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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

For the fiscal year ended January 31, 2002

Commission file number: 1-11592

Hayes Lemmerz International, Inc.

Registrant’s telephone number, including area code:

Securities Registered Pursuant to Section 12(b) of the Act:

Common Stock, par value $.01 per share

Securities Registered Pursuant to Section 12(g) of the Act:

11% Senior Subordinated Notes Due 2006

9 1/8% Series B Senior Subordinated Notes Due 2007

8 1/4% Series B Senior Subordinated Notes Due 2008

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

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

      The aggregate market value of voting stock held by non-affiliates of the registrant as of April 26, 2002 (based on the closing price of the registrant’s Common Stock reported on the over-the-counter market on such date) was approximately $1.1 million.

      The number of shares of Common Stock outstanding as of April 26, 2002 was 28,455,995 shares.

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HAYES LEMMERZ INTERNATIONAL, INC.

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      THIS ANNUAL REPORT ON FORM 10-K CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF THE COMPANY, INCLUDING STATEMENTS UNDER THE CAPTIONS “BUSINESS” AND “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.” THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH MATTERS WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) THE OUTCOME AND CONSEQUENCES OF THE COMPANY’S CHAPTER 11 PROCEEDINGS; (2) COMPETITIVE PRESSURE IN THE COMPANY’S INDUSTRY INCREASES SIGNIFICANTLY; (3) GENERAL ECONOMIC CONDITIONS ARE LESS FAVORABLE THAN EXPECTED; (4) THE COMPANY’S DEPENDENCE ON THE AUTOMOTIVE AND COMMERCIAL HIGHWAY INDUSTRIES (WHICH HAVE HISTORICALLY BEEN CYCLICAL); (5) CHANGES IN THE FINANCIAL MARKETS AFFECTING THE COMPANY’S FINANCIAL STRUCTURE AND THE COMPANY’S COST OF CAPITAL AND BORROWED MONEY; AND (6) THE UNCERTAINTIES INHERENT IN INTERNATIONAL OPERATIONS AND FOREIGN CURRENCY FLUCTUATIONS. THE COMPANY HAS NO DUTY UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 TO UPDATE THE FORWARD LOOKING STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-K AND THE COMPANY DOES NOT INTEND TO PROVIDE SUCH UPDATES.

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PART I

Item 1.     Business

General

      Unless otherwise indicated, references to “Company” mean Hayes Lemmerz International, Inc. and its subsidiaries and references to fiscal year means the Company’s year ended January 31 of the following year (e.g., “fiscal 2001” refers to the period beginning February 1, 2001 and ending January 31, 2002, “fiscal 2000” refers to the period beginning February 1, 2000 and ending January 31, 2001 and “fiscal 1999” refers to the period beginning February 1, 1999 and ending January 31, 2000).

Recent Developments

      On December 5, 2001, Hayes Lemmerz International, Inc., 30 of its wholly-owned domestic subsidiaries and one wholly-owned Mexican subsidiary (collectively, the “Debtors”) filed voluntary petitions for reorganization relief (the “Chapter 11 Filings” or the “Filings”) under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Chapter 11 Filings are being jointly administered, for procedural purposes only, before the Bankruptcy Court under Case No. 01-11490-MFW.

      During the pendency of these Filings, the Debtors remain in possession of their properties and assets and management of the Company continues to operate the businesses of the Debtors as debtors-in-possession. As a debtor-in-possession, the Company is authorized to operate the business of the Debtors, but may not engage in transactions outside of the ordinary course of business without the approval of the Bankruptcy Court, after notice and the opportunity for a hearing.

      Pursuant to the automatic stay provisions of Section 362 of the Bankruptcy Code, actions to collect pre-petition indebtedness and virtually all litigation against the Debtors that was, or could have been, brought prior to the commencement of the Chapter 11 Filings are stayed, and other contractual obligations of the Debtors may not be enforced against them. Parties with claims against the Debtors may file proofs of claim with the Bankruptcy Court in accordance with the reorganization process. Proofs of claim generally must be filed with the Bankruptcy Court by June 3, 2002, which is the general claims bar date established by the Bankruptcy Court in the Debtors’ cases.

      The consummation of a plan or plans of reorganization confirmed by the Bankruptcy Court is the principal objective of the Chapter 11 Filings. A plan of reorganization sets forth the means for satisfying claims against and interests in the Company and its Debtor subsidiaries. Generally, pre-petition liabilities are subject to settlement under such a plan or plans of reorganization, which must be voted upon by certain creditors and approved by the Bankruptcy Court. There can be no assurance that a reorganization plan or plans will be proposed by the Debtors or confirmed by the Bankruptcy Court, or that any such plan or plans will be consummated.

      Currently, it is not possible to predict the length of time the Company will operate under the protection of Chapter 11 and the supervision of the Bankruptcy Court, when the Company will file a plan or plans of reorganization with the Bankruptcy Court, the outcome of the Chapter 11 proceedings in general, or the effect of the proceedings on the business of the Company or on the interest of the various creditors and stakeholders. Under the priority scheme established by the Bankruptcy Code, certain post-petition liabilities and pre-petition liabilities need to be satisfied before shareholders can receive any distribution. The ultimate recovery, if any, to shareholders will not be determined until confirmation of a plan or plans of reorganization. There can be no assurance as to what value, if any, will be ascribed to the common stock of the Company in the bankruptcy proceedings, and the value of the equity represented by that stock could be substantially diluted or canceled.

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Business Overview

      The Company was founded in 1908. From 1908 through 1992, the Company’s operations were predominately in the automotive wheel, brake and commercial highway businesses. In 1992, the non-wheel businesses and assets of the Company, particularly its automotive brake systems business and assets, were transferred to, and certain liabilities related thereto were assumed by, a wholly owned subsidiary of the Company, Kelsey-Hayes Company (“Kelsey-Hayes”), the capital stock of which was then transferred by the Company to its sole stockholder as an extraordinary dividend and the Company consummated an initial public offering of its common stock. Since 1992, the Company’s operations have been diversified through acquisitions and internal growth.

      The Company has made three major acquisitions since 1992. On July 2, 1996, the Company consummated a series of transactions pursuant to which Motor Wheel Corporation (“Motor Wheel”) became a wholly owned subsidiary of the Company. On June 30, 1997, the Company acquired Lemmerz Holding GmbH (“Lemmerz”) (the “Lemmerz Acquisition”). Lemmerz was founded in 1919 and was a leading wheel supplier in Europe. On February 3, 1999, the Company acquired CMI International, Inc. (“CMI”). CMI was a leading full service supplier of wheel-end attachments, aluminum structural components and powertrain components to the automotive industry.

      The Company is a leading supplier of wheels, wheel-end attachments, aluminum structural components and automotive brake components. The Company is the world’s largest manufacturer of automotive wheels. In addition, the Company also designs and manufactures wheels and brake components for commercial highway vehicles, and powertrain components and aluminum non-structural components for the automotive, commercial highway, heating and general equipment industries. Approximately 54% of the Company’s fiscal 2001 total sales consisted of sales to General Motors, Ford and DaimlerChrysler on a worldwide basis.

Financial Information About Business Segments

      Note 17, “Segment Reporting” to the accompanying Consolidated Financial Statements is incorporated herein by reference.

Products and Services

      The Company currently conducts business in three operating segments: Automotive Wheels, Components and Other. The Automotive Wheels Segment includes a wide range of wheels for passenger cars and light trucks. The Company designs and manufactures steel and aluminum wheels using casting, stamping, fabricating and other manufacturing processes. Aluminum wheels are generally lighter in weight, more readily stylized and more expensive than steel wheels. The principal markets for the Automotive Wheels Segment include North America, Europe, South America and Asia. Substantially all of the sales in this segment are made directly to Original Equipment Manufacturers (“OEMs”).

      The Components Segment includes wheel-end attachments, such as steering knuckles, spindles, hub carriers and suspension arms; aluminum structural components, such as crossmembers, subframes and engine cradles and axle assemblies; and automotive brake components, consisting primarily of composite metal drums, full cast drums and cast iron hubs for drum-type brakes and cast iron rotors for disc brakes. The Components Segment also includes powertrain and engine components, such as aluminum and polymer intake manifolds, aluminum cylinder heads, water pumps, brackets and ductile iron exhaust manifolds. North America is the principal market for the Components Segment. Substantially all of the sales in this segment are made directly to OEMs. The Components Segment also includes three non-core aluminum operations, collectively called Metaalgieterij Giesen B.V. (“MGG”). MGG produces heat exchangers used in gas-fired boilers, aluminum housings for automotive and heavy truck applications, a variety of aluminum products for the general machinery and electronics industries, and specialized manufacturing equipment for foundry facilities.

      The Other Segment includes commercial highway vehicle wheels, rims and brake products sold by the Company to truck manufacturers (including replacement parts sold through original equipment servicers) and

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Material Source and Supply

      Most of the raw materials (such as steel and aluminum) and semi-processed or finished items (such as castings) used in the Company’s products are purchased from suppliers located within the geographic regions of the Company’s operating units. In many cases, these materials are available from several qualified sources in quantities sufficient for the Company’s needs. However, shortages of a particular material or part occasionally occur. In addition, the Debtors’ Chapter 11 Filing, import tariffs imposed on steel and volatility among the Company’s vendors may affect the overall availability of materials, and may be a risk factor for the Company’s operations.

      To minimize materials issues, the Company has taken steps to centralize and strengthen its materials and logistics function. In addition, the Company has developed multi-tiered materials sourcing strategies to cover extended time periods and new supply chain relationships.

Intellectual Property

      The Company owns significant intellectual property, including numerous U.S. and foreign patents, trade secrets, trademarks and copyrights. While the Company’s intellectual property is important to its business operations and in the aggregate constitutes a valuable asset, the Company does not believe that any single patent, trade secret, trademark or copyright, or group of patents, trade secrets, trademarks or copyrights is critical to the success of the business. The Company’s policy is to seek statutory protection for all significant intellectual property embodied in patents, trademarks and copyrights. The Company, from time to time, grants licenses under its patents and technology and receives licenses under patents and technology of others.

Seasonality

      While the Company’s business is not seasonal in the traditional sense, July (in North America), August (in Europe) and December are usually lower volume months. This is because OEMs typically perform model changeovers or take vacation shutdowns during the summer and assembly plants are typically closed for a period from shortly before the year end holiday season until after New Year’s Day.

Customer Dependence

      In fiscal 2001, the Company’s principal customers were General Motors, Ford (including wholly-owned Volvo), DaimlerChrysler (the three of which comprised approximately 54% of the Company’s fiscal 2001 net sales on a worldwide basis), BMW, Volkswagen, Nissan and Honda. Other customers include Toyota, Isuzu, Renault, Fiat, Porsche, Audi, Citroën, Peugeot, Skoda, Mazda, Mitsubishi and Suzuki. The Company also sells some of its components to other Tier I automotive suppliers such as Bosch, Continental Teves, Delphi, TRW and Visteon. In fiscal 2001, the Company also had over 300 commercial highway vehicle customers in North America, Europe and Asia, including Trailmobile, Dana/ Mack, DaimlerChrysler, Iveco, Strick, Great Dane Trailers, Freightliner, PACCAR, Volvo, General Motors, Renault, Western Star, Schmitz Cargobull and Köegal.

      The loss of a significant portion of the Company’s sales to any of its principal customers could have a material adverse impact on the Company. The Company has been doing business with each of its principal customers for many years, and sales are composed of a number of different products and of different models or types of the same products and are made to individual divisions of such customers. In addition, the Company supplies products to many of these customers in both North America and Europe, which reduces the Company’s reliance on any single market.

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Backlog

      Generally, the Company’s products are not on a backlog status. These products are produced from readily available materials, have a relatively short manufacturing cycle and have short customer lead times. Each operating unit maintains its own inventories and production schedules.

Competition

      The major domestic and foreign markets for the Company’s products are highly competitive. Competition is based primarily on price, technology, quality, delivery and overall customer service. The Company’s customers have shifted research and development, design and validation responsibilities to their key suppliers, focusing on stronger relationships with fewer suppliers. The Company’s global competitors include a large number of other well-established suppliers. Competitors typically vary among each of the Company’s products and geographic markets.

Research and Development

      The Company’s objective is to be a leader in offering superior quality and technologically advanced products to its customers at competitive prices. The Company engages in ongoing engineering, research and development activities to improve the reliability, performance and cost-effectiveness of its existing products and to design and develop new products for existing and new applications. The Company’s spending on engineering, research and development programs was $10.5 million in fiscal 2001, $14.3 million in fiscal 2000 and $14.1 million in fiscal 1999.

Investments

      The Company owns minority interests in certain entities as detailed below:

      In addition, the Company has technical assistance agreements with ATP, a wheel manufacturer in Thailand, and Colombiana de Frenos S.A., a steel and aluminum wheel manufacturer in Colombia.

Environmental Compliance

      The Company, like most other manufacturing companies, is subject to and is required from time to time to take action at its facilities to comply with federal, state, local and foreign laws and regulations relating to pollution control and protection of the environment. In this regard, the Company maintains an ongoing compliance program to anticipate and, if necessary, correct environmental problems. The Company periodically incurs capital expenditures in order to upgrade its pollution control mechanisms and to comply with applicable laws. The Company has 23 facilities registered or recommended for registration under ISO 14001 and is working to obtain ISO 14001 Registration at all manufacturing facilities worldwide. The Company believes it is in material compliance with applicable federal, state, local and foreign laws and regulations relating to pollution control and protection of the environment. See “Item 3. Legal Proceedings.”

Employees

      At April 15, 2002, the Company had approximately 12,000 employees. Of the Company’s employees in the United States, approximately 6% were represented by the UAW or USW. Collective bargaining

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International Operations

      The Company has its world headquarters in Northville, Michigan. The Company has a worldwide network of 42 facilities (including three joint venture facilities) in the United States, Germany, Italy, Spain, the Netherlands, Belgium, the Czech Republic, Turkey, Brazil, South Africa, Mexico, Thailand and India. The Company also provides sales, engineering and customer service throughout the world. The Company has advanced research and development facilities in the United States, Germany, Belgium, Italy and Brazil and a sales and engineering office in Japan.

Financial Information About Geographic Areas

      Note 17, “Segment Reporting” to the accompanying consolidated financial statements is incorporated herein by reference.

Item 2.     Properties

      The Company has its world headquarters in Northville, Michigan. The Company operates 26 facilities in North America with approximately 4.8 million square feet in the aggregate. Within Europe, the Company operates 20 manufacturing facilities with approximately 6.0 million square feet in the aggregate. In South America, Asia and South Africa, the Company operates 5 manufacturing facilities with approximately 2.0 million square feet in the aggregate. The Company believes that its plants were adequate and suitable for the manufacturing of products for the markets in which it sells.

Item 3.     Legal Proceedings

      On December 5, 2001, the Debtors filed voluntary petitions for reorganization relief under Chapter 11 of the Bankruptcy Code. These petitions were filed in the United States Bankruptcy Court for the District of Delaware, Case No. 01-11490-MFW. Management of the Company continues to operate the business of the Debtors as debtors-in-possession under Sections 1107 and 1108 of the Bankruptcy Code. In this proceeding, the Debtors intend to propose and seek confirmation of a plan or plans or reorganization. Unless lifted by the order of the Bankruptcy Court, pursuant to the automatic stay provision of the Bankruptcy Code, all pending pre-petition litigation against the Debtors is currently stayed.

      Following the announcements by the Company in September 2001 and December 2001 to restate its financial statements for fiscal years 1999 and 2000 and the first quarter of fiscal year 2001, several lawsuits were filed by and purportedly on behalf of the shareholders of the Company naming as defendants a combination of the Company, Ranko “Ron” Cucuz, former Chief Executive Officer and Chairman of the Company and William D. Shovers, former Chief Financial Officer of the Company. These lawsuits are seeking class action status, but no class has yet been certified in these actions. Due to the Company’s bankruptcy filing, this litigation against the Company is subject to the automatic stay.

      In the ordinary course of its business, the Company is a party to other judicial and administrative proceedings involving its operations and products, which may include allegations as to manufacturing quality, design and safety. After reviewing the proceedings that are currently pending (including the probable outcomes, reasonably anticipated costs and expenses, availability and limits of insurance rights under indemnification agreements and established reserves for uninsured liabilities), management believes that the outcome of these proceedings will not have a material adverse effect on the financial condition or ongoing results of operations of the Company.

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      Under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”), the Company currently has potential environmental liability arising out of both its wheel and non-wheel businesses at 17 Superfund sites (the “Sites”). Five of the Sites were related to the operations of Motor Wheel prior to the divestiture of that business by The Goodyear Tire & Rubber Co. (“Goodyear”). In connection with the 1986 purchase of Motor Wheel by MWC Holdings, Inc. (“Holdings”), Goodyear agreed to retain all liabilities relating to these Sites and to indemnify and hold Holdings harmless with respect thereto. Goodyear has acknowledged this responsibility and is presently representing the interests of the Company with respect to all matters relating to these five Sites.

      As a result of activities which took place at the Company’s Howell, Michigan facility prior to its acquisition by the Company, the State of Michigan is performing, under CERCLA, a remedial investigation/feasibility study of PCB contamination at this Site, and in the adjacent South Branch of the Shiawasee River. Under the terms of a consent judgment entered into in 1981 by Cast Forge, Inc. (“Cast Forge”) (the previous owner of this Site) and the State of Michigan, any additional PCB cleanup which may be required is the financial responsibility of the State of Michigan, and not of Cast Forge or its successors or assigns (including the Company). The federal Environmental Protection Agency (the “EPA”) has concurred in the consent judgment.

      The Company is working with various government agencies and the other parties identified by the applicable agency as “potentially responsible parties” to resolve its liability with respect to seven Sites. The Company’s potential liability at each of these Sites is not currently anticipated to be material.

      The Company has potential environmental liability at the four remaining Sites arising out of businesses presently operated by Kelsey-Hayes. Kelsey-Hayes has assumed and agreed to indemnify the Company with respect to any liabilities associated with these Sites. Kelsey-Hayes has acknowledged this responsibility and is presently representing the interests of the Company with respect to these sites.

      Kelsey-Hayes, and in certain cases the Company, may remain liable with respect to environmental cleanup costs in connection with certain divested businesses, relating to aerospace, heavy-duty truck components and farm implements, under Federal and state laws and under agreements with purchasers of these divested businesses. The Company believes, however, that such costs in the aggregate will not have a material adverse effect on the consolidated operations or financial condition of the Company and, in any event, Kelsey-Hayes has assumed and agreed to indemnify the Company with respect to any liabilities arising out of or associated with these divested businesses.

      In addition to the Sites, the Company also has potential environmental liability at two state-listed sites in Michigan. Of these, one is covered under the indemnification agreement with Goodyear described above. The Company is presently working with the Michigan Department of Environmental Quality to resolve its liability with respect to the remaining state-listed site, for which no significant costs are anticipated.

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

      None.

PART II

Item 5.     Market for Registrant’s Common Equity and Related Stockholder Matters

      The Company had 28,455,995 shares of Common Stock outstanding and 105 record holders as of April 26, 2002. The Company’s shares trade on the over the counter market (“OTC”) under the symbol “HLMMQ”. From December 1997 until December 20, 2001, the Company’s shares were traded on the New

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      The Company has not paid dividends on its Common Stock since fiscal 1996, and does not intend to pay dividends in the foreseeable future.

Item 6.     Selected Financial Data

      The following table sets forth selected consolidated financial data with respect to the Company for the five fiscal years ended January 31, 2002. The information set forth below should be read in conjunction with the Company’s Consolidated Financial Statements and Notes to Consolidated Financial Statements filed herewith, beginning at page F-1.

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(1)	See Note (9) to the Consolidated Financial Statements included herein.
(2)	For the fiscal year ended January 31, 2002, interest expense, net, excludes $18.7 million of interest expense that would have accrued from December 5, 2001 to January 31, 2002 with respect to certain long-term debt classified as liabilities subject to compromise. See Note (10) to the Consolidated Financial Statements included herein.
(3)	See Note (10) to the Consolidated Financial Statements included herein.

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

      The following discussion and analysis should be read in conjunction with the Company’s Consolidated Financial Statements, related notes thereto and the other information included elsewhere herein.

Business and Chapter 11 Filings

      The Company was founded in 1908. From 1908 through 1992, the Company’s operations were predominately in the automotive wheel, brake and commercial highway businesses. In 1992, the non-wheel businesses and assets of the Company, particularly its automotive brake systems business and assets, were transferred to, and certain liabilities related thereto were assumed by, a wholly owned subsidiary of the Company, Kelsey-Hayes Company (“Kelsey-Hayes”), the capital stock of which was then transferred by the Company to its sole stockholder as an extraordinary dividend and the Company consummated an initial public offering of its common stock. Since 1992, the Company’s operations have been diversified through acquisitions and internal growth.

      The Company has made three major acquisitions since 1992. On July 2, 1996, the Company consummated a series of transactions pursuant to which Motor Wheel Corporation (“Motor Wheel”) became a wholly owned subsidiary of the Company. On June 30, 1997, the Company acquired Lemmerz Holding GmbH (“Lemmerz”) (the “Lemmerz Acquisition”). Lemmerz was founded in 1919 and was the leading full-line wheel supplier in Europe. On February 3, 1999, the Company acquired CMI International, Inc. (“CMI”). CMI was a leading full service supplier of wheel-end attachments, aluminum structural components and powertrain components to the automotive industry.

      The Company is a leading supplier of wheels, wheel-end attachments, aluminum structural components and automotive brake components. The Company is the world’s largest manufacturer of automotive wheels. In addition, the Company also designs and manufactures wheels and brake components for commercial highway vehicles, and powertrain components and aluminum non-structural components for the automotive, commercial highway, heating and general equipment industries. Approximately 54% of the Company’s fiscal 2001 total sales consisted of sales to General Motors, Ford and DaimlerChrysler on a worldwide basis.

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      On December 5, 2001, the Debtors filed voluntary petitions for reorganization relief under Chapter 11 of the Bankruptcy Code. The Chapter 11 Filings are being jointly administered, for procedural purposes only, before the Bankruptcy Court under Case No. 01-11490-MFW.

      During the pendency of these Filings, the Debtors remain in possession of their properties and assets and management of the Company continues to operate the businesses of the Debtors as debtors-in-possession. As a debtor-in-possession, the Company is authorized to operate the business of the Debtors, but may not engage in transactions outside of the ordinary course of business without the approval of the Bankruptcy Court, after notice and the opportunity for a hearing.

      The Bankruptcy Court has approved payment of certain of the Debtors’ pre-petition liabilities, such as employee wages, benefits, and certain customer, vendor and freight program related payments. In addition, the Bankruptcy Court authorized the Debtors to continue and maintain the majority of their employee benefit programs. Pension and savings plan funds are in trusts and protected under federal regulations. All required contributions are current in the respective plans. The Debtors have received Bankruptcy Court approval for the retention of legal, financial and management consulting professionals, and from time to time may seek Bankruptcy Court approval for the retention of additional financial and management consulting professionals, to advise the Debtors in the bankruptcy proceedings and the restructuring of its businesses.

      Pursuant to the automatic stay provisions of Section 362 of the Bankruptcy Code, actions to collect pre-petition indebtedness and virtually all litigation against the Debtors that was, or could have been, brought prior to the commencement of the Chapter 11 Filings are stayed, and other contractual obligations of the Debtors may not be enforced against them. In addition, under Section 365 of the Bankruptcy Code, subject to the approval of the Bankruptcy Court, the Debtors may assume or reject executory contracts and unexpired leases. As of the date of this filing, the Debtors had not yet completed their review of all contracts and leases for assumption or rejection, but ultimately will assume or reject all such contracts and leases. The Debtors cannot presently determine or reasonably predict the ultimate liability that may result from rejecting such contracts or leases or from the filing of rejection damage claims, but such rejections could result in additional liabilities subject to compromise.

      Parties with claims against the Debtors, including, among other things, claims for damages resulting from the rejection of executory contracts or unexpired leases, may file proofs of claim with the Bankruptcy Court in accordance with the reorganization process. Proofs of claims generally must be filed with the Bankruptcy Court by the later of (a) June 3, 2002, which is the general claims bar date established by the Bankruptcy Court in the Debtors’ cases, or (b) the date that is thirty days after entry of an order approving the rejection.

      All liabilities subject to compromise are subject to future adjustment depending on Bankruptcy Court action, further developments with respect to disputed claims, or other events. Under a confirmed plan of reorganization, most all unsecured pre-petition claims may be paid at amounts substantially less than their allowed amounts. In light of the number of creditors of the Debtors, the claims resolution process may take considerable time to complete. Accordingly, the ultimate number and amount of allowed claims is not presently known and, because the settlement terms of such allowed claims is subject to a confirmed plan of reorganization, the ultimate resolution with respect to allowed claims is not presently ascertainable. The issue of substantive consolidation of the Debtors has not been addressed. Unless Debtors are substantively consolidated under a confirmed plan of reorganization, payment of prepetition claims of each Debtor may substantially differ from payment of prepetition claims of other Debtors.

      The consummation of a plan or plans of reorganization is the principal objective of the Chapter 11 Filings. A plan of reorganization sets forth the means for satisfying claims against and interests in the Debtors, including the liabilities subject to compromise. Generally, pre-petition liabilities are subject to settlement under such a plan or plans of reorganization, which must be voted upon by certain creditors and approved by the Bankruptcy Court. Pursuant to an Order of the Bankruptcy Court in the Debtors’ cases, the Debtors have the exclusive right through September 3, 2002 to submit a plan or plans of reorganization. Such exclusive period may be lengthened (or shortened) by Bankruptcy Court order pursuant to the request of the Debtors or

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      Confirmation of a plan of reorganization is subject to certain findings being made by the Bankruptcy Court, all of which are required by the Bankruptcy Code. Subject to certain exceptions set forth in the Bankruptcy Code, confirmation of a plan of reorganization requires the approval of the Bankruptcy Court and the affirmative vote of each impaired class of creditors and equity security holders. The Bankruptcy Court may confirm a plan notwithstanding the non-acceptance of the plan by an impaired class of creditors or equity security holders if certain requirements of the Bankruptcy Code are met. There can be no assurance that a reorganization plan or plans will be proposed by the Debtors or confirmed by the Bankruptcy Court, or that any such plan or plans will be consummated.

      Currently, it is not possible to predict the length of time the Company will operate under the protection of Chapter 11 and the supervision of the Bankruptcy Court, when the Company will file a plan or plans of reorganization with the Bankruptcy Court, the outcome of the Chapter 11 proceedings in general, or the effect of the proceedings on the business of the Company or on the interest of the various creditors and stakeholders. Under the priority scheme established by the Bankruptcy Code, certain post-petition liabilities and pre-petition liabilities need to be satisfied before shareholders can receive any distribution. The ultimate recovery, if any, to shareholders will not be determined until confirmation of a plan or plans of reorganization. There can be no assurance as to what value, if any, will be ascribed to the common stock of the Company in the bankruptcy proceedings, and the value of the equity represented by that stock could be substantially diluted or canceled.

      Reorganization items as reported in the fiscal 2001 consolidated statement of operations included herein are comprised of income, expense and loss items that were realized or incurred by the Debtors as a direct result of the Company’s decision to reorganize under Chapter 11. During fiscal 2001, reorganization items were as follows (millions of dollars):

      The net cash payments made during fiscal 2001 with respect to the reorganization items listed above were $5.3 million.

Recent Developments

      In February 2002, the Company committed to a plan to close its manufacturing facility in Somerset, Kentucky. The Company recorded asset impairment losses with respect to this facility of $5.1 million in the fourth quarter of fiscal 2001. In connection with the closure of the Somerset facility (which commenced during February 2002), the Company will record an estimated restructuring charge of $7.3 million in the first quarter of fiscal 2002. This charge relates to the termination of leases and other closure costs, including security and maintenance costs subsequent to the shutdown date, and is expected to be paid during fiscal 2002 and 2003.

      In March 2002, the Company purchased the facility and assets of a foundry in Chattanooga, Tennessee for $4.1 million. This purchase integrates the foundry, which produces brake drum castings for the Company, into the Company’s commercial highway operations.

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      On March 9, 2002, the Jobs Creation and Worker Assistance Act of 2002 was signed into law. Among other provisions, the law permits a five-year carryback for tax losses generated in tax years ending in 2001 and 2002. As a result of this tax law change, the Company is entitled to file a claim for a refund of federal income taxes. The availability of the loss carryback and the estimated amount of federal income tax refundable will be recorded in the first quarter of fiscal 2002 based upon the enactment date of this law.

Results of Operations

      Sales of the Company’s wheels, wheel-end attachments, aluminum structural components and brake components produced in North America are directly affected by the overall level of passenger car, light truck and commercial highway vehicle production of North American OEMs, while sales of its wheels and automotive castings in Europe are directly affected by the overall vehicle production in Europe. The North American and European automotive industries are sensitive to the overall strength of their respective economies.

      The Company is organized based primarily on markets served and products produced. Under this organization structure, the Company’s operating segments have been aggregated into three reportable segments: Automotive Wheels, Components and Other. The Automotive Wheels segment includes results from the Company’s operations that primarily design and manufacture fabricated steel and cast aluminum wheels for original equipment manufacturers in the global passenger car and light vehicle markets. The Components segment includes results from the Company’s operations that primarily design and manufacture suspension, brake and powertrain components for original equipment manufacturers in the global passenger car and light vehicle markets. The Other segment includes results from the Company’s operations that primarily design and manufacture wheel and brake products for commercial highway and aftermarket customers in North America. The Other segment also includes financial results related to the Company’s tire and wheel operations in Europe, the corporate office and elimination of certain intercompany activities.

      The Company’s net sales for fiscal 2001 were $2,039.1 million, a decrease of 6.0% as compared to net sales of $2,168.2 million in fiscal 2000. This decrease is primarily due to the impact of lower sales to light vehicle OEMs and heavy-duty vehicle manufacturers in North America and the build-out and termination of certain OEM platforms on the Company’s North American operations.

      Net sales from the Company’s Automotive Wheels segment decreased 8.9% from $1,353.1 million in fiscal 2000 to $1,232.8 million in fiscal 2001. This was primarily due to a $107.4 million decrease in sales from the Company’s North American operations arising from lower OEM production levels and lower market share in 2001 compared to 2000. Sales from the Company’s European operations decreased by $12.9 million, net of the effect of an approximate $41.7 million decrease in the average value of European currencies relative to the U.S. dollar. Of the net decrease, sales for the Company’s European fabricated wheels business unit decreased by $48.3 million, primarily due to increasing penetration rates of aluminum wheels in the European light vehicle market. Sales for the Company’s European aluminum wheels business unit partially offset this decrease, increasing by $35.4 million primarily due to higher customer production requirements and higher penetration rates.

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      Components net sales were slightly higher in fiscal 2001 compared to fiscal 2000, net of the effect of an approximate $3.9 million decrease in the average value of European currencies relative to the U.S. dollar. The impact of lower OEM production levels and the build-out and termination of certain customer platforms reduced net sales from the Company’s North American operations. This reduction was offset by the increase in net sales arising from the Schenk acquisition in September 2000, and higher net sales from the Company’s MGG operations in Europe.

      Other net sales decreased 9.5% from $163.9 million in fiscal 2000 to $148.4 million in 2001. This decrease is primarily due to the significant decrease in heavy duty Class 8 truck and trailer production in North America between those time periods. This decrease was partially offset by higher sales from the Company’s system service business in Europe.

      The Company’s gross profit margin for fiscal 2001 decreased by $124.9 million, to $131.7 million or 6.5% of net sales, as compared to $256.6 million or 11.8% of net sales for fiscal 2000.

      The Company’s gross profit from Automotive Wheels decreased $93.0 million from fiscal 2000 to fiscal 2001. Gross profit from the Company’s North American operations decreased $86.3 million from fiscal 2000 compared to fiscal 2001. This decrease is primarily due to recurring manufacturing difficulties at the Company’s Somerset, Kentucky facility and lower operating performance at various other facilities in North America, which reduced gross profit by approximately $25.1 million and $53.3 million, respectively. Lower OEM production requirements in North America reduced gross profit by approximately $7.9 million. Gross profit from the Company’s European fabricated wheel operations decreased by $20.4 million. Of this decrease, lower operating performance at various foreign fabricated wheel operations and lower OEM customer production requirements represented approximately $11.7 million and $8.7 million, respectively. These decreases were partially offset by a $13.7 million increase in gross profit from the Company’s foreign aluminum wheel operations.

      Gross profit from Components decreased $29.0 million from fiscal 2000 to fiscal 2001. This decrease is primarily due to lower operating performance, lower OEM production requirements and the inefficiencies arising from lower production in the North American operations.

      Other gross profit decreased $2.8 million from fiscal 2000 to fiscal 2001. This decrease is primarily due to lower sales and lower operating margins in the commercial highway market partially offset by higher gross profit from the Company’s Systems Service business in Europe.

      Marketing, general and administrative expenses were unchanged from fiscal 2000 to 2001. Increased provisions for past due accounts receivable in the Company’s North American operations and higher spending in the Company’s European wheel operations was offset by lower spending at certain other locations.

      Engineering and product development expenses increased from $16.6 million or 0.8% of net sales in fiscal 2000 to $21.8 million or 1.1% of net sales in fiscal 2001. Lower engineering and product development spending, net of customer recoveries, in the Company’s wheel operations in fiscal 2000 is the primary reason for this variance.

      Equity in losses of joint ventures decreased $3.5 million to $0.9 million of losses for fiscal 2001 as compared to $4.4 million of losses for fiscal 2000.

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      The Company recorded certain asset impairment losses and other restructuring charges in fiscal years 2001 and 2000. Asset impairment and other restructuring charges recorded by the Company during fiscal 2001 are as follows (millions of dollars):

      The Company recorded impairment losses totaling $88.9 million due primarily to certain manufacturing facilities and related long-lived assets.

      As a consequence of the notifications received in April 2001 by the Company from certain customers of its Petersburg, Michigan manufacturing facility regarding significantly lower future product orders and the failure to obtain adequate customer support required to relocate production, management revised its estimate of future undiscounted cash flows expected to be generated by the facility. The Company concluded that this estimated amount was less than the carrying value of the long-lived assets related to the Petersburg facility and, accordingly, recognized an impairment charge of $28.5 million in the first quarter of fiscal 2001.

      During the third quarter of fiscal 2001, the Company recognized asset impairment losses of $3.2 million. Of these losses, the discontinuance of the Company’s Equipment and Engineering business located in Montague, Michigan represented $2.3 million, and the abandonment of a greenfield project in Thailand represented $0.9 million.

      The Company recognized an asset impairment loss of $42.7 million related to the announced closure of its Bowling Green, Kentucky facility during the fourth quarter of fiscal 2001. This facility will operate through mid-summer 2002 to service existing contracts and assist in transitioning production, which will be fully absorbed by the Company’s fabricated steel wheel manufacturing facility located in Sedalia, Missouri. The decision to close the plant was based on the weak economy, the tightened domestic auto industry and changing market requirements, which have resulted in reduced demand for fabricated steel wheels. The rationalization of the Company’s fabricated wheel manufacturing capacity will allow it to reduce overhead and manufacturing costs in North America.

      During the fourth quarter of fiscal 2001, the Company also recognized asset impairment losses of $6.1 million related to its fabricated wheel facility located in Königswinter, Germany. This charge was recorded as part of a multiple year restructuring program to upgrade and improve the Company’s international fabricated wheel operations. The Company transferred production of certain products to its facilities located in the Czech Republic and in India and further consolidated passenger car and commercial wheel production within an adjacent facility located in Königswinter, Germany.

      During the fourth quarter of fiscal 2001, the Company recognized an asset impairment loss of $8.4 million at its foundry located in Maulbronn, Germany. The Company commenced a plan of action to market this facility for sale during the fourth quarter. The result of the marketing process has indicated that the Company is not likely to realize any proceeds from the sale of this business. Consequently, the Company wrote down its investment in net fixed assets and other long-lived assets to its fair market value.

      The Company wrote down the net carrying value of long-lived assets discussed above to their estimated fair values based on discounted cash flow calculations or appraisals.

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      During fiscal 2001, the Company recognized asset impairment losses of $32.1 million related to certain machinery and equipment. These losses are primarily due to a change in management’s plan for the future use of idled machinery, equipment and tooling at certain of its locations and to investments in machinery, equipment and tooling at its Somerset, Kentucky and Königswinter, Germany facilities. The Company wrote down the net carrying value of long-lived assets discussed above to their estimated fair values based on discounted cash flow calculations or appraisals.

      During fiscal 2001, the Company recorded $20.6 million of severance and other restructuring costs. Closure costs and facility decommissioning costs related to its Bowling Green, Kentucky, Königswinter, Germany, and Petersburg, Michigan facilities accounted for $11.9 million of these costs.

      On November 2, 2001, the Company announced the immediate elimination of 145 positions or approximately 11% of its salaried workforce across its domestic operations. In addition, the Company announced that it would offer an early retirement option to approximately 45 salaried employees. In connection with the elimination of the 145 positions, the Company recorded a restructuring charge of $2.4 million in the fourth quarter of fiscal 2001. Most of the cash required to fund this charge is for severance benefits and was paid by the end of fiscal 2001. Of the 45 employees offered an early retirement option, 31 accepted by December 15, 2001, the acceptance date. In connection with this early retirement offer, the Company recorded a restructuring charge of $3.9 million in the fourth quarter of fiscal 2001 primarily related to continued medical benefits and supplemental retirement benefits which are expected to be paid over a period of up to 9 years commencing in fiscal 2002.

      The Company also recorded $2.4 million of costs related to severance and post-termination benefits during the fourth quarter of fiscal 2001 at its locations in Königswinter, Germany, Manresa, Spain, Ostrava, Czech Republic, and Montague, Michigan.

      In the second quarter of fiscal 2001, the Company recorded a $3.8 million loss on investment in joint venture related to its Mexican joint venture, which had incurred and expects to continue to incur significant operating losses.

      In the third quarter of fiscal 2000, the Company recorded a $1.5 million loss on investment in joint venture related to its Venezuelan joint venture.

      Net interest expense was $175.2 million for fiscal 2001 compared to $163.5 million for fiscal 2000. This increase primarily reflects higher outstanding borrowings and higher interest rates on the refinanced debt. From December 5, 2001 to January 31, 2002, the Company did not accrue any interest expense on its unsecured senior notes and unsecured senior subordinated notes due to the Chapter 11 Filings by the Debtors. Interest not accrued or expensed on these notes approximated $18.7 million.

      Taxes on Income for fiscal 2001 were $10.3 million of expense despite the pre-tax loss for the year. This tax expense is primarily the result of taxes in foreign jurisdictions. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. In view of the substantial doubt regarding the Company’s ability to continue as a going concern, the Company determined as of January 31, 2002 that it could not conclude that it was more likely than not that the benefits of the deferred tax assets would be realized in the future. Accordingly, a valuation allowance was recorded against all net deferred tax assets in the United States and certain deferred

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      Implementation of a plan or plans of reorganization under Chapter 11 may reduce the availability of some or all of the Company’s net operating loss carryforwards and other tax attributes, and may reduce the tax basis of long-lived assets.

      The Company’s net sales for fiscal 2000 were $2,168.2 million, a decrease of 5.5% as compared to net sales of $2,295.1 million for fiscal 1999. The decrease was principally due to decreases in heavy truck production in North America, loss of market share in the North America wheels market and the expiration of production contracts with certain customer programs at various components operations. This decrease was partially offset by higher sales from European operations in the Automotive Wheels segment despite the weakening of the euro against the dollar by approximately 13%.

      Net sales from the Company’s Automotive Wheels segment were essentially unchanged in fiscal 2000 from fiscal 1999. Net sales from the Company’s North American light vehicle wheel operations decreased by $33.3 million, which was substantially offset by the $28.8 million increase in net sales from the Company’s foreign light vehicle wheel operations. The decrease in revenues from the Company’s North American operations is primarily attributable to decreasing market share. The increase in revenues from the Company’s foreign operations is primarily attributable to increasing market share and increasing penetration of aluminum wheel sales to European customers.

      Revenues from Components decreased by $51.2 million from $702.4 million in fiscal 1999 to $651.2 million in fiscal 2000. A majority of this decrease is primarily due to lower unit sales primarily arising from the termination and the expiration of production contracts with certain customer programs.

      Other revenues decreased by $71.3 million from $235.2 million in fiscal 1999 to $163.9 million in fiscal 2000. This decrease is primarily due to lower unit sales to commercial highway customers. Class 8 heavy-duty truck production in North America decreased by approximately 25% from 1999 to 2000.

      The Company’s gross profit for fiscal 2000 decreased to $256.6 million or 11.8% of net sales, as compared to $379.4 million or 16.5% of net sales for fiscal 1999. The decrease in gross profit is primarily due to lower sales in North America, inefficient operating performance at various facilities and the impact of recording restructuring charges during fiscal 2000 to write-down inventory and other current assets.

      The Company’s Automotive Wheels segment reported gross profit decreased $69.0 million from fiscal 1999 to fiscal 2000. Gross profit from the Company’s North American operations decreased by $53.4 million from fiscal 1999 to fiscal 2000. The Company’s Somerset, Kentucky facility contributed $17.4 million of this decrease in gross profit due to recurring manufacturing difficulties. The Company is evaluating various restructuring alternatives at that facility. The remainder of the decrease in gross profit from the Company’s North American automotive wheel operations is primarily due to lower operating performance at various facilities, lower sales, customer pricing pressure and unrecovered increases in natural gas costs. Gross profit

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      Components reported gross profit decreased $36.1 million from fiscal 1999 to fiscal 2000. This decrease is primarily due to operating inefficiencies at some of its suspension and powertrain facilities and lower overall sales.

      Gross profit reported in the Other segment decreased $17.7 million from fiscal 1999 fiscal 2000. This decrease is primarily due to significantly lower sales in the heavy-duty truck market in North America and the associated operating inefficiencies arising from lower sales.

      Marketing, general and administrative expenses were $100.1 million or 4.6% of net sales for fiscal 2000, as compared to $88.9 million or 3.9% of net sales for fiscal 1999. The majority of the increase was attributable to approximately $2.3 million of costs resulting from the Company’s tender offer, and approximately $3.0 million to write off uncollectible receivables.

      Engineering and product development costs were $16.6 million or 0.8% of net sales for fiscal 2000, as compared to $21.6 million or 0.9% of net sales for fiscal 1999, principally reflecting the timing of recovery of costs from customers.

      Equity in (earnings) losses of joint ventures totaled a loss of $4.4 million for fiscal 2000, as compared to $1.2 million in earnings for fiscal 1999. The losses for fiscal 2000 are due to various operating issues associated with the Company’s interest in Reynolds-Lemmerz Industries, Canada, and market conditions impacting the Company’s interests in joint ventures in Mexico and Portugal.

      The following table summarizes the asset impairments and other restructuring charges recorded by the Company during fiscal 2000 (millions of dollars):

      Based on the levels of operating losses in fiscal 2000 and fiscal 1999, management concluded that the level of estimated future undiscounted cash flows was less than the carrying value of long-lived assets related to the Somerset facility at January 31, 2001. Accordingly, the Company wrote down the net carrying value of long-lived assets related to this facility to their estimated fair value of $12.6 million. The Company recognized an impairment charge of $42.7 million in fiscal 2000 to reduce the carrying value of property, plant and equipment. Additionally, the Company recognized an impairment charge of $1.5 million related to its Petersburg facility during the year ended January 31, 2001.

      The impairment of certain machinery and equipment primarily in the Automotive Wheel segment, relates principally to a change in management’s plans for future use of idled machinery and equipment and removal of certain equipment from service due to softening conditions in the heavy truck and light vehicle

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      During the third and fourth quarters of fiscal 2000, the Company implemented a workforce reduction program in which approximately 400 employees were terminated. A charge of $4.4 million was recorded for severance and other termination benefits related to this program. Of this amount, approximately $1.7 million had been paid prior to January 31, 2001, with the remaining $2.7 million expected to be paid during fiscal 2001 and fiscal 2002. Additionally, as part of a multiple year restructuring program to upgrade and improve the Company’s international fabricated wheel manufacturing capabilities, the Company recorded a charge of $10.6 million in fiscal 2000. Approximately $5.0 million of this charge remained unpaid at January 31, 2001, and is expected to be paid during fiscal 2001 and fiscal 2002.

      Net interest expense was $163.5 million for fiscal 2000, as compared to $153.3 million for fiscal 1999. This increase is due to the increase in borrowings and interest rates.

      Taxes on Income for 2000 were $9.7 million of expense despite the pre-tax loss for the year. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. In view of the substantial doubt regarding the Company’s ability to continue as a going concern, the Company determined as of January 31, 2001 that it could no longer conclude that it was more likely than not that the benefits of the deferred tax assets would be realized in the future. Accordingly, a valuation allowance was recorded in the fourth quarter of fiscal 2000 against all net deferred tax assets in the United States and certain deferred tax assets recorded at various international locations. The increase in income tax expense during fiscal 2000 as a result of the required valuation allowance was $71.6 million. The income tax expense for fiscal 1999 was $38.3 million, resulting in an effective tax rate of 43%.

      As described under Part I, Item 1 “Recent Developments”, the Company and certain subsidiaries filed voluntary petitions for reorganization relief under Chapter 11 of the Bankruptcy Code. The matters described under this caption “Liquidity and Capital Resources”, to the extent that they relate to future events or expectations, may be significantly affected by the Chapter 11 Filings. Those proceedings will involve, or result in, various restrictions on the Company’s activities, limitations on financing, the need to obtain Bankruptcy Court approval for various matters and uncertainty as to relationships with vendors, suppliers, customers and others with whom the Company may conduct or seek to conduct business.

      On December 17, 2001, the Company entered into a Revolving Credit and Guaranty Agreement among the Company, as borrower, certain subsidiaries of the Company, as guarantors, the lenders parties thereto, CIBC World Markets Corp., as lead arranger, Bank of America, N.A. and Salomon Smith Barney, Inc., as syndication agents, and Canadian Imperial Bank of Commerce, as administrative agent for the lenders (the “DIP Agreement”). Pursuant to the DIP Agreement, the Company has access to a revolving credit facility (the “DIP Facility”) not to exceed $200 million with a sub-limit of $15 million for letters of credit. The Company received Bankruptcy Court approval for the DIP Agreement on December 21, 2001 (on an interim basis) and on January 28, 2002 (on a final basis). The DIP Facility is scheduled to terminate on the earlier of (a) the date of the substantial consummation of a Plan of Reorganization and (b) June 5, 2003 (eighteen

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      On January 15, 2002, the Company and the initial lenders under the DIP Agreement entered into a First Amendment to the DIP Agreement. This First Amendment finalized the terms of the borrowing base formula of eligible assets which is used to calculate the amounts which the Company is able to borrow under the DIP Facility. The amount available under the facility as of April 30, 2002, after taking into account the aforementioned borrowings and letters of credit, was $104.0 million.

      Proceeds of loans made under the DIP Facility will be used for working capital and other general corporate purposes of the Company and its subsidiaries, generally as set forth in the Company’s budget and otherwise as permitted under the DIP Agreement and approved by the Bankruptcy Court. The DIP Agreement permits the Company to make loans to, and obtain letters of credit under the DIP Facility to support the operations or obligations of, its foreign subsidiaries in Germany and Mexico, in an aggregate principal amount not to exceed $20 million at any one time outstanding, to fund capital expenditures, required joint venture obligations, rebate exposure of such foreign subsidiaries or costs incurred in connection with plant closures, restructuring or the sale or termination of businesses of foreign subsidiaries in Germany. Such loans may be funded either from the Company’s operations or from borrowings under the DIP Facility.

      Beginning January 31, 2002, the DIP Facility requires compliance with monthly minimum consolidated and domestic EBITDA tests and limits on capital expenditures. In addition to the foregoing financial covenants, the DIP Agreement imposes certain other restrictions on the Company and its subsidiaries, including with respect to their ability to incur liens, enter into mergers, incur indebtedness, give guarantees, make investments, pay dividends or make other distributions and dispose of assets.

      The obligations of the Company and its subsidiary guarantors under the DIP Facility have super-priority administrative claim status as provided under the Bankruptcy Code. Under the Bankruptcy Code, a super-priority claim is senior to secured and unsecured pre-petition claims and all administrative expenses incurred in the Chapter 11 case. In addition, with certain exceptions (including a carve-out for unpaid professional fees and disbursements), the DIP Facility obligations are secured by (1) a first-priority lien on all unencumbered pre- and post-petition property of the Company and its subsidiary guarantors, (2) a first-priority priming lien on all property of the Company and its subsidiary guarantors that is encumbered by the existing liens securing the Company’s pre-petition secured lenders and (3) a junior lien on all other property of the Company and its subsidiary guarantors that is encumbered by pre-petition liens.

      Borrowings under the DIP Facility may be either ABR loans or Eurodollar loans. ABR loans are priced at 2.00% per annum plus the greatest of (i) the prime rate, (ii) the base CD rate plus 1.0% per annum, and (iii) the federal funds effective rate plus 0.5% per annum. Eurodollar loans under the DIP Facility are priced at LIBOR plus 3.50% per annum. In addition, the Company pays a commitment fee of 0.75% per annum on the unused amount of the DIP Facility commitment, payable monthly in arrears. Letters of credit are priced at 3.50% per annum on the undrawn stated amount in addition to a fronting fee of 0.25% per annum.

      The DIP Facility provides for the post-petition cash payment at certain intervals of interest accruing under the Company’s pre-petition credit agreement if certain tests are satisfied relating to the liquidity position and earnings of the Company and its subsidiaries, and the repatriation of funds from foreign subsidiaries.

      On February 3, 1999, the Company entered into a third amended and restated credit agreement, as further amended, (the “Credit Agreement”). Pursuant to the Credit Agreement, a syndicate of lenders agreed to lend to the Company up to $450 million in the form of a senior secured term loan facility and up to $650 million in the form of a senior secured revolving credit facility. The Company and all of its existing and future material domestic subsidiaries guarantee such term loan and revolving credit facilities. Such term loan and revolving facilities are secured by a first priority lien in substantially all of the properties and assets of the Company and its material domestic subsidiaries, now owned or acquired later, including a pledge of all of the shares of certain of the Company’s existing and future domestic subsidiaries and 65% of the shares of certain

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      In connection with the acquisition of CMI, the Company issued the 8 1/4% Notes, which are redeemable at the Company’s option at specified prices, in whole or in part, at any time on or after December 15, 2003. The 8 1/4% Notes are guaranteed by certain of the Company’s domestic subsidiaries but are subordinated to the Credit Agreement. In connection with previous acquisitions, the Company issued the 9 1/8% and 11% senior subordinated notes which are guaranteed by certain of the Company’s domestic subsidiaries but are subordinated to the Credit Agreement. These notes become redeemable at the Company’s option and at specific prices five years before the respective due dates of the notes. Due to the uncertainty resulting from the Chapter 11 Filings by the Debtors, the fair value of all of the Company’s senior subordinated notes as of January 31, 2002 is not presently determinable.

      On June 21, 2001, the Company received formal approval for Consent and Amendment No. 5 to the Credit Agreement. Such amendment provided for and/or permits, among other things, the issuance and sale of certain senior unsecured notes (the “Senior Notes”) by the Company, a receivables securitization transaction, and changes to the various financial covenants contained in the Credit Agreement in the event that the issuance and sale of the Senior Notes does occur. The amendment also provided the Company with the option of establishing a new “B” tranche of term loans (the “B Term Loan”) under the Credit Agreement. The amendment also provided for the net cash proceeds of the issuance and sale of the Senior Notes to be applied as follows: (i) the first $140,000,000, to prepay outstanding term loans (in direct order of stated maturity) under the Credit Agreement; (ii) the next $60,000,000, at the Company’s option, to prepay indebtedness of the Company’s foreign subsidiaries; (iii) the next $50,000,000, to prepay outstanding term loans (in direct order of stated maturity) under the Credit Agreement; (iv) the next $50,000,000, at the Company’s option, to repurchase or redeem a portion of the Company’s existing senior subordinated notes; and (v) the remainder, if any, to prepay outstanding term loans (in direct order of stated maturity) and then to reduce the revolving credit commitments under the Credit Agreement.

      On June 22, 2001, the Company received $291.1 million in net proceeds from the issuance of 11 7/8% senior unsecured notes due 2006 in the original principal amount of $300 million (the “11 7/8% Notes”). In addition, on July 2, 2001, the Company received $144.3 million in net proceeds from the issuance of the B Term Loan. These aggregate net proceeds totaled $435.4 million and were used as follows ($ in millions):

      In connection with the repurchase of the senior subordinated notes at a discount, the Company recorded an extraordinary gain of $10.6 million. This gain was offset by $0.9 million of unamortized deferred financing costs written off as a result of the repurchase. Further, in connection with the B Term refinancing and permanent reduction of the Credit Agreement, the Company recorded an extraordinary loss of $5.5 million for the write-off of unamortized deferred financing costs associated with the Credit Agreement. These

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      The 11 7/8% Notes mature on June 15, 2006 and require interest payments semi-annually on each June 15 and December 15. The 11 7/8% Notes may not be redeemed prior to June 15, 2005; provided, however, that the Company may, at any time and from time to time prior to June 15, 2004, redeem up to 35% of the aggregate principal amount of the 11 7/8% Notes at a price equal to 111.875% of the aggregate principal amount so redeemed, plus accrued and unpaid interest to the date of redemption, with the Net Cash Proceeds (as defined) of one or more Equity Offerings (as defined), provided that at least $195.0 million aggregate principal amount of the 11 7/8% Notes remain outstanding. On or after June 15, 2005, the Company may, at its option, redeem the 11 7/8% Notes upon the terms and conditions set forth in the indenture.

      The 11 7/8% Notes rank equally to all other existing and future senior debt but are effectively subordinated to the borrowings under the Credit Agreement. The 11 7/8% Notes are effectively subordinated to all liabilities (including trade and intercompany obligations) of the Company’s subsidiaries which are not guarantors of the Credit Agreement and the B Term Loan. The indenture governing the 11 7/8% Notes provide for certain restrictions regarding additional debt, dividends and other distributions, additional stock of subsidiaries, certain investments, liens, transactions with affiliates, mergers, consolidations, and the transfer and sales of assets. The indenture also provides that a holder of the 11 7/8% Notes may, under certain circumstances, have the right to require that the Company repurchase such holder’s 11 7/8% Notes upon a change of control of the Company. The 11 7/8% Notes are unconditionally guaranteed as to the payment of principal, premium, if any, and interest, jointly and severally by the Company’s material domestic subsidiaries. Due to the uncertainty resulting from the Chapter 11 Filings by the Debtors, the fair value of the Company’s 11 7/8% Notes as of January 31, 2002 is not presently determinable.

      Pursuant to an Exchange Offer Registration Rights Agreement (the “Registration Rights Agreement”), the Company agreed to use its best efforts to file and have declared effective an Exchange Offer Registration Statement with respect to an offer to exchange the 11 7/8% Notes for other notes of the Company with terms substantially identical to the 11 7/8% Notes. The Company also agreed to consummate such exchange offer on or prior to December 19, 2001. As a result of the Chapter 11 Filings by the Debtors on December 5, 2001, no interest payment was made when due on December 15, 2001, and the registration of the 11 7/8% Notes has not occurred.

      The B Term Loans amortize at the rate of 1% of principal per year and mature in full on December 31, 2005 (at which time all remaining unpaid principal will be due and payable). The B Term Loans rank equally with all other loans outstanding under the Credit Agreement and share equally in the guarantees and collateral granted by the Company and its subsidiaries to secure the amounts outstanding under the Credit Agreement. The B Term Loans are also subject to the same covenants and events of default which govern all other loans outstanding under the Credit Agreement.

      The interest rates of the B Term Loans are, at the option of the Company, based upon either an adjusted eurocurrency rate (the “eurocurrency rate”) or the rate which is equal to the highest of CIBC’s prime rate, the federal funds rate plus 1/2 of 1% and the base certificate of deposit rate plus 1% (the “ABR rate”), in each case plus an applicable margin. For B Term Loans which bear interest at the eurocurrency rate, the applicable margin is 5.0%, and for B Term Loans which bear interest at the ABR rate, the applicable margin is 4.0%. The Company may elect interest periods of one, two, three or six months for eurocurrency loans. Interest is computed on the basis of actual number of days elapsed in a year of 360 days (or 365 or 366 days, as the case may be, for ABR loans based on the prime rate). Interest is payable at the end of each interest period and, in any event, at least every three months.

      The Credit Agreement, as amended, contains certain financial covenants regarding interest coverage ratios, fixed charge coverage ratios, leverage ratios and capital spending limitations which were in effect during fiscal 2001 and fiscal 2000. The Company was in violation of certain of these covenants as of January 31, 2001. For purposes of the accompanying consolidated financial statements, all amounts outstanding with respect to

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      In April 1998, the Company entered into a three-year trade securitization agreement pursuant to which the Company and certain of its subsidiaries sold, and continued to sell on an ongoing basis, a portion of their accounts receivables to a special purpose entity (“Funding Co.”), which is wholly owned by the Company. Accordingly, the Company and such subsidiaries, irrevocably and without recourse, transferred and continued to transfer substantially all of their U.S. dollar denominated trade accounts receivable to Funding Co. Funding Co. then sold and continued to sell such trade accounts receivable to an independent issuer of receivable-backed commercial paper. The Company has no retained interest in the receivables sold. The Company had collection and administrative responsibilities with respect to all the receivables that are sold.

      This trade securitization agreement expired on May 1, 2001. The Company did not replace the agreement. From the expiration date to the date of the Chapter 11 Filings, the Company financed the amount of receivables previously sold under the securitization agreement with its revolving credit facility. The impact of the discontinued securitization program had an adverse impact on liquidity of approximately $71.6 million during fiscal 2001.

      During the third quarter of fiscal 2001, the Company sold its interest in its Canadian joint venture for cash proceeds of $9.5 million. In the fourth quarter of fiscal 2001, the Company sold its tire and wheel assembly business and its agricultural products business for cash proceeds of approximately $11.0 million and $5.5 million, respectively.

      The Company received net cash proceeds of $10.1 million during fiscal 2001 in connection with the early termination of all of its cross-currency interest rate swap agreements. As such, the Company held no cross-currency interest rate swap agreements at January 31, 2002. The proceeds received reduced the fair market value of the agreements recorded at the time of the early terminations resulting from accounting for mark-to-market adjustments during the terms of the agreements. The Company received cash in the amount of $26.4 million and $9.7 million during fiscal years 2000 and 1999, respectively, in connection with the early termination of various other cross-currency interest rate swap agreements.

      During the second quarter of fiscal 2000, the Board of Directors approved the repurchase of up to an aggregate of $30.0 million of the Company’s outstanding common stock. The Company repurchased approximately 1.9 million shares of its common stock for an aggregate purchase price of approximately $25.7 million during fiscal 2000.

      Certain of the operating leases covering leased assets with an original cost of approximately $68.0 million, contain provisions which, if certain events occur or conditions are met, including termination of the lease, might require the Company to purchase or re-sell the leased assets within a specified period of time, generally one year, based on amounts specified in the lease agreements. On July 18, 2001, the Company received notification of termination from a lessor with respect to leased assets having approximately $25.0 million of original cost (which termination was not to be effective for one year). The Company has not agreed with the lessor that a termination has occurred at the time of the notice and has continued to use the leased assets.

      The Company’s operations provided $2.7 million in cash during fiscal 2001 compared to a use of $6.8 million during fiscal 2000. This increase is primarily due to the working capital improvements during the year which exceeded the effect of lower operating profits.

      Between January 31, 2001 and the date of the Chapter 11 Filings, the Company’s operating cash flows were adversely affected by (i) a further decrease in operating margins, (ii) the effect of discontinuing the receivables securitization program, less the effect on the Company of its participation in separate accelerated

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      Since the Chapter 11 Filings, the Company’s operating cash flows have been and are expected in the future to be impacted by, among other things, (i) the need to fund the significant professional fees and other costs directly related to the Chapter 11 Filings, (ii) the cash requirements for the closure and restructuring of certain facilities, and (iii) the rate and level of post-petition trade credit available to the Company. The amount of interest paid should be substantially less due to the effect of the stay on payment of pre-petition obligations.

      Capital expenditures for fiscal 2001 were $133.8 million. These expenditures were primarily for additional machinery and equipment to improve productivity and reduce costs, to meet demand for new vehicle platforms and to meet expected requirements for the Company’s products. The Company anticipates that capital expenditures for fiscal 2002 will be approximately $100.0 million relating primarily to maintenance and cost reduction programs and to meet demand for new vehicle platforms.

      The principal sources of liquidity for the Company’s future operating, capital expenditure, facility closure and other restructuring requirements are expected to be (i) cash flows from operations, (ii) proceeds from the sale of non-core assets and businesses, (iii) borrowings under various foreign bank and government loans and (iv) and borrowings under the DIP Facility. While the Company expects that such sources will meet these requirements, there can be no assurances that such sources will prove to be sufficient.

      In the normal course of business the Company is exposed to market risks arising from changes in foreign exchange rates, interest rates and raw material prices. The Company selectively uses derivative financial instruments to manage these risks, but does not enter into any derivative financial instruments for trading purposes.

      The Company has global operations and thus makes investments and enters into transactions in various foreign currencies. In order to minimize the risks associated with global diversification, the Company first seeks to internally net foreign exchange exposures, and uses derivative financial instruments to hedge any remaining net exposure. The Company uses forward foreign currency exchange contracts on a limited basis to reduce the earnings and cash flow impact of non-functional currency denominated transactions. The gains and losses from these hedging instruments generally offset the gains or losses from the hedged items and are recognized in the same period the hedged items are settled. In addition, the Company has occasionally entered into cross currency interest rate swaps to hedge a portion of its investments in Europe. The currency effects of these swaps are reflected in the cumulative translation adjustments component of other accumulated comprehensive income, where they offset the gain or loss associated with the investments in Europe.

      The Company periodically analyzes the impact of foreign exchange fluctuations on earnings and has determined that, at January 31, 2002, a 10% increase or decrease in foreign exchange rates would not have a material effect on earnings.

      The Company generally manages its risk associated with interest rate movements through the use of a combination of variable and fixed rate debt, and certain specific interest rate cap agreements. At January 31, 2002, approximately 43% of the Company’s debt was variable rate debt. The Company believes that a 10% increase or decrease in the interest rate on variable rate debt could affect earnings by approximately $6.8 million.

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      The Company relies upon the supply of certain raw materials and other inputs in its production process and has entered into firm purchase commitments for aluminum and steel. The Company manages the exposures associated with these commitments primarily through the terms of its supply and procurement contracts. Additionally, the Company uses forward contracts to hedge against changes in certain specific commodity prices of the purchase commitments outstanding. The Company had no forward contracts during the years ended January 31, 2002 and 2001.

      The Company does not believe that sales of its products are materially affected by inflation, although there can be no assurance that such an effect will not occur in the future. In accordance with industry practice, the costs or benefits of fluctuations in aluminum prices are passed through to customers. In the United States, the Company adjusts the sales prices of its aluminum wheels every three to six months, if necessary, to reflect fully any increase or decrease in the price of aluminum. As a result, the Company’s net sales of aluminum wheels are adjusted, although gross profit per wheel is not materially affected. From time to time, the Company enters into futures contracts or purchase commitments solely to hedge against possible aluminum price changes that may occur between the dates of aluminum wheel price adjustments. Pricing and purchasing practices are similar in Europe, but opportunities to recover increased material costs from customers are more limited than in the United States.

      The value of the Company’s consolidated assets and liabilities located outside the United States (which are translated at period end exchange rates) and income and expenses (which are translated using average rates prevailing during the period) have been affected by the translation values, particularly the Euro and the Brazilian Real. Such translation adjustments are reported as a separate component of stockholders’ equity. Foreign exchange rate fluctuations could have an increased impact on the Company’s reported results of operations. However, due to the self-sustaining nature of the Company’s foreign operations (which maintain their own credit facilities, enter into borrowings and swap agreements and incur costs in their respective local currencies), the Company believes it can effectively manage the effect of these currency fluctuations. In addition, in order to further hedge against such currency rate fluctuations, the Company has, from time to time, entered into certain foreign currency swap arrangements.

      The Company’s net sales are continually affected by pressure from its major customers to reduce prices. The Company’s emphasis on reduction of production costs, increased productivity and improvement of production facilities has enabled the Company to respond to this pressure.

     Asset impairment losses and other restructuring charges

      The Company’s consolidated statements of operations included herein reflect an element of operating expenses described as asset impairments and other restructuring charges. The Company periodically evaluates whether events and circumstances have occurred that indicate that the remaining useful life of any of its long lived assets may warrant revision or that the remaining balance might not be recoverable. When factors indicate that the long lived assets should be evaluated for possible impairment, the Company uses an estimate of the future undiscounted cash flows generated by the underlying assets to determine if a write-down is required. If a write-down is required, the Company adjusts the book value of the underlying goodwill and then the book value of the impaired long-lived assets to their estimated fair values. Fair value is determined through third party appraisals or discounted cash flow calculations. The related charges are recorded as an asset impairment or, in the case of certain exit costs in connection with a plant closure or restructuring, a restructuring or other charge in the consolidated statements of operations.

      The Company believes that the Chapter 11 Filings in December 2001 and the ongoing comprehensive review of all of its operations as part of formulating its plan or plans of reorganization in order to emerge from Chapter 11 will take some time to complete. As discussed above and in the notes to the Company’s

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     Valuation allowances on deferred income tax assets

      In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company expects the deferred tax assets, net of the valuation allowance, at January 31, 2002 to be realized as a result of the reversal of existing taxable temporary differences in the United States and as a result of projected future taxable income and the reversal of existing taxable temporary differences in certain foreign locations. As a result of management’s assessment, a valuation allowance was recorded at January 31, 2002 and 2001. In view of the substantial doubt regarding the Company’s ability to continue as a going concern, the Company determined that it could not conclude that it was more likely than not that the benefits of certain deferred income tax assets would be realized. The valuation allowance recorded by the Company fully reserves for all domestic and certain foreign net deferred tax assets.

      In August 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 supersedes FASB No. 121, “Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of.” The statement retains the previously existing accounting requirements related to the recognition and measurement of the impairment of long-lived assets to be held and used while expanding the measurement requirements of long-lived assets to be disposed of by sale to include discontinued operations. It also expands the previously existing reporting requirements for discontinued operations to include a component of an entity that either has been disposed of or is classified as held for sale. The provisions of this Statement are effective for fiscal years beginning after December 15, 2001. The Company has not yet completed its analysis of the impact of SFAS No. 144 on its consolidated financial position or results of operations upon adoption.

      In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value of the liability can be made. Such associated asset retirement costs are to be capitalized as part of the carrying amount of the long-lived asset. SFAS also contains additional disclosure requirements regarding descriptions of the asset retirement obligations and reconciliations of changes therein. The provisions of this Statement are effective for fiscal years beginning after June 15, 2002. The Company has not yet completed its analysis of the impact of SFAS No. 143 on its consolidated financial position or results of operations upon adoption.

      In June 2001, the FASB issued SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 requires that goodwill be reviewed for impairment annually, rather than amortized into earnings. The provisions of this Statement are effective for fiscal years beginning after December 15, 2001. Amortization of goodwill will cease upon adoption of the Statement by the Company on February 1, 2002. At that valuation date, the Company will test goodwill for impairment, and any losses will be recognized as a cumulative effect of a change in accounting principle. Other acquired identifiable intangible assets having estimable useful lives will be separately stated from goodwill, and will continue to be amortized over their estimated useful lives. As of February 1, 2002, the Company had unamortized goodwill and other intangible assets of approximately $833.5 million, which will be subject to the transition provisions of SFAS No. 142. Amortization expense related to goodwill and other intangible assets was $26.4 million, $27.4 million and $27.5 million for fiscal 2001, 2000 and 1999, respectively. The Company believes it will incur a significant write-down in the value of its goodwill upon adoption of SFAS No. 142.

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      In June 2001, the FASB issued SFAS No. 141, “Business Combinations.” SFAS No. 141 requires that all business combinations (initiated after June 30, 2001) be accounted for under the purchase method of accounting. Use of the pooling-of-interests method is no longer permitted. Adoption of this standard is not anticipated to have a material effect on the Company’s financial position or results of operations as a result of future business combinations, as the Company has historically accounted for such transactions under the purchase method.

Item 7A.     Quantitative and Qualitative Disclosures About Market Risk

      The response to this Item is set forth above in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, under the heading “Market Risks.”

Item 8.     Consolidated Financial Statements and Supplementary Data

      The response to this Item is submitted in the Company’s Consolidated Financial Statements and Notes to Consolidated Financial Statements filed herewith, beginning at page F-1.

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

      None.

PART III

Item 10.     Directors and Executive Officers of the Registrant

Directors

      The Board of Directors of the Company is currently authorized to consist of eleven directors divided into three classes (Class 1, Class 2 and Class 3) serving staggered three-year terms. The Company’s By-Laws require that the three classes be as nearly equal in number as possible. Class 1 is composed of three directors and Classes 2 and 3 are each composed of four directors. There is currently one vacancy on the Board of Directors for a Class 1 Director and one vacancy for a Class 2 Director.

      Shareholders owning approximately 75% of the outstanding Common Stock of the Company are parties to a stockholders agreement (the “Stockholders Agreement”) which provides, among other things, that the Board of Directors shall consist of eleven members and that certain of these stockholders will vote their shares of Common Stock so that the Board of Directors of the Company will be comprised of the Chief Executive Officer of the Company (currently, Curtis J. Clawson), four designees of Joseph Littlejohn & Levy Fund II, L.P. (“JLL Fund II”) (currently, Paul S. Levy, Jeffrey C. Lightcap and David Y. Ying), one designee of TSG Capital Fund II, L.P. (“TSG”) (currently, Cleveland A. Christophe), two designees of Marianne Lemmerz, Horst Kukwa-Lemmerz, Inge Kruger-Pressl and Renate Kukwa-Lemmerz (collectively, the “Lemmerz Shareholders”) (currently, Horst Kukwa-Lemmerz and Wienand Meilicke), and three individuals determined by the Board who are not affiliated with the Company or any of the parties to the Stockholders Agreement other than one member that may be affiliated with CIBC WG Argosy Merchant Fund 2, L.L.C. (“Argosy”) (currently, John S. Rodewig and Ranko Cucuz). The Stockholders Agreement also provides, among other things, for certain transfer restrictions and registration rights for the stockholder parties thereto.

      Except as described above, there are no arrangements or understandings between any director and any other person pursuant to which he was selected as a director. The following are brief biographies of each of the directors:

      Curtis J. Clawson is 42 years old. He is a Class 2 Director and has been a director of the Company since August 2001. He has been Chairman of the Board of Directors since September 2001. From November 1999 until August 2000, Mr. Clawson was the President and Chief Operating Officer of American National Can Group, Inc. From May 1998 until November 1999, Mr. Clawson was an Executive Vice President of

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      Cleveland A. Christophe is 56 years old. He is a Class 3 Director and has been a director of the Company since July 1996. Mr. Christophe has been a Managing Member of TSG Capital Group, L.L.C. since January 1995, a director and President of TSG Associates II, Inc. since January 1995, and Managing Member of TSG Associates III, L.L.C. since August 1998. Mr. Christophe is also a director of TSGVI Associates, Inc., Midwest Stamping, Inc., Urban Brands, Inc., Millennium Digital Media, L.L.C., Orbseal L.L.C. and TCP Holdings, Inc.

      Ron Cucuz is 58 years old. He is a Class 2 Director and has been a director of the Company since 1992. Mr. Cucuz is also a director of Cleveland-Cliffs Inc. and Lincoln Electric Holdings, Inc.

      Horst Kukwa-Lemmerz is 59 years old. He is a Class 1 Director and has been a director of the Company since June 1997. He was appointed as Vice Chairman of the Company’s Board of Directors and Chairman of the Board of Directors of HLI (Europe), Ltd. upon consummation of the Lemmerz Acquisition. Mr. Kukwa-Lemmerz is also the President, Chief Executive Officer and a director of Port Armor Investment and Development, Inc. and H.K.L., L.L.C.

      Paul S. Levy is 54 years old. He is a Class 3 Director and has been a director of the Company since July 1996. Mr. Levy has been a Senior Managing Director of Joseph Littlejohn and Levy (“JLL”), which is the managing general partner of JLL Fund II, from its inception in 1988. Mr. Levy has served as Chairman of the Board of Directors and Chief Executive Officer of Lancer Industries, Inc. since July 1989. Mr. Levy is also a director of Fairfield Manufacturing Company, Inc., New World Pasta Company, IASIS Healthcare Corp., Builders FirstSource, Inc., Motor Coach Industries International, Inc. and AdvancePCS.

      Jeffrey C. Lightcap is 43 years old. He is a Class 1 Director and has been a director of the Company since October 1997. He has been a Senior Managing Director of JLL since June 1997. From February 1993 until May 1997, Mr. Lightcap was employed by Merrill Lynch & Co., an investment banking firm, first as a Director and then, commencing in 1994, as a Managing Director. Mr. Lightcap is also a director of New World Pasta Company, IASIS Healthcare Corp. and Motor Coach Industries International, Inc.

      Wienand Meilicke is 56 years old. He is a Class 3 Director and has been a director of the Company since June 1997. Mr. Meilicke is an attorney admitted to practice in Bonn, Germany and has, during at least the last five years, been a partner of Meilicke Hoffmann & Partner, a law firm located in Bonn, Germany. Mr. Meilicke is also a member of the supervisory boards of WABCO Standard GmbH, JADO AG and Breuniger Beteilgungs GmbH.

      John S. Rodewig is 68 years old. He is a Class 3 Director and has been a director of the Company since December 1992. He served as President of Eaton Corporation from 1992 until his retirement on January 1, 1996. Mr. Rodewig also serves as a director of FKI plc.

      David Y. Ying is 47 years old. He is a Class 2 Director and has been a director of the Company since June 1997. Mr. Ying has been a Senior Managing Director of JLL since June 1997. From January 1993 until May 1997, Mr. Ying was a Managing Director of Donaldson Lufkin & Jenrette, an investment banking firm. Mr. Ying is also a director of New World Pasta Company, IASIS Healthcare Corp., Lancer Industries, Inc. and Builders FirstSource, Inc.

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Officers

      The following table sets out the names and ages of each of the executive officers of the Company as of January 31, 2002, their positions as of that date, the date on which they were appointed to such positions and their business experience during the past five years. All positions shown are with the Company or its subsidiaries unless otherwise indicated. All executive officers are elected by the Board of Directors of the Company and serve at its pleasure. There are no family relationships among any of the executive officers and there is no arrangement or understanding between any of the executive officers and any other person pursuant to which he was selected as an officer.

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Section 16(a) Beneficial Ownership Reporting Compliance

      Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the Company’s directors and certain officers to file with the SEC and the NYSE initial reports of ownership and reports of changes in ownership of the Company’s Common Stock. Copies of all such Section 16(a) reports

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Director Compensation

      Directors who are not Company employees and who are not affiliated with certain of the parties to the Stockholders Agreement receive an annual retainer of $20,000, a fee of $1,000 for each Board or committee meeting attended and reimbursement of expenses incurred in attending Board and/or committee meetings. In fiscal year 2001, Messrs. Rodewig, Cucuz and Witt were the only directors of the Company who were paid for their participation as a director or member of a committee of the Board. Ray H. Witt served on the Board of Directors through June 14, 2001.

      Mr. Kukwa-Lemmerz is a designee on the Board of Directors of the Lemmerz Shareholders, who own an aggregate of 5,050,000 shares of Common Stock. In connection with the Lemmerz Acquisition, Mr. Kukwa-Lemmerz was elected as (i) Vice Chairman of the Company’s Board of Directors, (ii) a nonvoting member of the Compensation Committee, and (iii) Chairman of the Board of the Company’s subsidiary, HLI (Europe) Ltd. The Company also entered into consulting agreements (the “Consulting Agreements”) with Mr. Kukwa-Lemmerz and an affiliate of Mr. Kukwa-Lemmerz pursuant to which, among other things, (i) Mr. Kukwa-Lemmerz retired from all positions held with Lemmerz and its subsidiaries, (ii) the Company agreed to pay Mr. Kukwa-Lemmerz and his affiliate an aggregate of $500,000 annually during the five-year period for which consulting services will be provided, and (iii) the Company granted Mr. Kukwa-Lemmerz and his affiliate options to purchase an aggregate of 250,000 shares of Common Stock at an exercise price of $16 per share, such options to become exercisable at the rate of 20% annually on June 30, 1998 and each June 30th thereafter during the term of the Consulting Agreements.

Compensation Committee Interlocks and Insider Participation

      The members of the Compensation Committee of the Board of Directors during fiscal year 2001 were Messrs. Christophe, Rodewig and Ying. In addition, Messrs. Cucuz and Kukwa-Lemmerz attended one meeting of the Compensation Committee as non-voting members of the Committee. Mr. Clawson attended two meetings of the Compensation Committee as a non-voting member of the Committee. On June 30, 1997, the Company consummated the Lemmerz Acquisition in which the Lemmerz Shareholders, including Mr. Kukwa-Lemmerz, received $200 million in cash and five million shares of Series A Preferred Stock (which have subsequently converted into five million shares of Common Stock). In addition, in connection with the Lemmerz Acquisition, the Company entered into the Consulting Agreements with Mr. Kukwa-Lemmerz and an affiliate of Mr. Kukwa-Lemmerz. See “Director Compensation.”

     Executive Compensation

      This section provides summary information regarding the compensation of Mr. Clawson, the Chief Executive Officer and Mr. Cucuz, the former Chief Executive Officer, and the four most highly compensated officers other than Messrs. Clawson and Cucuz: Giancarlo Dallera, Vice President — President, European Wheels; James L. Stegemiller, Vice President — President, North American Wheels; Scott Harrison, Vice President — President, Suspension Components; and Fred Bentley, President — Vice President, Commercial Highway and Aftermarket Services (collectively, the “Named Executive Officers”).

     Salary and Bonus

      Messrs. Clawson, Stegemiller, Harrison and Bentley were hired by the Company in fiscal year 2001. Mr. Dallera received an increase in his salary and a performance bonus in fiscal year 2001. All of the Named

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(5)	Mr. Dallera was appointed to his current position in March 2002. Prior to that time, Mr. Dallera was the Company’s Vice President — President, European Cast Wheels. Mr. Dallera’s salary is paid in Italian Lira and his bonus is paid in United States Dollars. The U.S. Dollar amount for Mr. Dallera’s salary was calculated using the exchange rate of 1 Lira = 0.000459 Dollars, which was the average exchange rate of such currency during fiscal year 2001.
(6)	Messrs. Stegemiller, Harrison and Bentley were appointed to their positions as officers of the Company on October 15, 2001, October 22, 2001 and October 22, 2001, respectively.

Stock Option Grants in Fiscal Year 2001

      Messrs. Stegemiller, Harrison and Bentley received grants of stock options in fiscal year 2001 in connection with their appointment as officers of the Company. The following table sets forth certain information respecting the grants of stock options to these individuals during fiscal year 2001:

Aggregate Option Exercises in Fiscal Year 2001 and January 31, 2002 Option Value

      The following table shows the number of shares covered by both exercisable and non-exercisable stock options held by the Named Executive Officers as of January 31, 2002. This table also shows the value on that date of their “in-the-money” options, which is the positive spread between the exercise price of existing stock options and $.25 per share (the closing market price of the Common Stock on January 31, 2002). No options were exercised in fiscal year 2001 by any of the Named Executive Officers.

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Other Compensation and Benefits

      The Named Executive Officers receive medical, group life insurance and other benefits (including matching contributions under the Company’s 401(k) Plan) that are available generally to all of the Company’s salaried employees. The Named Executive Officers participate in the Company’s salaried employees pension plan, which is qualified under Section 401(a) of the Code and receive certain other perquisites. The Named Executive Officers based in the United States also participate in the Company’s supplemental employee retirement plan (which is not qualified under Section 401(a) of the Internal Revenue Code). Additional information regarding other compensation and benefits of the Named Executive Officers is described in the Summary Compensation Table set forth above.

Pension Plan

      The Company maintains a defined benefit pension plan covering all persons who were United States salaried employees of the Company and its subsidiaries on or before December 31, 1994. Pension income at normal retirement age is calculated by averaging the participant’s highest consecutive 60 months of compensation out of the final 120 months of compensation and providing 1% of the first $7,800 thereof and 1 1/3% of the remainder for each of the first 30 years of service, and 1/2% and 2/3% of such compensation, respectively, for each of the next 10 years of service. Benefits under the Company’s pension plan are limited by restrictions imposed by the Internal Revenue Code of 1986, as amended (the “Code”). Prior to the Company’s initial public offering in December 1992 (the “IPO”), the eligible United States salaried employees of the Company participated in a pension plan sponsored by K-H Corporation (“K-H”), which at the time was the parent corporation of the Company. In connection with the IPO, K-H transferred the assets and liabilities of its plan relating to participants employed in the Company’s wheel business to the Company’s pension plan, in accordance with the requirements of the Employee Retirement Income Security Act of 1974, as amended. Effective January 1, 1995, (1) certain provisions of the plan that had frozen final average compensation for purposes of the plan as of December 31, 1991, were rescinded, (2) no new participants may enter the plan and (3) for purposes of calculating benefits payable under the plan, no additional service may be credited under the plan; however, service continues to be credited under the plan for vesting purposes and to determine eligibility for retirement benefits under the plan. In addition, increases in compensation were recognized under the plan for purposes of determining pensions. On January 31, 2002, the plan was restated to comply with recent legislation and to freeze final average compensation.

      The following table illustrates the annual pension benefits payable from the Company’s defined benefit pension plan to a person in the specified earnings and years of service classifications at normal retirement date.

PENSION PLAN TABLE

      Base salary is the only compensation upon which benefits under this plan are determined.

      Mr. Cucuz, was a participant in the pension plan described above, and had covered compensation of $170,000 and four years of credited service (which amount was frozen as of December 31, 1994).

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      The covered compensation amounts set forth above differ from the amounts set forth in the Summary Compensation Table because of limitations contained in the Code on compensation permitted to be used for pension plan purposes.

      The Pension Plan Table shows amounts that are payable in the form of a straight-life annuity; such amounts are not subject to offset for Social Security or any other payments.

      Effective January 1, 1995, the Company adopted a defined contribution pension plan for its United States salaried employees under which the Company contributes to a retirement account for each eligible employee 5% of his compensation up to the amount of the Social Security wage base ($80,400 in 2001) plus 8% of his compensation over the amount of the Social Security wage base. Compensation, for purposes of this plan, includes salary, bonus and commissions, but is limited to a maximum of $170,000 under provisions of the Code. The retirement account is invested at the direction and risk of the employee, who is entitled, subject to certain vesting requirements, to the contents of his account when his employment terminates, at retirement or otherwise. The Company does not assure the employee of the amount of his retirement benefit or the value of this account at any time.

Employment Contracts, Termination of Employment and Change-in-Control Arrangements.

      The Company, through its subsidiary, Hayes Lemmerz, S.p.A. (“HLI Italy”), entered into an employment agreement with Mr. Dallera, dated February 1, 1993, as amended on June 6, 1996, that provides for his employment as General Manager of HLI Italy at an initial base salary which automatically increases annually following increases in an index commonly used to determine the cost of living increases for senior managers in Italy. For fiscal year 2001, Mr. Dallera’s base salary was $293,087 (translated from Italian Lira at the exchange rate of 1 Lira = 0.000459 US Dollars). Under this agreement, Mr. Dallera is entitled to all HLI Italy employee benefits; his annual bonus, however, is paid under the Company’s Short-Term Incentive Plan and based upon the criteria established for the other executive officers of the Company. The agreement expires by its terms on December 31, 2003, or in the event of Mr. Dallera’s death. Although Mr. Dallera was not entitled to an annual bonus under the Short-Term Incentive Plan due to the financial results of the Company as a whole, Mr. Dallera received an annual bonus in recognition of the strong financial performance of the European Wheels business unit in fiscal year 2001. Effective December 1, 2001, the Company entered into an amended and restated settlement agreement with Mr. Dallera, pursuant to which the Company paid Mr. Dallera a retention bonus. The retention bonus is discussed in more detail in Note 1 to the Summary Compensation Table above.

      The Company entered into separate agreements (the “Employment Agreements”) with Messrs. Clawson, Stegemiller, Harrison and Bentley (the “Covered Individuals”) in connection with their appointment as officers of the Company. Each Employment Agreement is for a continuous term of two years, extending one additional day for each day that the Covered Individual is employed by the Company. The initial annual salaries for Messrs. Clawson, Stegemiller, Harrison and Bentley are $755,000, $285,000, $265,000 and $200,000, respectively, to be reviewed annually, and may be increased, but not decreased, by the Compensation Committee of the Company’s Board of Directors. The Covered Individuals are entitled to be reimbursed for their reasonable out-of-pocket expenses, participate in the Company’s benefit plans and receive customary prerequisites. Mr. Clawson’s Employment Agreement provides that he will be nominated to serve on the Board of Directors of the Company.

      Pursuant to the Employment Agreements, the Covered Individuals are eligible to earn an annual bonus under the Company’s Short-Term Incentive Plan up to a maximum of 120% of their base salary (200% in the case of Mr. Clawson). Mr. Clawson is also eligible to receive a minimum bonus for fiscal year 2001 as described in the “Summary Compensation Table.” Each Covered Individual also received retention bonuses, as described in the “Summary Compensation Table,” and stock options, as described in “Stock Option Grants in Fiscal Year 2001.” Upon a change in control of the Company (as defined in the Employment Agreements), each Covered Individual is entitled to an immediate payment of all earned but unpaid compensation and a pro rata bonus payment for the current fiscal year under any bonus plan for which he is then eligible.

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      The Employment Agreements provide that each Covered Individual whose employment with the Company is terminated during the term of the Employment Agreements (i) by the Company without cause, or (ii) by the Covered Individual with good reason, is entitled to receive: (a) earned but unpaid compensation, less any payment previously made in respect of such amount, (b) the product of the individual’s base salary, his bonus percentage and the fraction of the current fiscal year expired at the time of such termination, less any payments previously made in respect of such amounts upon such change of control, (c) one year’s base salary (two year’s salary and bonus (at 60% of base salary) in the case of Mr. Clawson). The Employment Agreements also provide that the Covered Individuals are entitled to have the Company (i) continue for up to one year all welfare benefit programs, such as medical and life, provided by the Company and its affiliated companies, (ii) pay or provide (two years in the case of Mr. Clawson) any other amounts incurred prior to the date of termination, or benefits required or permitted under any program or agreement of the Company, (iii) provide key executive level outplacement services, and (iv) transfer title to the Company vehicle used by the Covered Individual.

      In addition, the Employment Agreements provide that each Covered Individual whose employment with the Company is terminated on or following a change in control and during the term of the Employment Agreements, other than (i) by the Company for cause, (ii) by reason of death or disability, or (iii) by the Covered Individual without good reason, is entitled to receive: (a) earned but unpaid compensation, less any payment previously made in respect of such amount, (b) the product of the individual’s base salary, his bonus percentage and the fraction of the current fiscal year expired at the time of such termination, less any payments previously made in respect of such amounts upon such change of control, (c) two times the sum of (x) the individual’s base salary and (y) the product of his base salary and his bonus percentage (60% bonus percentage in the case of Mr. Clawson) and (d) one hundred thousand dollars ($100,000). The Employment Agreements also provide that the Covered Individuals are entitled to have the Company (i) continue for up to two years all welfare benefit programs, such as medical and life, provided by the Company and its affiliated companies, (ii) pay or provide any other amounts incurred prior to the date of termination, or benefits required or permitted under any program or agreement of the Company, (iii) provide key executive level outplacement services, and (iv) pay the Covered Individuals’ legal expenses relating to a dispute under the Employment Agreements.

      The Employment Agreements also contain provisions regarding termination of employment upon disability, death, and other certain circumstances. In addition, if any payments or benefits paid to the Covered Individuals under the Employment Agreements or any other plan, arrangement or agreement with the Company are subject to the federal excise tax on excess parachute payments or any similar state or local tax, or any interest or penalties are incurred with respect thereto, the Company will pay to the Covered Individuals an additional amount so that the net amount retained by the Covered Individuals after deduction or payment of those taxes will be as if no such tax, interest or penalty was imposed.

Item 12.     Security Ownership of Certain Beneficial Owners and Management

      The following contains stockholding information for persons known to the Company to own five percent or more of the Company’s Common Stock, the directors of the Company and the Company’s executive officers.

      Ownership of the Company’s Common Stock is shown in terms of “beneficial ownership.” A person generally “beneficially owns” shares if he has either the right to vote those shares or dispose of them. More than one person may be considered to beneficially own the same shares.

      In this report, unless otherwise noted, a person has sole voting and dispositive power for those shares shown as beneficially owned by him. Shares shown as beneficially owned by the Company’s executive officers include shares that they have the right to acquire by exercising options on or before 60 days from April 26, 2002 (the “Record Date”). The percentages shown below compare the person’s beneficially owned shares with the total number of shares of the Company’s Common Stock outstanding on the Record Date (28,455,995 shares).

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      As of the Record Date, the outstanding Common Stock was held of record by 105 stockholders.