UNITED STATES SECURITIES AND EXCHANGE COMMISSION

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

Tower Automotive, Inc.

(Exact name of Registrant as specified in its charter)

Registrant’s telephone number, including area code:
(248) 675-6000

None
(Former Name or Former Address, if Changed Since Last Report)

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:
None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, during the preceding 12 months (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

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

As of February 28, 2005, 58,528,554 shares of Common Stock of the Registrant were outstanding. As of February 28, 2005, the aggregate market value of the Common Stock of the Registrant (based upon the last reported sale price of the Common Stock at that date on the Pink Sheets), excluding shares owned beneficially by affiliates, was approximately $9,832,238.

TOWER AUTOMOTIVE, INC.

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

i

PART I

Item 1. Business

Tower Automotive, Inc. and its subsidiaries (collectively referred to as the “Company” or “Tower Automotive”) is a leading global designer and producer of structural metal components and assemblies used by the major automotive original equipment manufacturers (“OEMs”), including Ford, DaimlerChrysler, General Motors (“GM”), Hyundai/Kia, Volkswagen Group, Renault/Nissan, Toyota, Fiat, BMW, Honda, Mazda, Isuzu and Chery. The Company provides broad technical design, engineering, and program management capabilities for products that cover the entire body structure of a vehicle including automotive body structural stampings and assemblies, exposed sheet metal (“Class A”) components, lower vehicle structural stampings and assemblies, suspension components, modules and systems. The Company believes it is the largest independent global supplier of structural components and assemblies to the automotive market (based on net revenues).

Tower Automotive is one of only a few companies that provide a broad array of structural metal products and services for the automotive sector. These products and services are delivered to our customers on a global basis from more than 50 production and engineering facilities located in the United States, Canada, Mexico, Germany, Belgium, Slovakia, Poland, Italy, France, Spain, Brazil, Japan, Korea, China, and India. As OEMs reduce their supplier base in efforts to lower costs and improve quality, they are more frequently awarding sole-source contracts to broadly capable suppliers who are able to supply large and complex portions of a vehicle on a global basis rather than to suppliers that only provide individual component parts. OEMs’ criteria for supplier selection include cost, quality, responsiveness, full-service design and engineering and program management capabilities. In addition, OEMs are increasingly requiring their suppliers to have the capability to design and manufacture their products in multiple geographic markets. As a supplier with strong OEM relationships, broad capabilities and technologies, scale and global presence, the Company expects to continue to benefit from these trends going forward.

Proceedings under Chapter 11 and Administration of the Bankruptcy Code

On February 2, 2005, Tower Automotive, Inc. and 25 of its United States subsidiaries (collectively, the Debtors) each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (“Bankruptcy Code”) in the United States Bankruptcy Court Southern District of New York (the “Court”). The cases are jointly consolidated for administrative purposes. The Debtors are operating as debtors-in-possession (“DIP”) pursuant to the Bankruptcy Code. An official committee of unsecured creditors has been appointed.

The Debtors’ liquidity position was adversely affected in early 2005 by customer pricing pressures, North American automotive production cuts, significantly higher raw material costs (primarily steel), high interest costs and the termination of accelerated payment programs of certain customers. An extensive liquidity deficiency and a significant amount of indebtedness, incurred through internal growth and acquisition activity, made the filing necessary.

The objectives of the Chapter 11 filing are to protect and preserve the value of assets and to restructure and improve the Debtors’ financial and operational affairs in order to return to profitability. While the Company believes it will be able to significantly reduce the Debtors’ unsustainable liabilities and simplify its complex and restrictive capital structure through the bankruptcy process, there can be no certainty that it will be successful in doing so.

The Debtors intend to file a plan of reorganization with the Court. The Company is unable to estimate what recovery such a plan of reorganization will provide holders of the Debtors’ unsecured pre-petition debt. While the Debtors filed for Chapter 11 to gain relief from significant pre-petition debt levels, the extent to which such relief will be achieved is uncertain at this time.

DIP Financing

In February 2005, the Bankruptcy Court approved a Revolving Credit, Term Loan and Guaranty Agreement (“DIP Agreement”), as amended, with a national banking institution as agent for the lenders (“Lenders”) and each of the Lenders.

1

The DIP Agreement provides for a $725 million commitment of debtor-in-possession financing comprised of a revolving credit and letter of credit facility in an aggregate principal amount not to exceed $300 million and a term loan in the aggregate principal amount of $425 million. The proceeds of the term loan have been used to refinance the Debtors’ pre-petition obligation amounting to $425 million under the credit agreement existing at the time of the bankruptcy filing. The proceeds of the revolving credit loans will be used to fund the ongoing cash requirements of the Debtors during the Chapter 11 proceedings .

The DIP Agreement matures on February 2, 2007; however, the Debtors are obligated to repay all borrowings made pursuant to the DIP Agreement upon substantial consummation of a plan of reorganization of the Debtors that is confirmed pursuant to an order of the Bankruptcy Court.

Going Concern

As indicated above, effective February 2, 2005, the Debtors are operating pursuant to Chapter 11 under the Bankruptcy Code and continuation of the Company as a going concern is contingent upon, among other things, the Debtors’ ability (i) to comply with the terms and conditions of the DIP Agreement described above; (ii) to obtain confirmation of a plan of reorganization under the Bankruptcy Code; (iii) to reduce unsustainable debt and simplify the Company’s complex and restrictive capital structure through the bankruptcy process; (iv) to return to profitability; (v) to generate sufficient cash flow from operations to fund working capital and debt service requirements; and (vi) to obtain financing sources to meet the Company’s future obligations. These matters create uncertainty regarding our ability to continue as a going concern.

Overview of the Company

Since its inception in April 1993, when the Company was formed to acquire R. J. Tower Corporation, the Company’s revenues have grown rapidly through internal growth and acquisitions. From 1993 to 2004, the Company successfully completed 15 acquisitions and established five joint ventures to create the global footprint that characterizes the Company today. As a result of these acquisition activities and significant organic growth, Company revenues have increased from approximately $86 million in 1993 to approximately $3.2 billion in 2004. The Company’s North American average content per vehicle has increased from $6 in 1993 to $132 in 2004.

Approximately 66% of the Company’s 2004 revenues were generated from sales in North America. The Company supplies products for many car, light truck and sport utility models, including the Ford Five Hundred/Freestyle, Taurus, Focus, Ranger and F-Series pickup trucks, Chevrolet Silverado and GMC Sierra pickups, DaimlerChrysler Caravan/Town & Country, Dodge Ram and Dakota pickup trucks, Toyota Camry, Avalon, Corolla and Tundra, Honda Accord and Civic and the Nissan Xterra, Pathfinder, Titan/Armada and Infiniti QX56. Approximately 20% of the Company’s 2004 revenues were generated from sales in Europe, 12% in Asia and 2% in South America. Key vehicle programs include Volvo S40 and V50, DaimlerChrysler A-Class and Sprinter, BMW 1 & 3 series, VW Golf, Jetta and Toureg, Hyundai/Kia Spectra, Cerato, Sportage, Carinival and Sorento, Fiat Punto Stilo, Ducato, and the Alpha Romeo 147 and 156 and the Porsche Cayenne.

The Company’s principal executive offices are located at 27275 Haggerty Road, Novi, Michigan 48377, and the telephone number is (248) 675-6000. The Company makes available, free of charge through our internet website (www.towerautomotive.com), annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed with the Securities Exchange Commission (“SEC”), as soon as reasonably practicable after those reports are filed with the SEC.

Financial information about segments

See Note 15 to the Consolidated Financial Statements contained in Item 8 of this Form 10-K.

2

Business and operating strategy

Tower Automotive was created through a series of acquisitions of complementary businesses that have allowed the Company to become the largest independent global supplier of structural metal components and assemblies (based on net revenues) with a diverse customer portfolio and a broad scope of product offerings. In the early years, the growth coincided with an extended period of increased production and consolidation in the automotive industry resulting in high levels of utilization of the Company’s resources and capacity. Unfortunately, with insufficient post-merger integration across the acquisitions, inconsistent operational disciplines and a highly leveraged balance sheet, when the volumes declined relative to prior periods, the Company struggled with profitability, especially in the U.S. operations.

Over the last two years, the Company successfully launched the significant backlog of new business, which drove profitability in its international operations and helped strengthen customer relationships. In addition, capital disciplines reduced planned capital expenditures for 2003-2004 from over $500 million to $440 million. The North America region was reorganized, cutting SG&A while strengthening engineering, reducing excess capacity and eliminating redundant overhead costs. Despite the restructuring activities, developments in late 2004 and early 2005 led to a significant decline in the Company’s liquidity position. These developments included the market share and production decline at key North American OEM customers, the rise in steel prices, the termination of accelerated payment programs by certain automakers, higher than anticipated new program launch costs, and the continued underperformance of the North American operations. The complex and restrictive capital structure built during the acquisition years presented a strategic challenge as debt service required cash outflows almost as high as on-going capital expenditures and drove the cost of capital above competitive levels.

The Company’s current challenge is to restructure the domestic U.S. operations under the protection of Chapter 11 while continuing to support its flourishing international business.

Our key strategies are to consolidate our competitive position as a global metal structures leader, strengthen our financial performance for long-term health, drive operational excellence throughout the company, leverage our scale to realize structural improvements and build a global turnaround team.

Recent initiatives implemented by the Company include:

3

The Company believes these and other initiatives will accelerate reductions in operational costs, allow it to leverage economies of scale, and enhance its ability to serve its customers, creditors and shareholders.

Growth Strategy

The Company’s current growth strategy now focuses on cadenced organic growth. Specifically, the Company believes that the following strengths have played, and will continue to play, an important role in achieving the organic growth objectives:

As a result of these competitive strengths and the efforts to increase organic growth, the Company was awarded programs during the past few years that, based on independent estimates of expected program volumes and current expectations of program pricing, represent more than $1.3 billion in new revenues. These programs have either launched in 2003-2004 or will launch by the end of 2005 and have helped further diversify the Company’s customer base. The proportion of revenues from Ford and DaimlerChrysler, the Company’s two largest customers, has decreased from 68 percent in 2000 to 48 percent in 2004. Of the $1.3 billion in new program revenues described above, 26 percent is expected to be derived from Ford and DaimlerChrysler, 20 percent from Nissan, 19 percent from GM, 15 percent from Volvo and 20 percent from other customers including BMW, Hyundai/Kia, VW Group, Toyota, Honda and Fiat.

Industry Trends

The Company’s performance and growth is directly related to certain trends within the automotive market, including the consolidation of the component supply industry and to automotive production levels, which is cyclical and depends on general economic conditions and consumer confidence.

The Company’s strategy is to also capitalize on several important trends in the automotive industry that have benefited Tower Automotive in the past and will continue to benefit it in the future. These trends include:

Continuation of Trend to Larger, More Capable Suppliers. In order to lower costs and improve quality, OEMs have continued to reduce their supply base by awarding sole-source contracts to suppliers who are able to supply greater vehicle content through complex subassemblies. OEMs’ criteria for supplier selection include not only cost, quality and responsiveness, but also design engineering and program management capabilities. As a result, the automotive supply industry has undergone significant consolidation. Furthermore, beginning in 2001, a number of suppliers experienced financial difficulties. These factors have combined to provide an opportunity for further organic growth by obtaining business from smaller or troubled suppliers through providing the scale and broad capabilities that OEMs require.

OEM “Shakeout.” The recent acquisition and consolidation activity among select OEMs has not led to the disadvantage of the smaller OEMs in the industry as previously predicted. Rather, smaller OEMs such as Peugeot, Honda, Hyundai/Kia, BMW and the emerging Chinese automakers have strengthened their position in the industry and their financial performance, while some of the larger OEMs have struggled to successfully integrate acquisitions and manage legacy costs. The Company’s global capabilities have allowed it to continue to serve as a valuable supplier to those smaller producers.

4

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

Growth in Emerging Markets. Countries and regions such as China, Korea, Thailand, India, Mexico and Eastern Europe are expected to experience significant growth in vehicle demand over the next ten years. OEMs are positioning themselves to reach these emerging markets in a cost-effective manner. In order to best meet these OEM requirements, the Company has over 26 manufacturing facilities outside North America, including locations in Germany, Italy, Belgium, Poland, Slovakia, Mexico, Brazil, Korea and China.

Products

The Company produces a broad range of structural components and assemblies, many of which are critical to the structural integrity of a vehicle. The Company’s products generally can be classified into the following categories: body structures and assemblies; lower vehicle frames and structures; chassis modules and systems; and suspension components. A brief summary of each of the principal product categories follows:

Product Category/Description

Body structures and assemblies

Products that form the basic upper body structure of the vehicle and include large metal stampings such as body pillars, roof rails, side sills, parcel shelves and intrusion beams. This category also includes Class A surfaces and assemblies. Class A surfaces include exposed sheet metal components such as body sides, pick-up box sides, door panels and fenders.

Lower vehicle frames and structures

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

Chassis modules and systems

Products include axle assemblies, which consist of stamped metal trailing axles, assembled brake shoes, hoses and tie rods, and front and rear structural suspension modules/systems. These modules/systems consist of control arms, suspension links, value-added assemblies and powertrain modules.

Suspension components

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

Other

The Company manufactures a variety of other products, including heat shields and other precision stampings, for our OEM customers.

5

The following table summarizes the approximate composition by product category of the Company’s global revenues for the last three years:

Customers and Marketing

North American automotive manufacturing has been dominated by GM, Ford, and DaimlerChrysler, but the international automakers continue to expand their production capacity representing approximately 28 percent of North American production in 2004 versus 26 percent in 2003. The Company’s largest customers in North America are Ford, DaimlerChrysler and GM. As a result of past growth strategies, the Company has further expanded its global presence, and has increased penetration into certain existing customers and added programs with customers such as Mercedes, Fiat, BMW, Volkswagen Group, Nissan, Hyundai/Kia, Volvo and Renault.

Following is a summary of the global composition of the Company’s significant customers for the last three years:

Following is a summary of the Company’s sales by geographic region for the last three years follows:

6

The following table presents an overview of the major models for which the Company supplies products:

7

Most of the Company’s products have a lead time of two to five years from product development to production. The selling prices of these products are generally negotiated between the Company and its customers.

Sales of the Company’s products to OEMs are made directly by the sales and engineering teams, located at its technical/customer service centers in Novi, Michigan; Yokohama, Japan; Turin, Italy; Bergisch-Gladbach, Germany; Sao Paolo, Brazil; Seoul, Korea; Changchun and WuHu, China and Hyderabad, India. Through its technical centers, the Company services its OEM customers and manages its continuing programs of product design improvement and development. The Company periodically places engineering colleagues at various customer facilities to facilitate the development of new programs.

8

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

Design, Development and Engineering Support

The Company strives to maintain a technological advantage through targeted investment in product development and advanced engineering capabilities. The Company’s engineering capabilities enable it to design and build high quality, efficient manufacturing systems, processes and equipment and to continuously improve our production processes, systems and equipment. The Company’s manufacturing engineers are located at each of its manufacturing facilities. The Company’s engineering responsibilities range from research and development, advanced product development, product design, testing and initial prototype development, to the design and implementation of manufacturing processes.

Because structural parts must be designed at an early stage in the development of new vehicles or model revisions, the Company is given the opportunity to utilize its product and process engineering competencies early in the vehicle planning process. Advanced development and engineering resources create original engineering designs, computer aided designs, feasibility studies, working prototypes and testing programs to meet customer specifications. The Company’s Hyderabad, India technical center allows for 24 hour engineering capabilities globally, thereby optimizing product design and analysis capabilities, leading to reduced development costs.

Manufacturing

The Company’s manufacturing operations consist primarily of stamping and welding operations, system and modular assembly operations, roll-forming operations, hydroforming operations, associated coating and other ancillary operations.

Stamping involves passing metal through dies in a stamping press to form the metal into three-dimensional parts. The Company produces stamped parts using precision single-stage, progressive and transfer presses, ranging in size from 150 to 4,500 tons, which perform multiple functions to convert raw material into a finished product. The Company continually invests in its press technology to increase flexibility, improve safety and minimize die changeover time.

Stampings that are to be used in assemblies are fed into cell-oriented assembly operations that produce complex, value-added assemblies through the combination of multiple parts that are welded or fastened together. The Company’s assembly operations are performed on either dedicated, high-volume welding/fastening machines or on flexible-cell oriented robotic lines for units with lower volume production runs. The assembly machines attach additional parts, fixtures or stampings to the original metal stampings. In addition to standard production capabilities, the Company’s assembly machines are also able to perform various statistical control functions and identify improper welds and attachments. The Company works continuously with manufacturers of fixed/robotic welding systems to develop faster, more flexible machinery.

The products manufactured by the Company use various grades and thicknesses of steel and aluminum, including high strength hot and cold rolled, galvanized, organically coated, stainless and aluminized steel. The Company also produces exposed sheet metal components, such as exterior body panels. See “Suppliers and Raw Materials.”

OEMs have established quality rating systems involving rigorous inspections of suppliers’ facilities and operations. OEMs’ factory rating programs provide a quantitative measure of a company’s success in improving the quality of its operations. The Company has received quality awards from Ford (Q1) and DaimlerChrysler (Pentastar). The automotive industry has adopted a quality rating system know as QS-16949. Substantially all of the Company’s existing operating facilities in North America and around the world have received QS-16949 certification in compliance with the automotive industry requirements.

9

Competition

The Company operates in a highly competitive, fragmented market segment of the automotive supply industry, with a limited number of competitors generating revenues in excess of $200 million. The number of the Company’s competitors has decreased in recent years and is expected to continue to decline due to supplier consolidation. The Company’s major competitors include: Thyssen-Budd, a subsidiary of Thyssen-Krupp AG; Magna International, Inc. (“Magna”); Dana Corporation; Benteler Automotive; and divisions of OEMs with internal stamping and assembly operations, all of which have substantial financial resources. The Company competes with other competitors in various segments of its product lines and in various geographic markets. The Company views Magna as its strongest competitor across most of the Company’s product lines; however, the Company believes that no single competitor can provide the same range of products and capabilities as the Company across as broad of a geographic range.

The Company principally competes for new business both at the beginning of the development of new models and upon the redesign of existing models. New model development generally begins two to five years before the marketing of such models to the public. Once a supplier has been designated to supply parts for a new program, an OEM usually will continue to purchase those parts from the designated producer for the life of the program, although not necessarily for a redesign. Competitive factors in the market for the Company’s products include product quality and reliability, cost and timely delivery, technical expertise and development capability, new product innovation and customer service. In addition, there is substantial and continuing pressure at the OEMs to reduce costs, including the cost of products purchased from outside suppliers such as the Company. Companies must be able to offset pricing givebacks to customers as well as overall economic cost increases with improved productivity to maintain needed profitability levels.

Suppliers and Raw Materials

The primary raw material used to produce the majority of the Company’s products is steel. The Company purchases hot and cold rolled, galvanized, organically coated, stainless and aluminized steel from a variety of suppliers. The Company employs just-in-time manufacturing and sourcing systems enabling it to meet customer requirements for faster deliveries while minimizing its need to carry significant inventory levels. The price of steel increased significantly during 2004 compared to recent historical periods due to a shortage of certain raw materials necessary to produce steel and increased global demand, primarily in China. The Company purchases a substantial portion of its steel from certain of its customers through the customers’ repurchase programs. The purchases through customer repurchase programs have somewhat mitigated the severity of price increases associated with the procurement of steel. The remainder of steel purchasing requirements is met through contracts with steel producers and market purchases and, in some cases, the Company may be unable to either mitigate increases in steel prices under existing purchasing agreements or pass through any price increases to its customers. Customer agreements generally do not permit an increase in selling prices for increases in raw material inputs.

Other raw materials purchased by the Company include fasteners, tubing, springs, rivets and rubber products, all of which are available from numerous sources.

Colleagues

As of December 31, 2004, the Company had 12,891 colleagues worldwide, of whom 8,043 are covered under collective bargaining agreements, 4,514 in the North America and 3,529 in the international operations. These collective bargaining agreements expire between January 2005 and January 2010. In February 2004, the Company entered into a neutrality agreement with the United Auto Workers Union (“UAW”), which covers six facilities. The neutrality agreement facilitates the organization of these facilities as it provides that the Company will take a neutral position in any organizing efforts by the UAW. Since its inception in 1993, the Company has not experienced any work stoppages as a result of labor issues and considers its relations with its colleagues to be good.

The Company believes that its future success will depend in part on its ability to continue to recruit, retain and motivate qualified personnel at all levels of the Company while competing in an ever increasingly competitive world.

10

Patents and Trademarks

The Company has a limited number of patents worldwide. By the nature of its business, no single patent or group of patents is material to the Company’s business.

The Company has trademarks pertaining to its name, Tower Automotive®, which are registered in various countries, allowing it to market its products on a global basis. This trademark is widely recognized in the global automotive industry.

Backlog

The Company’s products are not sold on a firm backlog basis. The Company does not believe that its backlog of expected product sales covered by issued purchase orders is a meaningful indicator of future sales since orders may be rescheduled or canceled by its customers at any time. Product sales are dependent upon the number of vehicles that the Company’s customers actually produce as well as the timing of such production.

Seasonality

The Company’s business is somewhat seasonal. The Company typically experiences decreased revenues and operating income during the third quarter of each year due to the impact of scheduled OEM plant shut downs in July and August for vacations and new model changeovers. Shut downs by OEMs of approximately a week and a half in December also have a negative impact on revenues and operating income during the fourth quarter of each year.

Environmental Matters

The Company is required to comply with federal, foreign, state and local laws and regulations governing the protection of the environment and occupational health and safety, including laws regulating the generation, storage, handling, use and transportation of hazardous materials; the emission and discharge of hazardous materials into soil, air or water; and the health and safety of its colleagues. The Company is also required to obtain permits from governmental authorities for certain operations. The Company has taken steps to assist in the compliance with the numerous and sometimes complex regulations, such as holding environmental and safety training sessions for representatives from its domestic facilities. The Company has achieved ISO 14001 registration for the majority of its domestic facilities, and has achieved ISO/TS 16949 at eight of its eleven European facilities. The Company is in the process of attempting to achieve ISO registration for certain of its other foreign operations. The Company conducts third party or internal audits for environmental, health, and safety compliance, and uses outside expertise to assist in the filing of permits and reports when required.

Compliance with federal, state and local provisions relating to the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had a material impact on the Company’s capital expenditures, earnings or competitive position. The Company is not currently aware of any significant liability exposure in respect to laws imposing liability for the cleanup of contaminated property to which it may have sent wastes for disposal.

The Company owns properties, which have been impacted by environmental releases. At some of these properties, the Company is liable for costs associated with investigation and/or remediation of contamination in one or more environmental media. The Company is currently actively involved in investigation and/or remediation at several of these locations. At certain of these locations, costs incurred for environmental investigation and/or remediation are being paid partly or completely out of funds placed into escrow by previous property owners. Nonetheless, total costs associated with remediating environmental contamination at these properties could be substantial and may be material to the Company’s financial condition, results of operations or cash flows.

The Company has reserves of $16.3 million to cover estimated environmental liabilities associated with its properties. This amount is based on estimates of expected investigation/remediation costs related to environmental contamination. It is possible, however, that total costs will exceed the environmental reserves established by the Company.

11

2004 Developments

Relocation of Dodge Ram frame assembly to Metalsa joint venture

On February 10, 2004, the Company announced that a decision had been finalized by DaimlerChrysler to move the current production of the frame assembly for the Dodge Ram light truck from the Company’s Milwaukee, Wisconsin facility to the Company’s joint venture partner, Metalsa S. de R.L. (“Metalsa”) located in Monterrey, Mexico. The current Dodge Ram frame program produced in the Milwaukee facility was expected to run through 2009. The production move to Mexico is planned for mid-2005. The net economic impact to the Company of DaimlerChrysler’s decision to move the Dodge Ram frame line has not yet been determined. The Company recognized revenue associated with the Dodge Ram frame program of $205.5 million for calendar year 2004, $211.3 million in 2003 and $169.6 million in 2002.

Acquisition of remaining shares of Seojin Industrial Company

Effective February 27, 2004, Tower Automotive acquired all of the remaining outstanding shares of Seojin Industrial Company Ltd., or “Seojin,” of South Korea. Previously, the Company held a 66% equity interest in Seojin, a supplier of frames, modules and structural components to the Korean automotive industry. The acquisition of the remaining shares was related to the settlement of an outstanding note from the minority interest partner and was financed by Seojin through additional borrowings of approximately $10.3 million from South Korean lenders. Seojin is headquartered in Gunpo City and has eight manufacturing facilities and 1,300 employees across South Korea. Seojin is a major supplier to Hyundai and Kia, two OEMs that have been gaining market share worldwide. The acquisition of the remaining interest in Seojin will allow Tower Automotive to further leverage this relationship and improve Seojin’s return on invested capital. Seojin has been consolidated in the Company’s financial statements. Seojin had sales of approximately $318.0 million in 2004, $295.9 million in 2003 and $274.1 in 2002.

Sale of equity interest in Yorozu Corporation

On March 11, 2004, Tower Automotive sold its 30.76% equity interest in Yorozu Corporation of Japan back to Yorozu through a share buy-back transaction on the Tokyo Stock Exchange. The Company received proceeds of approximately $51.7 million from this transaction, using the net proceeds to finance tooling purchases and other capital expenditures. Tower Automotive had been a major shareholder in Yorozu beginning in September 2000, when it purchased a 17% equity interest. An additional 13.76% equity interest was purchased in February 2001. The divestiture of Yorozu was driven by the need to improve liquidity during the intense launch phase of the Company.

Debt transactions

On May 24, 2004, the Company issued 5.75% convertible senior debentures (the “Convertible Debentures”) in the total amount of $125.0 million and entered into a new senior secured credit facility, consisting of a $50.0 million revolving credit facility, a $375.0 million term loan and a $155.0 million letter of credit facility. The Company repaid its old senior credit facility in the amount of $239.5 million from the net proceeds of the offering of the debentures and from a portion of the borrowings under the new senior credit facility. A portion of the borrowings under the new senior credit facility were used to redeem $200.0 million of 5% convertible subordinated notes due August 1, 2004 at a redemption price of 100.714% of the aggregate principal amount plus accrued and unpaid interest through the redemption date.

The Company borrowed the entire $50.0 million available under the new revolving credit facility at closing, and as of December 31, 2004, no amounts were available for borrowing under that facility.

In February 2005, in conjunction with our Chapter 11 filing, Tower Automotive entered into a DIP Financing Agreement. Certain proceeds of the DIP Financing Agreement were used to refinance the $50.0 million of borrowings pertaining to the above mentioned revolving credit facility and $375.0 million associated with the above mentioned $375.0 million term loan.

12

Special meeting of stockholders

On September 20, 2004, a special stockholders meeting was conducted where the stockholders ratified and approved the issuance of $125.0 million principal amount of the Convertible Debentures and the related shares of common stock issuable upon conversion or repurchase of the Convertible Debentures. This stockholder approval provided the Company with the option of issuing shares of common stock in lieu of paying cash for the cash payment component of the conversion price or redemption price of the Convertible Debentures.

Accounts receivable securitization

On December 30, 2004, R. J. Tower Corporation (“R. J. Tower”), Tower Automotive ASC, L.L.C., a qualifying special purpose entity (“QSPE”) and a 100% owned subsidiary of R. J. Tower, and a lender entered into a $50.0 million accounts receivable securitization facility. This facility became unavailable on February 2, 2005, the date on which Tower Automotive, Inc. and its U.S. subsidiaries filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. See Note 6 to the Consolidated Financial Statements.

Exit or Disposal Activities

On April 15, 2005, the Company committed to a plan to close its Belcamp, MD, Bowling Green, KY and Corydon, IN facilities. In addition, as a result of the closing of the Corydon, IN facility, the Company will reduce the number of employees at its Granite City, IL facility. These actions will result in the elimination of approximately 800 positions. Total estimated costs associated with these actions amount to approximately $63.4 million. The facilities expected to cease production by June 30, 2005. These operational restructuring initiatives are designed to reduce excess capacity and associated costs and improve overall efficiency.

Item 2. Properties.

The Company’s operations are conducted in both owned and leased facilities. The Company believes that these facilities are suitable and adequate for its activities as currently conducted. The principal facilities in which the Company’s operations are currently conducted are as follows:

13

The facilities were specifically designed for the manufacturing of the Company’s products. The utilization of such facilities is dependent upon the mix of products produced and the timing of the supply requirements pertaining to product programs from the customers.

Item 3. Legal Proceedings.

From time-to-time, the Company is subject to claims or litigation incidental to our business. The Company is not currently involved in any legal proceedings that, individually or in the aggregate, are expected to have a material effect on our business, financial condition, results of operations or cash flows.

As indicated in Note 2 to the Consolidated Financial Statements and in Item 1, “Business” of this Form 10-K, on February 2, 2005, Tower Automotive, Inc. and its 25 United States subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court Southern District of New York. The cases are jointly consolidated for administrative purposes as Case No. 05-10578 (ALG). As a result of the commencement of the Chapter 11 proceedings by the Debtors, an automatic stay has been imposed against the commencement or continuation of legal proceedings against the Debtors outside of the Bankruptcy Court. Claimants against the Debtors may assert their claims in the Chapter 11 proceedings by filing a proof of claim, to which the Debtors may object and seek a determination from the Bankruptcy Court as to the allowability of the claim. Claimants who desire to liquidate their claims in legal proceedings outside of the Bankruptcy Court will be required to obtain relief from the automatic stay by order of the Bankruptcy Court. If such relief is granted, the automatic stay will remain in effect with respect to the collection of liquidated claim amounts. Generally, all claims

14

against the Debtors that seek a recovery from assets of the Debtors’ estates will be addressed in the Chapter 11 proceedings and paid only pursuant to the terms of a confirmed plan of reorganization.

See Item 10. “Directors and Executive Officers of the Registrant,” under the caption, “Legal Proceedings,” for information on litigation associated with the Company’s bankruptcy involving the Company’s officers.

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

No matters were submitted to a vote of security holders during the fourth quarter of 2004.

PART II

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

The Company’s common stock traded on the New York Stock Exchange (“NYSE”) under the symbol “TWR.” until February 2, 2005. The following table sets forth, for the periods indicated, the high and low closing sale prices of the Company’s common stock on the NYSE.

On February 3, 2005, the NYSE suspended trading of the Company’s common stock and delisted its common stock shortly thereafter. On February 7, 2005, the Company’s common stock commenced trading over the counter on the “Pink Sheets” under the symbol “TWRAQ.”

The last reported sale price of the common stock on February 28, 2005 on the Pink Sheets was $0.26. As of February 28, 2005, there were 2,637 holders of record of the Company’s outstanding common stock.

Dividend policy and restrictions

Since the Company’s formation in April 1993, it has never paid any cash dividends. The Company’s DIP Agreement prohibits it from paying cash dividends.

Equity Repurchases

The Company did not repurchase any equity securities during the fourth quarter of 2004.

15

Item 6. Selected Financial Data.

The following table sets forth the Company’s summary historical consolidated financial data for each of the years in the five-year period ended December 31, 2004, which were derived from the Company’s consolidated financial statements. The Company’s consolidated financial statements as of and for the years ended December 31, 2004, 2003 and 2002 have been audited by Deloitte & Touche LLP, independent registered public accounting firm, and the Company’s consolidated financial statements as of December 31, 2001 and 2000 and for the two year period ended December 31, 2001 were audited by Arthur Andersen LLP, independent auditors. The consolidated financial statements as of December 31, 2004 and 2003 and for each of the years in the three-year period ended December 31, 2004 and the Reports of Independent Registered Public Accounting Firm thereon are included elsewhere in this report. The consolidated financial statements as of and for the years ended December 31, 2001 and 2000 are not included herein. This selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Results of Operations and Financial Condition” and the Company’s Consolidated Financial Statements and Notes to Consolidated Financial Statements, included elsewhere in this report.

(2) Includes $258.8 million due to Tower Automotive Capital Trust, or “Trust.” In June 1998, the Trust sold $258.8 million in aggregate liquidation preference of 6 3/4% Trust Convertible Preferred Securities (the “Trust Preferred Securities”). The sole assets of the Trust are approximately $266.8 million in aggregate principal amount of the Issuer’s 6 3/4% convertible subordinated debentures due June 30, 2018, such amount being the sum of the stated liquidation preference of the Trust Preferred Securities and the capital contributed by the Issuer in exchange for the common securities of the Trust. During the third quarter of 2003, the Company elected to adopt the current provisions of FASB Interpretation Number (FIN) 46, Consolidation of Variable Interest Entities, an interpretation of ARB No. 51 as it relates to the Trust Preferred Securities, prior to the required effective date. Under FIN 46, the

16

Trust, which was previously consolidated by the Company, is no longer consolidated. As a result, Tower Automotive no longer presents the Trust Preferred Securities as mezzanine financing, but instead records a debt obligation for the proceeds, which are owed to the Trust by the Company. Interest is recorded at 6 3/4% on the amount owed by the Issuer to the Trust, which is equal to the amount that was previously presented as minority interest (net of tax) for the amounts paid on the Trust Preferred Securities. Interest expense increased by $8.8 million in each of 2003 (representing six months of interest) and by $8.8 million for the six months ended June 30, 2004 related to this reclassification. Pursuant to the guidance in FIN 46, the Issuer has not reclassified the presentation in prior periods.

NOTE: On February 2, 2005, Tower Automotive, Inc. and its U.S. subsidiaries filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. The selected financial data set forth above does not reflect the Chapter 11 filing.

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

Going Concern

Effective February 2, 2005, Tower Automotive, Inc. and 25 of its U.S. subsidiaries (collectively the “Debtors”) are operating pursuant to Chapter 11 under the Bankruptcy Code and continuation of the Company as a going concern is contingent upon, among other things, the Debtors’ ability: (i) to comply with the terms and conditions of the DIP financing agreement described in Note 10 to the Consolidated Financial Statements; (ii) to obtain confirmation of a plan of reorganization under the Bankruptcy Code; (iii) to reduce unsustainable debt and simplify the Company’s complex and restrictive capital structure through the bankruptcy process; (iv) to return to profitability; (v) to generate sufficient cash flow from operations to fund working capital and debt service requirements; and (vi) to obtain financing sources to meet the Company’s future obligations. These matters create uncertainty regarding the Company’s ability to continue as a going concern.

Overview

The Company produces a broad range of assemblies and modules for vehicle frames, upper body structures and suspension systems for the global automotive industry. Including 100% owned subsidiaries and investments in joint ventures, the Company has production and engineering facilities in the United States, Canada, Mexico, Germany, Belgium, Italy, Slovakia, Poland, France, Spain, Brazil, India, South Korea, Japan and China.

The Company’s products are manufactured utilizing steel and various purchased steel assemblies. The price of steel increased significantly during 2004 compared to recent historical periods due to a shortage of certain raw materials necessary to produce steel and increased global demand, primarily in China. The Company purchases a substantial portion of its steel from its customers through certain customers’ repurchase programs. The purchases through customers’ repurchase programs have somewhat mitigated the severity of price increases associated with the procurement of steel. The remainder of the Company’s steel purchasing requirements is met through contracts with steel producers and market purchases. Prices associated with such purchases increased rapidly during 2004. The Company’s agreements with its customers generally do not permit the Company to increase selling prices for increases in prices of raw material inputs. Steel price increases during 2004 reduced gross margin by $46.1 million.

While steel price increases have abated, and in some cases decreased, the Company expects that higher overall steel prices in 2005, relative to average prices in 2004, will have an adverse impact on the Company. The Company is pursuing several initiatives to mitigate the impact of such raw material price increases on its results of operations. Such initiatives include moving more steel purchases to customer repurchase programs, pursuing selling price increases from customers and reducing other operating costs, among other initiatives. The Company can provide no assurances that such initiatives will be successful. During 2004, the Company realized approximately $39.1 million in steel price increase recoveries from certain foreign customers.

Reductions in North American automobile production, primarily during the second half of 2004, had an adverse impact on the Company’s revenues and operating results. North American automobile production declined by 239,937 units, or 3.5%, during 2004 in comparison to 2003. This decline was partially offset by an increase of 198,143 units, or 2.1%, in North American truck production. Two major customers of the Company, Ford Motor Company (“Ford”) and General Motors Corporation (“GM”), cut overall production levels in 2004 by 243,355 units (6.5%) and 309,759 units (5.8%), respectively, in comparison to 2003. During 2004, Ford had its lowest production year in 12 years, and General Motors produced less than 5.0 million vehicles for the first time since 1998. The Company expects depressed levels of North American automobile production to continue into 2005. Also, relatively high fuel prices are expected to have an adverse impact on North American truck production. The Company’s relatively high concentration of revenues associated with large vehicle platforms exposes the Company to a significant adverse impact from reductions in OEM production levels of these vehicles.

The Company’s gross margins have been declining since 1999. Generally, the Company’s customers require the reduction of selling prices of the Company’s products for each year during the respective lives of such product programs, generally five to seven years. The Company’s ability to improve its profit margins is directly linked to its ability to more than offset these price reductions with reduced operating costs. During 2004, net selling price reductions reduced gross profit by $21.4 million in comparison to 2003.

17

The number of new vehicle launches also impacts the Company’s gross margins. The Company’s operating costs are higher during a product launch period relative to when the vehicle has reached normal production volumes. In addition, the Company’s gross margins are impacted by the commercial success of the vehicles to which the Company is a supplier, general global economic conditions and vehicle production volumes as mentioned above. During 2004, the Company was adversely impacted by a significant amount of new product launch activity compared to 2003. These launches, which are significant both in terms of number and relative size, reduced gross profit by $14.2 million in 2004 in comparison to 2003. In addition, general economic conditions, such as labor costs and health care, reduced gross profit by $15.4 million in 2004 compared to 2003.

To address the deterioration in operating performance, management has initiated plans to: (a) centralize and standardize processes which were previously performed on a decentralized basis, including purchasing, customer quoting and product costing, product engineering and accounting; (b) rationalize and reduce capital expenditures to more closely align capital spending with expected product returns; (c) use centralization and standardization to leverage cost improvement ideas across the Company’s operating facilities globally; (d) pursue recoveries of significant steel price increases; and (e) a number of other cost reduction initiatives. If the Company is not successful in implementing these actions, the Company may continue to experience declining gross margins.

On February 10, 2004, the Company announced that a decision had been finalized by DaimlerChrysler to move the current production of the frame assembly for the Dodge Ram light truck from the Company’s Milwaukee, Wisconsin facility to the Company’s 40% owned joint venture partner, Metalsa located in Monterrey, Mexico. The current Dodge Ram frame program produced in the Milwaukee facility was expected to run through 2009. In June 2005, production ceased on the Dodge Ram light truck frame at the Company’s Milwaukee, Wisconsin facility. The Company leased a significant portion of the equipment utilized to produce the Dodge Ram light truck frame and notice of rejection of these leases was filed with the Bankruptcy Court in June 2005. In June 2005, the Company recorded its estimate of rejection damages associated with the Lessor’s pre-petition claim of approximately $75 million, but the actual rejection damages are not known at this time. Except for the costs associated with the lease rejection, the Company does not expect to incur additional material costs associated with the customer’s decision to move the Dodge Ram light truck frame production

For a more detailed description of other factors that have had, or may in the future have, a significant impact on the Company’s business, please refer to “Forward Looking Statements”, “Market Risks” and “Opportunities” contained in this Management’s Discussion and Analysis for insight on opportunities, challenges and risks, such as those presented by known material trends and uncertainties, on which the Company’s management is most focused for both the short term and long term, as well as actions management is taking to address these opportunities, challenges and risks.

Critical Accounting Policies

The Company’s discussion and analysis of its financial condition and results of operations is based upon its consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect amounts reported in those statements. The Company has made its best estimates of certain amounts contained in these consolidated financial statements. However, application of the Company’ accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ materially from these estimates. Management believes that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest impact on the consolidated financial statements and require assumptions that can be highly uncertain at the time the estimate is made.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities.

The following represents a summary of the Company’s critical accounting policies that require management’s most difficult and subjective judgments.

18

Goodwill—Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”) requires that no amortization be recognized in relation to goodwill. However, SFAS No. 142 requires a test for impairment of goodwill to be performed annually or immediately if conditions indicate that impairment may exist. The evaluation of the Company’s reporting units in relation to impairment testing requires significant judgments and estimation. The Company conducts formal valuation procedures utilizing a combination of valuation techniques including the discounted cash flow approach and the market multiple approach with the assistance of a third party specialist. Events or changes in business circumstances may indicate that the carrying value pertaining to goodwill may not be recoverable. As a result of such an indication, a significant charge may be required in the Company’s Statement of Operations. In the fourth quarter of 2004, the Company recognized a goodwill impairment charge of $337.2 million in the United States/Canada operating unit in accordance with SFAS 142. This charge was precipitated by declining estimates of forecasted results and cash flows given current economic and market conditions within the automotive supplier industry. Upon adoption of SFAS 142 during the second quarter of 2002, the Company recorded a transitional impairment loss of $112.8 million, representing the write-off of all of the Company’s existing goodwill in the reporting units of Asia ($29.7 million) and South America/Mexico ($83.1 million). The Company recognized no impairment charges for the year ended December 31, 2003. On December 31, 2004 and 2003, goodwill amounted to $174.6 million and $498.7 million, respectively, on the Company’s Consolidated Balance Sheets.

Income Taxes — The Company is required to make estimates of provision (benefit) for income taxes, as applicable, in each tax jurisdiction in which the Company operates. This process incorporates an assessment of current taxes payable and/or receivable with temporary differences between the tax bases of assets and liabilities and the corresponding reported amounts in the financial statements. These differences result in deferred tax assets and deferred tax liabilities included in the Company’s Consolidated Balance Sheets. The Company has total net deferred tax assets (liabilities) of $(11.3) million and $167.1 million, respectively, at December 31, 2004 and 2003, which are inclusive of deferred tax valuation allowances of $306.8 million and $60.1 million, respectively. The Company is required to estimate whether recoverability of its deferred tax assets are more likely than not based on forecasts of taxable earnings in each tax jurisdiction. As disclosed in Note 11 to the Consolidated Financial Statements, a large portion of the Company’s deferred tax assets are comprised of net operating loss carryforwards and tax credits. The Company uses historical and projected future operating results, including a review of the eligible carryforward period, tax planning opportunities and other relevant considerations in determining recoverability. Key factors that could affect the determination of the need for a deferred tax valuation allowance include variances to future projected profitability and tax law changes.

Reserves — The Company has recognized accruals in relation to restructuring reserves and purchase accounting reserves, which require the use of estimates and judgment regarding risk, loss exposure and ultimate liability. Reserves for restructuring activities are estimated primarily for activities associated with the discontinuation and consolidation of certain of the Company’s operations. Reserves for loss contracts are estimated by determining which products are being sold pursuant to loss contracts, the estimated loss per unit and expected sales volumes over the life of each contract. Other reserves are estimated using consistent and appropriate methods based upon estimated risk and loss exposure. Changes to these assumptions and estimates could materially affect the recorded liabilities and related loss. Favorable adjustments to the Company’s loss contract reserves of approximately $7.0 million during the year ended December 31, 2002, were recorded to reflect the discontinuance of certain contracts that the Company was fulfilling at a loss, and the reduction of costs associated with remaining loss contracts which were transferred to lower cost locations as part of the Company’s restructuring activities. See Notes 7 and 9 to the Consolidated Financial Statements.

Impairment and Depreciation of Long-Lived Assets – The Company’s long-lived assets, excluding goodwill, are reviewed for impairment whenever adverse events or changes in circumstances indicate a possible impairment. An impairment loss is recognized when the carrying value of the long-lived assets exceeds its fair value. Significant judgments and estimates used by management when evaluating long-lived assets for impairment include:

-An assessment as to whether an adverse event or circumstance requires an impairment review; and

-Undiscounted future cash flows generated by the asset.

19

In addition, the Company follows its established accounting policy for estimated useful lives of long-lived assets. This policy is based upon significant judgments and estimates as well as historical experience. Actual future experience with those assets may indicate different useful lives resulting in a significant impact on depreciation expense contained in the Company’s Statements of Operations.

Pension and Other Post-Retirement Benefits — The determination of the obligation and expense for pension and other postretirement benefits is dependent on the selection of certain assumptions used by actuaries in calculating such amounts. Those assumptions are described in Note 13 to the Consolidated Financial Statements and include, among others, the discount rate, expected long-term rate of return on plan assets, as well as expected increases in compensation and healthcare costs. In accordance with generally accepted accounting principles, actual results that differ from these assumptions are accumulated and amortized over future periods and therefore, in the U.S., generally affect the recognized expense and recorded obligation in such future periods. While the Company believes that its current assumptions are appropriate based on available information, significant differences in the actual experience or significant changes in the assumptions may materially affect the pension and other postretirement obligations and the future expense.

The Company recorded pension expense in relation to its defined benefit pension plans of $18.8 million, $21.1 million and $20.9 million for 2004, 2003 and 2002, respectively. The Company recorded other post-retirement benefit costs of $14.2 million $15.2 million and $10.5 million for 2004, 2003 and 2002, respectively. These amounts are calculated based on a number of actuarial assumptions, most notably the discount rates used in the calculation of the Company’s pension benefit obligations of 5.50%, 5.95% and 6.75% and the discount rates used in the calculation of the Company’s post-retirement benefit obligations of 5.00%, 5.95% and 6.75% as of the Company’s September 30 measurement date in 2004, 2003 and 2002, respectively. The discount rates used by the Company are developed based on consultation with the Company’s actuary and reflects the construction of a hypothetical portfolio of high quality instruments with maturities that mirror the timing and amounts of future benefits.

The expected rate of return on pension plan assets under SFAS 87 of 8.5% as of December 31, 2004 and 2003 is based on consultation with the Company’s actuary and represents the Company’s expected long-term rate of return on plan assets. The rate of return assumptions selected by the Company reflect the Company’s estimate of the average rate of earnings expected on the funds invested or to be invested in order to provide for future participant benefits to be paid out over time. As part of this estimate, the Company’s actuary contemplated the composition of the actual investment policies of the Company as well as the expected long-term rates of return for the various categories of investment vehicles within the plans.

The expected rate of compensation increase reflects actual experience, the long term outlook and estimated inflation.

Results of Operations

Year Ended December 31, 2004 Compared to the Year Ended December 31, 2003

Revenues. Revenues for 2004 increased by $363.0 million, or 12.9%, to $3.18 billion from $2.82 billion during 2003. Higher volume and favorable product mix increased revenues by $275.1 million while foreign exchange effects increased revenues by $70.2 million. In addition, steel price recoveries from certain foreign customers exceeded net selling price reductions by $17.7 million.

Gross Profit and Gross Margin. Gross margin was 7.1% in 2004 compared to 9.0% for 2003. Gross profit declined by $29.4 million, or 11.5%, to $225.7 million during 2004 compared to $255.1 million during 2003. The decreases in gross margin and gross profit were primarily attributable to increased costs associated with the Company’s product launch activities of $14.2 million and higher operating expenses of $71.9 million, which includes the effects of higher material costs, primarily steel ($46.1 million), higher health care expenses ($10.4 million) and general adverse economic conditions (i.e. general labor rate increases, higher energy costs, etc.) impacting the Company ($15.4 million). In addition, the Company recognized $3.6 million in property, plant and equipment write offs and $12.7 million of additional expenses associated with insurance accruals and certain leases. These declines were partially offset by operating efficiencies of $4.8 million, favorable foreign currency effects of $6.0 million, volume and product mix effects of $44.5 million and steel price recoveries from certain foreign customers exceeding net selling price reductions by $17.7 million.

20

Selling, General and Administrative Expenses. Selling, general and administrative expenses declined by $10.3 million, or 6.6%, to $145.2 million during 2004 from $155.5 million in 2003. Selling, general and administrative expenses represented 4.6% of revenues during 2004 compared to 5.5% during 2003. The decline is primarily attributable to lower expenses resulting from the Company’s 2003 Restructuring Plan involving the Company’s corporate consolidation activities.

Goodwill Impairment Charge. During the fourth quarter of 2004, the Company recognized a goodwill impairment charge of $337.2 million. There was no tax impact associated with this charge because the Company recognized a valuation allowance in relation to that impact. This charge was precipitated by declining estimates of forecasted results and cash flows given current economic and market conditions within the automotive suppler industry.

Operating Loss. Operating loss increased by $198.1 million to $256.1 million in 2004 from $58.0 million in 2003. The increase in operating loss for 2004 was attributable to the decline in gross profit of $29.4 million and the goodwill impairment charge of $337.2 million, which were partially offset by the lower selling, general and administrative expenses of $10.3 million and the decline in restructuring and asset impairment charges of $158.2 million.

Interest Expense, Net. Interest expense, net increased by $49.2 million, or 53.1%, to $142.0 million for 2004 from $92.7 million in 2003. The increase was attributable to: (i) increased interest of $14.0 million related to the 12% senior notes issued in June 2003; (ii) $8.8 million related to the Trust Preferred Securities, which was recorded as minority interest during the first six months of 2003; (iii) the write off of deferred financing fees of $3.3 million related to debt repaid in the second quarter of 2004; (iv) $1.4 million associated with a call premium pertaining to $200 million convertible subordinated notes, which were repaid in June 2004; (v) $4.8 million attributable to the 5.75% Convertible Debentures issued in May 2004; (vi) $17.6 million attributable to the Company’s $375 million term loan and $50 million revolver borrowing associated with the credit agreement entered into in May 2004 (vii) $3.2 million pertaining to a decrease in capitalized interest during 2004; (viii) $1.0 million associated with an increase in the amortization of deferred financing costs; and (ix) a decline in interest income in the amount of $0.5 million. These expenses were partially offset by $5.0 million in relation to interest savings associated with the repayment of 5.0% convertible subordinated notes, which were repaid in May 2004 and $0.4 million in relation to a decrease in foreign interest expense.

Unrealized Gain on Derivative. The Company recognized an unrealized gain on derivative of $3.9 million during 2004. The embedded conversion option associated with the 5.75% Convertible Debentures, issued in May 2004, was required to be bifurcated from the host debt contract. This bifurcated derivative was being marked to market during the period of May 24, 2004 through September 19, 2004. On September 20, 2004, the Company’s stockholders approved the issuance of the Convertible Debentures and the associated shares of common stock, thereby, eliminating the characterization of the embedded conversion option as a derivative and no longer requiring mark to market adjustments. See Note 10 to Consolidated Financial Statements.

Provision (Benefit) for Income Taxes. The Company recognized a provision for income taxes amounting to $157.1 million for 2004 compared to the recognition of a benefit for income taxes in the amount of $50.8 million in 2003. The provision for income taxes, despite a pre tax loss, resulted primarily from an increase to the Company’s valuation allowance associated with the Company’s deferred tax assets in the amount of $218.0 million, the recognition of foreign income taxes in the approximate amount of $7.9 million and $70.7 million relating to a certain portion of the goodwill impairment charge not being deductible for tax return purposes. The above- mentioned amounts were partially offset by the benefit related to the statutory tax rate applied to the Company’s pre tax loss resulting in a tax benefit of $137.9 million. The effect of other permanent differences resulted in a $1.6 million tax benefit.

Write-Down of Joint Venture Investment to Market Value. The Company’s results of operations for 2003 were adversely affected by an impairment charge of $27.4 million in relation to the Company’s investment in Yorozu.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures increased by $0.1 million in 2004 to $13.4 million in 2004 from $13.3 million during 2003. The increase primarily resulted from the Company’s share of earnings from its joint venture interest in Metalsa in the amount of $4.3 million more than offsetting a decline in the Company’s share of earnings from its joint venture interest in Yorozu in the amount of $4.2 million. The Company sold its investment in Yorozu in March 2004. See Note 8 to the Consolidated Financial Statements.

21

Minority Interest. Minority interest declined by $4.9 million, or 45.9%, to $5.8 million in 2004 from $10.6 million in 2003. The year 2003 included dividends, net of income tax benefit on the Company’s Trust Preferred Securities, in the amount of $5.8 million, which is now classified as interest expense. This decrease was partially offset by an increase of $0.9 million associated with improved earnings at Tower Golden Ring.

Gain on Sale of Joint Venture, Net of Tax. The gain on sale of joint venture of $9.7 million for 2004 represents the Company’s sale of its 30.76% ownership interest in Yorozu. See Note 8 to the Consolidated Financial Statements.

Net Loss. The Company recognized a net loss of $533.9 million, or $9.19 per basic and diluted share, in 2004 compared to the recognition of a net loss of $124.7 million, or $2.20 per basic and diluted share for 2003. The $409.2 million increase in net loss for 2004 primarily reflected the goodwill impairment charge, the increase in interest expense, net and the recognition of a provision for income taxes in the amount of $157.1 million in 2004 compared to the benefit for income taxes in the amount of $50.8 million recognized in 2003.

Year Ended December 31, 2003 Compared to the Year Ended December 31, 2002

Revenues. Revenues for the year ended December 31, 2003 were $2,815.7 million, a 2.2% increase, compared to $2,754.5 million for the year ended December 31, 2002. The $61.2 million increase was composed of positive foreign exchange rate effects in Europe and Asia of $75.9 million, offset by a decline in revenues of $12.3 million attributable to the sale of the Iwahri, Korea plant, which occurred during the first quarter of 2002, and $10.4 million attributable to pricing and economic conditions. In addition, net volume increased $8.0 million, primarily in the platforms of Dodge Ram, GM Cadillac CTS, Ford F-Series and Lincoln SUV and various Nissan, Volkswagen and Hyundai/Kia platforms which were offset by volume decreases primarily in the Dodge Dakota/Durango series, Chrysler LH and Concorde platforms and the Ford Explorer, Focus and Taurus platforms. While net volume increased $8.0 million, the Company experienced a $32.9 million decrease in value-added revenue platforms, which was offset by a non-value-added module assembly revenue increase of $40.9 million.

Gross Profit and Gross Margin. Cost of sales as a percent of total revenues for the year ended December 31, 2003 was 90.9% compared to 89.1% for the year ended December 31, 2002. Gross margin for 2003 was 9.1% compared to 10.8% in 2002. Gross profit decreased $43.0 million from $298.1 million in 2002 to $255.1 million in 2003 and is attributable to the combined effects of: (i) $10.4 million in a negative profit effect of pricing and cost economics, (ii) increased health care costs of $3.3 million, (iii) $25.0 million of additional launch costs related primarily to new programs launched for Volvo, Ford, Nissan and GM, (iv) lease expense of $4.7 million not present in the 2002 period, (v) $14.8 million decline in gross profit on value-added revenue decreases, offset by (vi) $6.9 million in positive foreign exchange rate effects on gross profit, (vii) $1.2 million increase in gross profit on non-value added module assembly revenues and (viii) $7.1 million in operational performance improvements in 2003.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $155.5 million, or 5.5% of revenues, for the year ended December 31, 2003 compared to $143.8 million, or 5.2 % of revenues, for the year ended December 31, 2002. The $11.7 million increase in expense is due to increased compensation related expenses of $7.7 million due primarily to executive leadership retirement and recruitment costs of $4.4 million, increased legal and professional costs of $1.2 million, and increased program management costs of $2.8 million related to engineering and support activities.

Operating Income (Loss). An operating loss in the amount of $58.0 million was recognized in 2003 compared to the recognition of operating income amounting to $93.1 million for 2002. The operating loss was attributable to a $96.4 million increase in restructuring and asset impairment charges described below, the $43.0 million decline in gross profit and the $11.7 million increase in selling, general and administrative expenses.

Interest Expense, net. Interest expense, net of interest income, for the year ended December 31, 2003 was $92.7 million compared to $70.3 million for the year ended December 31, 2002. The $22.4 million increase in net interest expense is attributable to (i) increased interest of $17.2 million related to the $258.8 million senior notes issued in June 2003 (ii) $9.0 million related to the Trust Preferred Securities which was previously recorded as minority interest, and (iii) an increase of $1.4 million due to higher short-term rates, offset by (iv) decreased interest costs of $2.2 million due to decreased revolver borrowings during 2003 compared to 2002 and (v) increased capitalized interest on construction projects in the 2003 period of $3.0 million.

22

Income Taxes. The effective income tax (benefit) rate was (33.7) % and 35.0% in 2003 and 2002, respectively. The effective income tax (benefit) rates reflect the actual rates in the tax jurisdictions in which the Company operates, adjusted for permanent differences.

Write-down of Joint Venture Investment to Market Value, net. Prior to the fourth quarter of 2003, the Company had determined that its investment in Yorozu had not suffered an other than temporary decline in market value. This determination was based on the strategic nature of the investment, which supported the Company’s original investment decision and the fact that the Company believed that there was a significant premium associated with the large block of stock held in Japan. During the fourth quarter of 2003, the Company reevaluated the strategic nature and current intent of its investment in Yorozu. As a result, the Company recorded an impairment charge of $27.4 million to record the investment at the December 31, 2003 traded value on the Tokyo Stock Exchange.

Equity in Earnings of Joint Ventures, net. Equity in earnings of joint ventures, net of tax, was $13.3 million and $16.8 million for the years ended December 31, 2003 and 2002, respectively. These amounts represent the Company’s share of the earnings from its joint venture interests in Metalsa, Yorozu and DTA Development. The Company’s share of joint venture earnings in Metalsa decreased by $6.0 million in the 2003 period, partially offset by increases during the 2003 period in the Company’s share of joint venture earnings in DTA and Yorozu of $0.1 million and $2.4 million, respectively.

Minority Interest, net. Minority interest, net of tax, was $10.6 million and $15.8 million for the years ended December 31, 2003 and 2002, respectively. Minority interest in the 2003 period represents the minority interest held by the 40 percent joint venture partners in Tower Golden Ring and dividends, net of income tax benefits, on the Trust Preferred Securities, through June 2003. Minority interest in the 2002 period represents dividends, net of income tax benefits, on the Trust Preferred Securities and the minority interest held by the 40 percent joint venture partners in Tower Golden Ring. The decrease is due to the adoption of FASB Interpretation No. (FIN) 46 during the third quarter of 2003, which requires the dividends previously recorded as minority interest to be classified as interest expense.

Cumulative Effect of a Change in Accounting Principle, net. The Company adopted Statement of Financial Accounting Standards (SFAS) No. 142 relating to the accounting for goodwill and other intangible assets as of January 1, 2002. Under SFAS No. 142, the Company designated four reporting units: 1) United States/Canada, 2) Europe, 3) Asia and 4) South America/Mexico. During the second quarter of 2002, the Company completed its formal valuation procedures under SFAS No. 142, utilizing a combination of valuation techniques including the discounted cash flow approach and the market multiple approach. As a result of this valuation process as well as the application of SFAS No. 142, the Company recorded a transitional impairment loss of $112.8 million, representing the write-off of all of the Company’s existing goodwill in the reporting units of Asia ($29.7 million) and South America/Mexico ($83.1 million). The write-off was recorded as a cumulative effect of a change in accounting principle in the Company’s Consolidated Statement of Operations for the year ended December 31, 2002. There was no tax impact since the Company recorded a $24.2 million tax valuation allowance for the deductible portion of the goodwill written off in the reporting unit of South America/ Mexico. The Company determined that it was appropriate to record a valuation allowance against the entire amount of the $24.2 million deferred tax asset recognized in adopting SFAS No. 142, given the uncertainty of realization and the lack of income in the reporting unit. The Asia goodwill was not deductible for tax purposes.

RESTRUCTURING AND ASSET IMPAIRMENT

On April 15, 2005, the Company committed to a plan to close its Belcamp, MD, Bowling Green, KY and Corydon, IN facilities. In addition, as a result of the closing of the Corydon, IN facility, the Company will reduce the number of employees at its Granite City, IL facility. These actions will result in the elimination of approximately 800 positions. The facility closures are expected to be completed by June 30, 2005. These operational restructuring initiatives are designed to reduce excess capacity and associated costs and improve overall efficiency.

Total estimated costs associated with these actions amount to approximately $63.4 million, which is comprised of employee termination benefits of $3.8 million, asset impairment charges of $32.1 million, related lease costs of $25.0 million and other costs of $2.5 million. Future cash expenditures for these actions are estimated at $4.5 million. These amounts do not include approximately $4.7 million of cash expenditures to be incurred for training and relocation of colleagues and equipment. These costs are contained in the North America operating segment.

23

On October 28, 2004, the Company committed to a plan to consolidate the stamping operations of its Gunpo, Korea facility (“Gunpo”) into its Hwasung, Korea plant (“Hwasung”) and to move welding operations from Gunpo to Hwasung and the Company’s facility in Shiwha, Korea. These actions were taken for the purpose of reducing future operating costs and are expected to be completed by March 2006. Total estimated costs associated with these actions amount to approximately $1.2 million, which is contained in the International operating segment. These costs involve cash expenditures in the amount of $0.5 million and non-cash asset impairment charges in the amount of $0.7 million.

During the third quarter of 2004, the Company committed to a plan to transfer production of its suspension link arm business from the Company’s facility in Bowling Green, Kentucky to its plant in Milan, Tennessee to gain production efficiencies and strengthen competitiveness. In the third quarter of 2004, the Company also committed to a plan to move manual stamping operations and related weld assemblies from its Greenville, Michigan facility to other Company locations in Elkton, Michigan and Kendallville, Indiana to enable the Greenville facility to concentrate on higher-margin business in progressive stampings and complex value-added assemblies. The Company recognized cash charges and non-cash asset impairment charges in association with these actions in the amounts of $0.7 million and $0.3 million, respectively, during 2004. These costs are contained within the North America operating segment. The Greenville, Michigan move was completed during the first quarter of 2005, while the transfer of production from the Bowling Green, Kentucky facility was completed during the fourth quarter of 2004.

In October 2003, the Company announced plans to consolidate its Novi, Michigan North America oversight and Grand Rapids, Michigan corporate office activities and close its Rochester Hills, Michigan prototype tooling and technical center facility. In the fourth quarter of 2003, charges relating to these activities were recognized by the Company totaling $3.7 million, comprised of cash charges of $2.1 million and non-cash asset impairment charges of $1.6 million. These costs are contained within the North America operating segment.

On May 27, 2003, the Company announced that it would transfer the production of high-volume frame assemblies for the Ford Ranger from its Milwaukee facility to its Bellevue, Ohio facility. During 2003, the Company recorded $25.0 million in pre-tax restructuring and asset impairment charges relating to this event. These charges reflect estimated qualifying “exit costs” comprising of cash charges of $6.1 million, pension and other post-retirement benefit plan curtailment costs of $6.3 million and non-cash asset impairment charges of $12.6 million, all within the North America operating segment. These charges did not cover certain aspects of the 2003 Plan, including movement of equipment and colleague relocation and training, which was recognized as incurred. On December 5, 2003, the Company announced that it had decided not to proceed with the relocation of the Ford Ranger line based on revised economic factors from the original May 2003 decision principally due to concessions received from the Milwaukee labor unions and a need for management to focus on its 2004 new product launch schedule. Because the Company’s measurement date for pension and post-retirement benefits is September 30, the decision to continue Ranger frame production in Milwaukee, made in December 2003, resulted in a reversal of the post-retirement benefit plan curtailment loss on a three-month lag, in the first quarter of 2004, as discussed above. The cash charges of $6.1 million were incurred prior to the reversal of the original decision to move the Ford Ranger frame production. SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets” prohibits the restoration of the non-cash asset impairment charges of $12.6 million.

On January 31, 2002, the Company announced that it would discontinue the remaining stamping and ancillary processes performed at its Milwaukee Press Operations and relocate the remaining work to other Tower locations or Tier II suppliers (the “2002 Plan”). The Company substantially completed the transfer process in 2002. As a result of these efforts, the Company recorded a restructuring charge in the first quarter of 2002 totaling $75.4 million, which reflects the estimated qualifying “exit costs” to be incurred pertaining to the 2002 Plan. During 2003, and 2002 the Company revised its estimate pertaining to this restructuring activity by increasing cash charges by $0.7 million and $1.2 million, respectively. During the fourth quarter of 2002, due to a favorable settlement of anticipated other exit costs and an assessment of remaining costs, the Company subsequently reduced the estimates associated with the 2002 Plan and restructuring plans prior to 2002 by $14.3 million, resulting in a net restructuring charge of $61.1 million for 2002.

The 2002 Plan charge includes costs associated with asset impairments, severance and outplacement costs related to colleague terminations and certain other exit costs. These costs are contained in the North America operating segment.

24

The Company has historically executed various restructuring plans and may execute additional plans in the future to respond to its bankruptcy proceedings, customer sourcing decisions, realignment of manufacturing capacity to prevailing global automotive production and to improve the utilization of remaining facilities.

LIQUIDITY AND CAPITAL RESOURCES

During 2004, the Company’s cash requirements were met through operations, commercial borrowings, the issuance of 5.75% Convertible Debentures and an accounts receivable securitization facility. At December 31, 2004, the Company had available liquidity in the amount of $149.1 million, which consisted of cash on hand.

Net cash provided by operating activities was $74.8 million during 2004 compared to net cash provided by operating activities of $184.8 million during 2003. The amount provided in 2004 primarily resulted from an increase in accounts payable and accrued liabilities in the amount of $163.6 million and proceeds of $44.8 million associated with a receivables securitization, which were partially offset by increases in the Company’s accounts receivable, inventory and other operating accounts, net in the amounts of $99.6 million, $29.0 million and $5.0 million, respectively.

Net cash utilized in investing activities was $180.5 million during 2004 compared to net cash utilized of $221.6 million in 2003. The utilization for 2004 resulted from capital expenditures of $210.9 million and the acquisition of the remaining 34% ownership interest in Seojin Industrial Company from the Company’s joint venture partner for $21.3 million. The impact of these items was partially offset by proceeds of $51.7 million from the sale of Yorozu.

Net cash provided by financing activities amounted to $94.0 million in 2004 compared to $184.0 million of net cash provided during 2003. During 2004, the Company had proceeds from borrowings amounting to $613.8 million and repayments of debt in the amount of $519.9 million.

At December 31, 2004, the Company had negative working capital of $278.4 million.

The Company’s business has significant liquidity requirements. The Company has made significant capital expenditures and incurred significant launch costs over the last several years to implement its new program awards in advance of receiving any significant revenue from such new programs. Capital expenditures and launch costs for 2004 were $210.9 million and $57.6 million, respectively. These costs have had an adverse impact on the Company’s liquidity position.

The Company has a significant amount of indebtedness. As of December 31, 2004, the Company had $1,531.3 million ($1,537.8 million after giving effect to unamortized bond discount on the 12% senior notes) of outstanding indebtedness. The Company’s cash interest expenditures, net of amounts capitalized for 2004, were $130.6 million. At December 31, 2004, the Company had no availability to borrow additional amounts under its revolving loan commitment. The Company’s ability to satisfy its liquidity requirements with cash flows from operations has been negatively impacted by a decline in its operating performance over the past several years.

Certain foreign subsidiaries of the Company are subject to restrictions on their ability to dividend or otherwise distribute cash to the Company because they are subject to financing arrangements that restrict them from paying dividends.

During 2004, the Company took a number of actions to address its liquidity needs. In the first quarter of 2004, the Company sold its equity investment in Yorozu, which generated cash proceeds of $51.7 million. On May 24, 2004, the Company entered into a credit agreement involving a revolving loan commitment, a first lien term loan commitment and a second lien letter of credit commitment with various financial institutions. The Company also issued 5.75% Convertible Debentures. The Company utilized the net proceeds associated with the Convertible Debentures along with borrowings under the above-mentioned credit agreement to repay existing senior credit facilities in the amount of $239.5 million, redeem its 5.0% convertible subordinated notes of $200.0 million due August 1, 2004, pay related fees and expenses and for other general corporate purposes.

In December 2004, the Company deferred the quarterly interest payment of $4.4 million on its 6³/4% convertible subordinated debentures held by Tower Automotive Capital Trust that would have been paid on December 31, 2004. The terms of these convertible subordinated debentures permits the deferral of the underlying interest payments for up to 20 consecutive quarters.

25

Despite these efforts, the Company encountered a series of developments in late 2004 and early 2005, in addition to the termination of accelerated payment programs with its key customers, that resulted in a material reduction in the Company’s liquidity position in early 2005.

Production volumes of the Company’s largest customers declined in the latter part of 2004 and early 2005. In North America, Ford, DaimlerChrysler and General Motors experienced declining production volumes due, in part, to a loss in market share to foreign competitors such as Toyota, Honda and Nissan. Since the Company typically supplies its customers on a requirements basis and is not guaranteed any set volume of business and Ford, DaimlerChrysler and General Motors represent approximately 62% of the Company’s revenues, the decline in production has significantly impacted the Company’s liquidity position and recent results of operations.

Increased costs of raw materials have also negatively impacted the Company’s liquidity position in 2004. The majority of the Company’s product offerings are produced from steel. Due to significantly increased demand for steel, most notably from China, the cost of steel has increased significantly during 2004 and the adverse impact is continuing into 2005, and some of the Company’s product program contracts are for fixed prices that do not allow the Company to pass through increased material costs.

The Company’s cost-saving initiatives were unable to overcome the inability of the Company to maintain selling price levels or to increase selling prices. Many of the Company’s long-term supply contracts call for regular price decreases. In some cases, the Company has been unable to reach the projected cost savings necessary to offset these price decreases and, therefore, the Company’s margins on these contracts have decreased accordingly.

Significant launch costs relating to new product programs had an adverse impact on the liquidity of the Company. During 2003 and 2004, the Company had seven new product program launches. In addition to increased capital expenditures, the management of these launches resulted in higher than anticipated program launch costs resulting in decreased liquidity.

Due to the above-mentioned factors, the Company’s liquidity position deteriorated in early 2005 and forced the Company to seek Chapter 11 protection to restructure its operations and financial position. The objective of the bankruptcy filing is to provide relief from the Company’s burdensome pre-petition debt service and other obligations and allow the Company to make the necessary investments in the near term to grow and sustain its business.

The Company has established a plan that encompasses (i) a balance sheet restructuring in conjunction with the bankruptcy filing that is intended to allow the Company to eliminate much of its unsustainable debt load and simplify its complex and restrictive capital structure; (ii) the rationalization of the Company’s facilities; (iii) increasing productivity, efficiency and quality at the plant level while optimizing capacity utilization across the Company’s entire network to reduce costs and improve operating results by managing plants as cost centers instead of profit centers; (iv) leveraging scale by centralizing material services, capital and manufacturing sourcing that is designed to maximize overall purchasing power with the objective of reducing costs; (v) a manufacturing rationalization by utilizing a common approach toward processes across all of the Company’s manufacturing facilities; and (vi) focusing on profitability rather than revenue growth and market share, with the objective that future platform launches will be in a better position to achieve improved margins.

The Company’s new product launch activities and capital expenditures are expected to decline during 2005, thereby improving the Company’s liquidity position. Capital expenditures for 2005 are expected to be approximately $160.0 million. For the year ending December 31, 2005, management expects total new program launch costs to decline to $7.4 million.

Chapter 11 Impact

Under the terms of the Credit Agreement, the Chapter 11 filing creates an event of default. Upon the Chapter 11 filing, the lenders’ obligation to loan additional money to the Company terminated, the outstanding principal of all obligations became immediately due and payable, and the Debtors were required to immediately deposit funds into a collateral account to cover the outstanding amounts under the letters of credit issued pursuant to the Credit Agreement. Outstanding obligations under the Credit Agreement amounted to $425.0 million, which was refinanced through the DIP financing described below.

26

In addition, the Chapter 11 filing creates an event of default in relation to the Convertible Debentures, Senior Notes, Senior Euro Notes, and the Trust Preferred Securities and underlying 6 3/4% Convertible Subordinated Debentures.

The ability of the creditors of the Debtors to seek remedies to enforce their rights under the credit facilities described above is stayed as a result of the Chapter 11 filing, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code.

The Company’s foreign subsidiaries are not included in the Chapter 11 filing. Therefore, the debt of these subsidiaries is not subject to compromise in the bankruptcy proceedings.

DIP Financing

In conjunction with its Chapter 11 filing, the Debtors entered into a DIP Financing Agreement in February 2005. The DIP Agreement provides for a $725 million of debtor-in-possession financing, comprised of a revolving credit and letter of credit facility in an aggregate principal amount not to exceed $300 million and a term loan in the aggregate principal amount of $425 million. The proceeds of the term loan have been used to payoff the Company’s outstanding balance of $425 million associated with its pre-petition Credit Agreement. The Company believes that the existing DIP Agreement is adequate to provide for its future liquidity needs through the Debtors’ Chapter 11 bankruptcy.

Advances under the DIP Agreement bear interest at a fixed rate per annum equal to (x) the greatest (as of the date the advance is made) of the prime rate, the Base CD Rate (as defined in the DIP Agreement) plus 1%, or the Federal Funds Effective Rate (as defined in the DIP Agreement) plus 0.5%, plus (y) 1.75%, in the case of a loan under the revolving facility, or 2.75% in the case of the term loan. Alternatively, the Debtors may request that advances be made at a variable rate equal to (x) the Adjusted LIBO Rate (as defined in the DIP Agreement), for a one-month, three-month, six-month, or nine-month period, at the election of Debtors, plus (y) 2.75%, in the case of a loan under the revolving facility, or 3.75% in the case of the term loan. In addition, the DIP Agreement obligates the Debtors to pay certain fees to the Lenders as described in the DIP Agreement.

The DIP Agreement contains various representations, warranties and covenants by Debtors that are customary for transactions of this nature, including (without limitation) reporting requirements and maintenance of financial covenants.

The Debtors’ obligations under the DIP Agreement may be accelerated following certain events of default, including (without limitation) any breach by the Debtors of any of the representations, warranties, or covenants made in the DIP Agreement or the conversion of any of the bankruptcy cases to a case under Chapter 7 of the Bankruptcy Code or the appointment of a trustee pursuant to Chapter 7 of the Bankruptcy Code.

The DIP Agreement matures on February 2, 2007; however, the Debtors are obligated to repay all borrowings made pursuant to the DIP Agreement upon substantial consummation of a plan of reorganization of the Debtors that is confirmed pursuant to an order of the Bankruptcy Court.

Off Balance Sheet Arrangements

On December 30, 2004, the Company entered into a $50.0 million accounts receivable securitization facility resulting in proceeds amounting to $44.8 million on the closing date of the facility. The Company conducted the accounts receivable securitization facility through a qualified special purpose entity, which was not consolidated in the Company’s consolidated financial statements. This facility became unavailable on February 2, 2005, the date on which the Debtors filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. See Note 6 to the Consolidated Financial Statements.

27

Contractual Obligations and Commercial Commitments

The Company’s contractual obligations and commercial commitments as of December 31, 2004 were as follows (in thousands):

The table set forth above does not reflect the impact of the Chapter 11 filing made on February 2, 2005.

The Company’s commercial commitments included up to $155.0 million of standby letters of credit of which $151.9 million was outstanding as of December 31, 2004.

DEBT RATINGS

On February 2, 2005, Standard & Poor’s cut its ratings on the Company’s debt to “D” or default in association with the voluntary Chapter 11 bankruptcy filing of the Debtors. The Company’s corporate credit rating was cut to “D” from “CCC,” and the Company’s senior unsecured debt was cut to “D” from “CC.”

Following the Company’s voluntary filing for Chapter 11 bankruptcy protection, Moody’s Investors Service withdrew all ratings related to debt associated with Tower Automotive, Inc. and its 100% owned subsidiaries R.J. Tower Corporation and Tower Automotive Capital Trust.

MARKET RISK

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

At December 31, 2004, the Company had total debt and obligations under capital leases of $1,531.3 million. The debt is composed of fixed rate debt of $1,064.4 million and floating rate debt of $466.9 million. The pre-tax earnings and cash flow impact for the next year resulting from a one percentage point increase in interest rates on variable rate debt would be approximately $4.7 million, holding other variables constant. A one-percentage point increase in interest rates would not materially impact the fair value of the fixed rate debt.

28

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

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

The Company’s strategy for management of currency risk relies primarily upon conducting its operations in a country’s respective currency and may, from time to time, also involve hedging programs intended to reduce the Company’s exposure to currency fluctuations. Management believes the effect of a 100 basis point movement in foreign currency rates versus the dollar would not materially affect the Company’s financial position, results of operations or cash flows for the periods presented.

OPPORTUNITIES

The Company’s presence in Europe and Asia along with foreign vehicle manufacturers’ transplant operations in the U.S. have reduced its reliance on Ford, DaimlerChrysler and General Motors, increased penetration with certain existing customers and added new customers such as Fiat, BMW, Volkswagen, Nissan and Hyundai/Kia. The Company expects this trend to continue as a result of its anticipated organic growth outside the U.S., from recent awards to supply foreign transplant operations in the U.S. and its efforts to diversify its customer base.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

All statements, other than statements of historical fact, included in this Form 10-K or incorporated by reference herein, are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). When used in this Form 10-K, the words “anticipate,” “believe,” “estimate,” “expect,” “intends”, “project”, “plan” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management as well as on assumptions made by and information currently available to the Company at the time such statements were made. Various economic and competitive factors could cause actual results to differ materially from those discussed in such forward-looking statements, including factors which are outside the control of the Company, such as risks relating to: (i) confirmation of a plan of reorganization under the Bankruptcy Code which would allow the Company to reduce unsustainable debt and other liabilities and simplify the Company’s complex and restrictive capital structure; (ii) the Company’s reliance on major customers and selected vehicle platforms; (iii) the cyclicality and seasonality of the automotive market; (iv) the failure to realize the benefits of acquisitions and joint ventures; (v) the Company’s ability to obtain new business on new and redesigned models; (vi) the Company’s ability to achieve the anticipated volume of production from new and planned supply programs; (vii) the general economic or business conditions affecting the automotive industry (which is dependent on consumer spending), either nationally or regionally, being less favorable than expected; (viii) the Company’s failure to develop or successfully introduce new products; (ix) increased competition in the automotive components supply market; (x) unforeseen problems associated with international sales, including gains and losses from foreign currency exchange; (xi) implementation of or changes in the laws, regulations or policies governing the automotive industry that could negatively affect the automotive components supply industry; (xii) changes in general economic conditions in the United States, Europe and Asia; and (xiii) various other factors beyond the Company’s control. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

See “Market Risk” section of Item 7.

29

Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

30

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Tower Automotive, Inc.
Novi, Michigan

We have audited the accompanying consolidated balance sheets of Tower Automotive, Inc. and Subsidiaries (the “Company”) as of December 31, 2004 and 2003, and the related consolidated statements of operations, stockholders’ investment (deficiency), and cash flows for each of the three years in the period ended December 31, 2004. Our audits also included the financial statement schedules listed at Item 15 (the “financial statement schedules”). These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the consolidated financial statements of Metalsa S. de R.L. and subsidiaries (“Metalsa”), the Company’s investment in which is accounted for by use of the equity method. The Company’s equity of $210,425,313 and $201,137,812 in Metalsa’s net assets at December 31, 2004 and 2003, respectively, and of $13,833,200 and $6,318,000 in that company’s net income for the respective years then ended are included in the accompanying consolidated financial statements. The consolidated financial statements of Metalsa were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Metalsa, is based solely on the report of such other auditors.

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

In our opinion, based on our audits and the report of the other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of Tower Automotive, Inc. and Subsidiaries as of December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company’s recurring losses from operations, an extensive liquidity deficiency in early 2005 and a significant amount of indebtedness raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 10 to the consolidated financial statements, in 2003 the Company changed its method of accounting for certain variable interest entities to conform to Financial Accounting Standards Board Interpretation No. 46, “Consolidation of Variable Interest Entities.”

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated July 22, 2005 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an adverse opinion on the effectiveness of the Company’s internal control over financial reporting based on our audits.

DELOITTE & TOUCHE LLP

Detroit, Michigan
July 22, 2005

31

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Tower Automotive, Inc.
Novi, Michigan

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Tower Automotive, Inc. (a Delaware corporation) and Subsidiaries (the “Company”) did not maintain effective internal control over financial reporting as of December 31, 2004, because of the effect of the material weaknesses identified in management’s assessment based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The following material weaknesses have been identified and included in management’s assessment:

32

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2004, of the Company and this report does not affect our report on such financial statements.

In our opinion, management’s assessment that the Company did not maintain effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, because of the effect of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2004, of the Company and our report dated July 22, 2005 expressed an unqualified opinion on those financial statements and financial statement schedules and included explanatory paragraphs regarding 1) the Company’s ability to continue as a going concern, and 2) a change in the method of accounting for certain variable interest entities.

DELOITTE & TOUCHE LLP

Detroit, Michigan
July 22, 2005

33

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

34

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

35

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ INVESTMENT (DEFICIT)

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

36

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS