -------- -----------
Net Change in Cash and Cash
Equivalents....................... (21,084) -- 1,091 19,749 -- (244)
Cash and Cash Equivalents, Beginning
of Period......................... 2,312 -- 484 821 -- 3,617
----------- -------- --------- --------- -------- -----------
Cash and Cash Equivalents, End of
Period............................ $ (18,772) $ -- $ 1,575 $ 20,570 $ -- $ 3,373
=========== ======== ========= ========= ======== ===========

F-42

TOWER AUTOMOTIVE INC.

CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999

Revenues........................ $ 79,265 $ -- $1,814,273 $276,465 $ -- $2,170,003
Cost of sales................... 74,401 -- 1,492,879 255,823 -- 1,823,103
-------- -------- ---------- -------- --------- ----------
Gross profit............... 4,864 -- 321,394 20,642 -- 346,900
Selling, general and
administrative expenses....... 6,398 -- 93,370 6,182 -- 105,950
Amortization expense............ 3,075 1,304 10,031 1,393 -- 15,803
-------- -------- ---------- -------- --------- ----------
Operating income (loss).... (4,609) (1,304) 217,993 13,067 -- 225,147
Interest expense, net........... 30,115 9,512 (5,000) 3,354 -- 37,981
-------- -------- ---------- -------- --------- ----------
Income (loss) before
provision for income
taxes.................... (34,724) (10,816) 222,993 9,713 -- 187,166
Provision (benefit) for income
taxes......................... (13,890) (4,327) 89,198 3,885 -- 74,866
-------- -------- ---------- -------- --------- ----------
Income (loss) before equity
in earnings of joint
ventures and minority
interest................. (20,834) (6,489) 133,795 5,828 -- 112,300
Equity in earnings of joint
ventures and subsidiaries,
net........................... 154,891 134,057 -- -- (273,680) 15,268
Minority interest, net.......... -- (10,480) -- -- -- (10,480)
-------- -------- ---------- -------- --------- ----------
Net income................. $134,057 $117,088 $ 133,795 $ 5,828 $(273,680) $ 117,088
======== ======== ========== ======== ========= ==========

F-43

TOWER AUTOMOTIVE INC.

CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999

R. J. TOWER PARENT GUARANTOR NON-GUARANTOR
CORPORATION GUARANTOR COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- --------- ------------- ------------ ------------
(AMOUNTS IN THOUSANDS)

OPERATING ACTIVITIES:
Net income................... $ 134,057 $ 117,088 $ 133,795 $ 5,828 $(273,680) $ 117,088
Adjustments required to
reconcile net income to net
cash provided by (used in)
operating activities
Depreciation and
amortization............ 6,614 1,304 96,613 7,080 -- 111,611
Deferred income tax
provision (benefit)..... 34,894 -- 13,208 (2,574) -- 45,528
Equity in earnings of joint
ventures, net........... (15,268) -- -- -- -- (15,268)
Changes in other operating
items................... (346,604) 9 297,982 1,657 -- (46,956)
----------- --------- --------- -------- --------- -----------
Net cash provided by
(used in) operating
activities............ (186,307) 118,401 541,598 11,991 (273,680) 212,003
----------- --------- --------- -------- --------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net.... (5,338) -- (192,835) 858 -- (197,315)
Acquisitions and other,
net........................ (172,008) (123,037) (347,416) (20,475) 273,680 (389,256)
Change in restricted cash.... 2,677 -- -- -- -- 2,677
----------- --------- --------- -------- --------- -----------
Net cash provided by
(used in) investing
activities............ (174,669) (123,037) (540,251) (19,617) 273,680 (583,894)
----------- --------- --------- -------- --------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings..... 2,168,000 -- 6,632 34,035 -- 2,208,667
Repayments of debt........... (1,805,397) -- (7,418) (28,414) -- (1,841,229)
Net proceeds from the
issuance of common stock... -- 4,636 -- -- -- 4,636
----------- --------- --------- -------- --------- -----------
Net cash provided by
(used for) financing
activities............ 362,603 4,636 (786) 5,621 -- 372,074
----------- --------- --------- -------- --------- -----------
Net Change in Cash and Cash
Equivalents................ 1,627 -- 561 (2,005) -- 183
Cash and Cash Equivalents,
Beginning of Period........ 685 -- (77) 2,826 -- 3,434
----------- --------- --------- -------- --------- -----------
Cash and Cash Equivalents,
End of Period.............. $ 2,312 $ -- $ 484 $ 821 $ -- $ 3,617
=========== ========= ========= ======== ========= ===========

F-44

[GLOBAL MAP SHOWING LOCATION OF TOWER AUTOMOTIVE'S FACILITIES]

[TOWER AUTOMOTIVE LOGO]

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is a statement of expenses, to be paid solely by Tower
Automotive, Inc., of the issuance and distribution of the securities being
registered hereby. All amounts are estimated except the SEC registration fee and
the New York Stock Exchange listing fee:

Securities and Exchange Commission registration fee......... $ 20,615
New York Stock Exchange listing fee......................... 93,300
Blue Sky fees and expenses (including attorneys' fees and
expenses)................................................. --
Printing expenses........................................... 200,000
Accounting fees and expenses................................ 150,000
Legal fees and expenses..................................... 250,000
Miscellaneous expenses...................................... 286,085
----------
Total.................................................. $1,000,000
==========

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

GENERAL CORPORATION LAW

Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Statute") provides that a Delaware corporation may indemnify any
persons who are, or are threatened to be made, parties to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding"), other than an action by or in
the right of such corporation, by reason of the fact that such person is or was
an officer, director, employee or agent of such corporation, or is or was
serving at the request of such corporation as a director, officer, employee or
agent of another corporation or enterprise (an "indemnified capacity"). The
indemnity may include expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was illegal.
Similar provisions apply to actions brought by or in the right of the
corporation, except that no indemnification shall be made without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses which such officer or director has actually and reasonably
incurred. Section 145 of the Delaware Statute further authorizes a corporation
to purchase and maintain insurance on behalf of any indemnified person against
any liability asserted against him and incurred by him in any indemnified
capacity, or arising out of his status as such, regardless of whether the
corporation would otherwise have the power to indemnify him under the Delaware
Statute.

The certificate of incorporation of Tower Automotive, Inc. ("Issuer")
provides that each person who was or is made a party or is threatened to be made
a party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
or she is or was a director or officer of Issuer or is or was serving at the
request of Issuer as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, whether the basis of
such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a director,
officer, employee or agent, shall be indemnified and held harmless by Issuer to
the fullest extent authorized by the Delaware Statute, as the same exists or may
thereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits Issuer to provide broader indemnification
rights than permitted prior thereto), against all expense, liability and loss
(including attorney's fees, judgments, fines,

II-1

ERISA excise taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; provided, however, that except
as otherwise provided in the certificate of incorporation, with respect to
proceedings to enforce rights to indemnification, the Issuer shall indemnify any
such indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by the
board of directors of Issuer. The right to indemnification conferred in the
certificate of incorporation is a contract right and includes the right to be
paid by Issuer the expenses incurred in defending any such proceeding in advance
of its final disposition; provided, however, that, if the Delaware Statute
requires, an advancement of expenses incurred by an indemnitee in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to Issuer
of an undertaking, by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses. If a claim under the certificate of
incorporation is not paid in full by Issuer within sixty days after a written
claim has been received by Issuer, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be twenty
days, the indemnitee may at any time thereafter bring suit against Issuer to
recover the unpaid amount of the claim.

The certificates of incorporation of the Issuer provides that, to the
fullest extent permitted by the Delaware Statute, no director of the corporation
shall be personally liable to the corporation or its stockholders for monetary
damages for a breach of fiduciary duty as a director.

ITEM 16. EXHIBITS.

The attached Exhibit Index is incorporated herein by reference.

ITEM 17. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.

II-2

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, on April 29, 2002.

TOWER AUTOMOTIVE, INC.

By: /s/ ANTHONY A. BARONE

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

Anthony A. Barone

Vice President and Chief Financial
Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement on Form S-3 has been signed by the following
persons in the capacities and on the dates indicated:

SIGNATURES CAPACITY DATES
---------- -------- -----

* Chairman and Director April 29, 2002
------------------------------------------
S.A. Johnson

/s/ DUGALD K. CAMPBELL President, Chief Executive Officer April 29, 2002
------------------------------------------ (Principal Executive Officer) and
Dugald K. Campbell Director

* Director April 29, 2002
------------------------------------------
James R. Lozelle

* Director April 29, 2002
------------------------------------------
Scott D. Rued

* Director April 29, 2002
------------------------------------------
F.J. Loughrey

* Director April 29, 2002
------------------------------------------
Enrique Zambrano

* Director April 29, 2002
------------------------------------------
Jurgen M. Geissinger

* Director April 29, 2002
------------------------------------------
Ali Jenab

Director April 29, 2002
------------------------------------------
Georgia Nelson

/s/ ANTHONY A. BARONE Vice President and Chief April 29, 2002
------------------------------------------ Financial Officer (Principal
Anthony A. Barone Accounting Officer)

II-4

* The undersigned, by signing his name hereto, does execute this Amendment No.
2 to Registration Statement on Form S-3 on behalf of the above-named officers
and/or directors of the registrant pursuant to the Power of Attorney executed
by such officers and/or directors on the signature pages to the Registration
Statement previously filed on April 3, 2002.

*By: /s/ ANTHONY A. BARONE
--------------------------------------------------------
Anthony A. Barone
Attorney-In-Fact

II-5

EXHIBIT INDEX

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

1.1 Form of Underwriting Agreement (previously filed)
3.1 Amended and Restated Certificate of Incorporation of Tower
Automotive, Inc., as Amended by the Certificate of Amendment
to Certificate of Incorporation, dated June 2, 1997(1)
3.2 Amended and Restated By-laws of Tower Automotive, Inc.(2)
4.1 Form of Common Stock Certificate(3)
5.1 Opinion of Kirkland & Ellis
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Kirkland & Ellis (Included in Exhibit 5.1)
24.1 Powers of Attorney (Included in Part II to the Registration
Statement, previously filed)

------------
(1) Incorporated by reference to exhibit 4.2 of the registrant's Registration
Statement on Form S-3 (Registration No. 333-38827).

(2) Incorporated by reference to exhibit 3.2 of the registrant's Registration
Statement on Form S-1 (Registration No. 33-80320).

(3) Incorporated by reference to exhibit 4.1 of the registrant's Registration
Statement on Form S-3 (Registration No. 333-38827).