FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

For the fiscal year ended December 31, 1995

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

For the transition period from ___________________ to
__________________

Commission file number: 0-17873

Giddings & Lewis, Inc.
(Exact name of registrant
as specified in its charter)

Wisconsin 39-1643189
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

142 Doty Street
Fond du Lac, Wisconsin 54935
(Address of principal executive (Zip code)
offices)

Registrant's telephone number, including area code: (414) 921-9400

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

Securities registered pursuant to Section 12(g) of the Act:
Title of Class

Common Stock, $.10 par value
Preferred Share Purchase Rights

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

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. [X]

Aggregate market value of the voting stock held by nonaffiliates of the
registrant at March 8, 1996:
$584,492,082.

Number of shares of the registrant's common stock outstanding at March 8,
1996: 34,583,373 shares.

DOCUMENTS INCORPORATED BY REFERENCE

(1) Annual Report to Shareholders for the year ended December 31, 1995
(incorporated by reference into Parts I, II and IV)

(2) Proxy Statement for 1996 Annual Meeting of Shareholders (to be filed
with the Commission under Regulation 14A within 120 days after the
end of the registrant's fiscal year and, upon such filing, to be
incorporated by reference into Part III)

2
PART I

Item 1. Business

General

Giddings & Lewis, Inc. (the "Company") is a leading global
designer and producer of highly-engineered, high-precision, industrial
automation systems, including automated machine tools, smart manufacturing
systems, flexible transfer lines, assembly automation systems, measuring
systems, industrial controls, and related products and services. The
Company's products are supplied primarily to the automotive, construction,
aerospace, defense, appliance, energy and electronics industries and are
manufactured at the Company's thirteen facilities located in the United
States, Canada, England and Germany.

The Giddings & Lewis name has been continuously present in the
Company's domestic markets for over 100 years. The Company was a public
company from 1937 until 1982, when its businesses were acquired by United
Dominion Industries, Inc. ("United Dominion"). In July 1989, United
Dominion sold its interest in the Company through a public offering. On
October 31, 1991, the Company acquired Cross & Trecker Corporation
("Cross & Trecker"), a manufacturer of machine tools and related factory
equipment. The acquisition was accounted for as a purchase and the
operations of Cross & Trecker have been included in the Company's
financial statements since the date of acquisition. On April 24, 1995,
the Company acquired through a wholly owned subsidiary all of the issued
and outstanding shares of capital stock of Fadal Engineering Company, Inc.
("Fadal") and the land and building in Chatsworth, California used by
Fadal in the operation of its business. The net cash consideration paid
by the Company in this transaction was $179,579,000, which amount includes
$1,550,000 of direct acquisition costs. The acquisition was accounted for
as a purchase and the operations of Fadal have been included in the
Company's financial statements since the date of acquisition. The
operations of Fadal are included in the Company's Automation Technology
Group.

The Company's overall business strategy is to continue to
strengthen its position within the global industrial automation
marketplace by providing customers with a creative, single source for a
broad range of manufacturing products and services. The key ongoing
elements of the Company's business strategy are to (i) continue to
implement a focused customer-oriented marketing approach, (ii) expand and
extend the Company's product lines, and (iii) aggressively expand its
international franchise.

The Company operates in a single business segment, industrial
automation products, and is organized into four major operating groups:
Automation Technology, Integrated Automation, Automation Measurement and
Control, and European Operations. Net sales attributed to each of the
Company's operating groups for each of the last three years are shown in
the following table:

Revenue by Operating Group
(in thousands)
Year Ended December 31,

1995 1994 1993

Operating Group Amount % of Total Amount % of Total Amount % of Total

Automation Technology $293,872 40.2% $162,895 26.3% $168,662 32.6%
Integrated Automation 277,637 38.0 267,778 43.2 195,032 37.7
Automation Measurement
and Control 71,171 9.8 62,213 10.0 56,347 10.9
European Operations 87,872 12.0 126,585 20.5 97,421 18.8
------- ----- ------- ----- -------- -----
Total $730,552 100.0% $619,471 100.0% $517,462 100.0%
======= ====== ======= ===== ======= =====

Products

The Automation Technology Group, the Integrated Automation Group and
the Automation Measurement and Control Group sell products from the
automation technology, integrated automation and automation measurement
and control product lines, respectively. The European Operations Group
sells products from all three product lines. Each of the Company's
product lines is described below.

Automation Technology. The Company's automation technology product line
consists of highly-engineered, high-precision, computer numerically
controlled machine tools and associated products and services. Revenues
from this product line were 41.2%, 32.0% and 35.6% of total revenues for
1995, 1994 and 1993, respectively. The following are the most significant
products in this product line:

Horizontal and Vertical Machining Centers, which, through the
use of automatic tool changers, can mill, drill, bore, tap and
ream primarily metal parts of various shapes and sizes, in
programmable sequences;

Horizontal and Vertical Lathes, which cut round parts from metal
and other materials;

Horizontal Boring, Drilling, and Milling Machines, which perform
the same functions as horizontal machining centers, but do not
have automatic tool changers;

Cellular and Flexible Manufacturing Systems, which utilize
material handling systems and Company-produced computer
numerical controls and software, and prefixtured pallets to
integrate several machine tools to form a cellular system or to
integrate many machine tools to form a flexible manufacturing
system;

Fixtures and Cutting Tools, which are used to hold and to cut,
drill, or bore metal and other parts; and

Drill Point Grinders, which grind specialized drill points
including a helical point which has superior drilling
capabilities.

With the exception of the Fadal product line, substantially all
of the Company's major machine tools and fixtures are custom engineered to
meet specific customer requirements and, accordingly, have a high
engineering component in their selling prices. Although these products
are produced in a variety of sizes, the historic focus and strength of
this product line has been large, highly-engineered, high-precision
metal-cutting machine tools such as those used to manufacture major parts
for jet engines and construction equipment. Trading on the Company's name
and reputation, these products occupy the premium-priced segment of the
market. Fadal's product line includes eleven models of small computer
numerically controlled vertical machining centers for use in industrial
machine shops. The Company produces the majority of the computer
numerical controls and related software incorporated into its products.
The Company's cutting tools and drill point grinders are primarily sold to
standard specifications.

Virtually all of the Company's automated machine tools are
computer numerically controlled. They are designed to operate largely
unattended and are programmable to perform machining functions on a wide
variety of metal parts and other materials. Such standalone machines may
be combined with several pallets (on which parts in process are positioned
for machining) and pallet changers to increase production flow. The next
step in automation is to permit a part to be processed by one machine and
automatically transferred to another machine for further work. The
Company provides this capability through cellular and flexible
manufacturing systems that integrate the functions of several standalone
machines with the use of automated transport systems and Company-produced
cell managers and software. Since 1982, the Company has designed its
machine tools and their pallets to be compatible with each other so that
its established customer base can integrate new machines with existing
machines.

Standalone machines have historically dominated the Company's
machine tool sales, accounting for approximately 65%, 37% and 48% of
automation technology product line revenues in 1995, 1994 and 1993,
respectively. Cellular and flexible manufacturing systems accounted for
approximately 5%, 21% and 14% of automation technology product line
revenues in the same respective years. Included in such cellular and
flexible manufacturing percentages is a certain volume of standalone sales
to customers which create or enlarge machining cells by integrating the
new machines with existing machines.

The Company's revenues from post-sale services and parts are
primarily associated with its automation technology product line.
Services include training, maintenance, repair, remanufacturing and
retrofitting, and accounted for approximately 23%, 33% and 32% of
automation technology product line sales in 1995, 1994 and 1993,
respectively. Sales of such services and parts are at higher gross
margins than the machine tools themselves and have historically been less
sensitive to industry cyclicality than the sale of new equipment.

The other products in the automation technology product line
primarily consist of gray iron and ductile castings which are produced for
the Company's requirements as well as for sales to outside customers.
Through its foundry in Menominee, Michigan, the Company produces gray iron
and ductile castings of up to 35 tons, typically cast from unique patterns
supplied by the Company and its customers and maintained at the foundry.

Integrated Automation. The Company engineers, manufactures and sells
flexible transfer lines, flexible machining systems and special machining
systems. The Company is also a leading domestic designer and manufacturer
of custom automated assembly systems, including dials, synchronous and
non-synchronous transport systems and special handling, testing and
measuring systems and complete multi-unit automatic production systems.
These products are for use in the automotive industry, as well as the
major appliance and other high volume industries. Integrated automation
product line revenues for 1995, 1994 and 1993 accounted for 49.9%, 57.9%
and 53.5%, respectively, of total revenues for the Company.

The Company's flexible transfer lines are a combination of
individual work stations arranged in the required sequence, connected by
work transfer devices and integrated with interlocked controls. All types
of machining operations, such as drilling, tapping, reaming, boring and
milling are efficiently and economically combined on transfer machines.
Dial, rotary, in-line and pallet-type are among the different types of
flexible transfer line equipment supplied by the Company. Flexible
transfer lines have traditionally been used in the automotive industry for
producing identical components at high production rates with minimal
manual part handling and are applicable to other industries with high
volume requirements. Flexible transfer lines accounted for approximately
63.9%, 65.9% and 64.2% of integrated automation product line revenues in
1995, 1994 and 1993, respectively.

The Company's automated assembly systems are used to assemble a
variety of products, including automotive airbags, household appliances,
wing spars for commercial airlines, and automotive engines and
transmissions. The nonsynchronous assembly systems are used to integrate
independent self-powered assembly stations with a continuous conveyor line
and consist of three principal types of stations: manual stations, which
only require that a part be placed on a pallet; dedicated stations, which
perform multiple actions on a family of parts; and robotic stations, which
can be programmed to perform many functions on a number of parts.
Robotics incorporated in the Company's automated assembly systems are not
produced by the Company. Each automated assembly system is custom
engineered by the Company to meet a customer's specific requirements, with
standardized components normally accounting for only 10% to 15% of any
system. Automated assembly systems accounted for approximately 22.4%,
27.2% and 23.1% of integrated automation product line revenues in 1995,
1994 and 1993, respectively.

The integrated automation product line also includes broach and
piston turning machines. Both are metalcutting machines. Broach machines
are used to push or pull a multi-tooth cutting tool or the workpiece in
relation to each other to remove material. Broach machines have the
ability to rough and finish in one pass thereby increasing productivity.
As the name implies, piston turning machines are used to manufacture
pistons. The machine is unique in that it is capable of producing the
complex shapes required in piston manufacturing.

Automation Measurement and Control. The Company designs and manufactures
a comprehensive line of dimensional measurement products. These include
coordinate measurement machines, gaging products and metrological
instruments. The Company is a leader in the implementation of flexible
measurement systems, which can be supplied either on a standalone basis or
as an integral part of manufacturing systems. The Company also provides a
wide range of services, including gage certification services. In
addition, the Company supplies a broad range of industrial control
products, including programmable industrial computers, computer numerical
controls, servo drive systems, operator interface systems and specialized
software solutions. These products are designed for use both with the
Company's products and the products of other manufacturers. Automation
measurement and control product line revenues were 8.9%, 10.1% and 10.9%
of total revenues for the Company in 1995, 1994 and 1993, respectively.

Customers, Sales, and Distribution

The Company's products and manufacturing systems are sold
primarily to the automotive, construction, aerospace, defense, appliance,
energy and electronics industries. Typically, the ten largest customers
are large multi-national companies that account for approximately 50% to
60% of the Company's total sales, although the composition of these
customers varies from year to year. One customer, Ford Motor Company,
accounted for approximately 6.3%, 15.9% and 29.7% of the Company's sales
in 1995, 1994 and 1993, respectively. For the same periods, Chrysler
Corporation accounted for approximately 23.2%, 14.2% and 4.4% of sales,
respectively.

A network of sales representatives/distributors is used to sell
the Company's products on a worldwide basis. The sales
representative/distributor network is assisted and supervised by Company
sales managers located in key market areas. The Company's direct sales
force is paid a salary plus commission and its distributors are paid on a
commission-only basis.

Sales Arrangements

The Company sells substantially all of its products under fixed
price contracts. These contracts are priced after the Company analyzes,
among other things, material, labor, overhead and custom engineering costs
involved in the contract.

Fixed price contracts entail the risk of cost overruns. The
risk of such overruns typically increases in proportion to the complexity
and uniqueness of the engineering and manufacturing tasks involved under
any particular contract. There can be no assurance that the Company will
not be adversely affected by significant cost overruns on its fixed price
contracts.

A substantial portion of the products manufactured by the
Company involves long lead times from receipt of a customer order to the
shipment of a completed machine. Under the terms of its sales contracts,
and consistent with industry practice, the Company receives most of its
sales price upon shipment of the product.

Manufacturing Capacity

The Company manufactures its products at thirteen facilities
with its primary facilities located in Fond du Lac and Janesville,
Wisconsin; Fraser and Port Huron, Michigan; Dayton, Ohio; Chatsworth,
California; Knowsley, England; and Wendlingen, Germany. The Fond du Lac
facility currently operates three shifts a day, five days a week. The
Janesville facility is currently operating three shifts, six days a week.
The Fraser and Port Huron facilities are currently operating two shifts a
day, six days a week. The Dayton facility is currently operating three
shifts, five days a week. The Chatsworth facility is currently operating
two shifts, six days a week. The Knowsley and Wendlingen facilities are
currently operating two shifts a day, five days a week. Overtime charges
at the Company's facilities are not material.

Product Line Competition

Automation Technology. The market for machine tools is highly
competitive, with substantial competition from both U.S. and foreign
manufacturers. Competition is mainly from manufacturers of the same types
of machines produced by the Company. However, manufacturers of different
machine types, certain customers, and third party integrators are also
competitors. Principal competitive factors for machine tools include
product performance, delivery, price and service. The Company's
Menominee, Michigan foundry competes with a number of foundries in its
respective market area.

Integrated Automation. The traditional customer base for domestic
flexible transfer line sales has been the major automobile manufacturers.
This limited customer base and the large scope of the projects involved
have made this a very competitive market. The size of the projects has
resulted in a competitive environment where the major competitors are
large and often have established relationships with their customers.
Foreign competitors have obtained limited business in this market which
had been traditionally dominated by domestic suppliers. The international
customer base for flexible transfer lines includes all major European,
Asian and U.S. transplant automobile manufacturers. This market exhibits
the same competitive characteristics as the U.S. market. However, the
Company believes that its established presence in the European flexible
transfer line market and its manufacturing capabilities in Germany and
England leave the Company favorably positioned to compete effectively in
this market.

The domestic market for automated assembly systems is also
competitive. Competitive factors for automated assembly systems include
engineering concepts, pricing, product performance and delivery.
Approximately 70 North American companies have been identified as
competitors for the type of automated assembly systems supplied by the
Company. Many of these competitors specialize in a specific type of
assembly system and compete mainly on a regional basis. The automated
assembly systems manufactured by the Company are substantially custom
engineered products and are purchased largely by both major corporations
and small independent companies based in the U.S. Due to the nature of
its products and its customer base, the Company believes that to date it
has not faced significant foreign competition in automated assembly
systems. In the international market, the Company believes that the
relationships already established in the European automotive market will
provide new opportunities for sales of automated assembly systems.

Automation Measurement and Control. The markets for the automation
measurement and control product line is highly competitive. Currently,
the Company believes that it is among the top five coordinate measurement
producers in the world. This market has become increasingly global in
nature with significant competition coming from foreign producers.
Principal competitive factors for coordinate measurement systems include
quality, delivery time, service and price.

Established customer relationships and customer preference for a
standardized control produced by one manufacturer has hindered the
Company's ability to penetrate some of the larger segments in the market
for industrial control products. The Company believes that it has
successfully pursued niche and non-traditional markets in the broad motion
control marketplace as exemplified by sales to robotics, photographic
equipment and packaging equipment manufacturers.

Raw Materials

Because the Company manufactures most of the parts used in its
products, the basic raw materials used in the Company's production are
iron and steel. The Company's foundry produces gray iron and ductile
castings which are major parts in its machine tools. Certain components
are purchased, such as sheet metal, robotics, electric motors, bearings,
steel castings and electronic and electrical components. All such
materials and components used are available from a number of sources. The
Company is not dependent on any supplier that cannot be readily replaced
and has not experienced difficulty in obtaining necessary purchased
materials.

Patents and Trademarks

The Company possesses rights under a number of domestic and
foreign patents and trademarks relating to its products and business.
While the Company considers that patents and trademarks are important in
the operation of its business, its business is not dependent on any single
patent or trademark or group of patents or trademarks.

Research, Development and Custom Engineering

As of December 31, 1995, the Company had 48 employees in its
engineering departments engaged, wholly or partly, in activities relating
to Company-sponsored research, 37 of whom have college engineering
degrees. Another 450 employees were actively involved in product
development, custom engineering and software development. Of these, 172
have college degrees in engineering. A summary of research and product
development expenditures for the last three years is shown in the
following table:

Research, Development and Custom Engineering Expenditures
(in thousands)

1995 1994 1993
Research and development expense
pertaining to new products or
significant improvements to
existing products . . . . . . . . $ 3,183 $ 3,857 $ 4,064

All other product development and
engineering expenditures related
to ongoing refinements,
improvements of existing products,
and custom engineering . . . . . 57,212 63,541 53,349
------ ------ ------
Total expenditures for research,
product development, and
engineering . . . . . . . . . . . $60,395 $67,398 $57,413
====== ====== ======

Employees

As of December 31, 1995, the Company had 3,967 employees, of
whom 2,106 were hourly employees and 1,861 were salaried employees. At
the Company's Dayton, Ohio facility, 104 employees are covered by a
collective bargaining agreement expiring in June 1996. Also, at the
facility in Tecumseh, Canada, 16 employees are covered by a collective
bargaining agreement expiring in September 1996. The Company's remaining
collective bargaining agreements expire at various times from 1997 through
1998. The Company considers its employee relations to be good.

Executive Officers

The following table sets forth certain information, as of March
1, 1996, regarding the executive officers of the Company. All executive
officers serve at the pleasure of the Board of Directors.

Name Age Position

Joseph R. Coppola 65 Chairman, Chief Executive Officer
and Director

Richard C. Kleinfeldt 54 Vice President - Finance,
Secretary and Director
Heinz G. Anders 62 Group Vice President and General
Manager-European Operations

Douglas E. Barnett 36 Vice President and Corporate
Controller
Carmine F. Bosco 49 Group Vice President and General
Manager - Automation Measurement
and Control Group

Name Age Position

Philip N. Ciarlo 44 Group Vice President and General
Manager - Integrated Automation
Group
Todd A. Dillmann 40 Corporate Counsel and Assistant
Secretary

Robert N. Kelley 45 Vice President - Administration

Michael R. Melzer 50 Treasurer

Stephen M. Peterson 46 Group Vice President and General
Manager - Fadal Engineering
Company, Inc.

James B. Simon 54 Group Vice President and General
Manager - Automation Technology
Group

Joseph R. Coppola has served as Chairman of the Board and Chief Executive
Officer of the Company since July 1993. From 1983 to 1993, Mr. Coppola
was Senior Vice President of Manufacturing Services for Cooper Industries,
Inc.

Richard C. Kleinfeldt has served as Vice President-Finance of the Company
since May 1989 and as Secretary since July 1989. Mr. Kleinfeldt has been
employed by the Company since 1964.

Heinz G. Anders has served as Group Vice President and General Manager of
the Company's European Operations since February 1994. From 1981 until
assuming his current position, Mr. Anders was Managing Director for
Deutsche Gardner-Denver GmbH & Co. in Westhausen, Germany.

Douglas E. Barnett has served as Vice President and Corporate Controller
since January 1996. Prior thereto, Mr. Barnett had been Treasurer of the
Company since February 1991. Prior to joining the Company in 1991, Mr.
Barnett had been an investment banker with The First Boston Corporation
since 1989.

Carmine F. Bosco has served as Group Vice President and General Manager -
Automation Measurement and Control since joining the Company in June 1995.
Prior thereto he spent twenty years working for Ingersoll-Rand Company
where he served as Vice President and General Manager of the Aro Fluid
Products division since 1990.

Philip N. Ciarlo has served as Group Vice President and General Manager -
Integrated Automation since December 1995. Prior thereto he served as
Vice President and General Manager of the Company's Assembly Automation
Operations from June 1994 to December 1995. Prior to joining the Company
in June 1994, Mr. Ciarlo was Manager Plant Operations for Martin Marietta
from April 1993 to June 1994. He served in various management positions
with General Electric Corporation for twenty years prior to that.

Todd A. Dillmann has served as Corporate Counsel and Assistant Secretary
of the Company since January 1, 1995 and as Corporate Counsel since
November 1, 1991. Prior to that he was Director of Legal Services for
Kearney & Trecker Corporation.

Robert N. Kelley has served as Vice President - Administration of the
Company since July 1991. Prior thereto, Mr. Kelley was Vice President of
Human Resources and Administration of Premier Refractories & Chemicals,
Inc. since June 1989.

Michael R. Melzer has served as Treasurer of the Company since January
1996. Prior thereto he served as Vice President of Financial Services of
the Company since September 1993. From February 1993 until August 1993,
Mr. Melzer served as Vice President of Technical Services - Automation
Technology. From November 1991 until January 1993, Mr. Melzer served as
Vice President - West Allis Operations for the Automation Technology
Group. Prior to the Company's acquisition of Cross & Trecker in 1991, Mr.
Melzer had served in various financial and operations positions with
Kearney & Trecker Corporation.

Stephen M. Peterson has served as Group Vice President and General Manager
- Fadal Engineering Company, Inc. since May 1995. Prior thereto he served
as Vice President - Worldwide Sales of the Company since December 1990.
He has been an employee of the Company since 1969.

James B. Simon has served as Group Vice President - Automation Technology
since December 1994 and prior thereto Mr. Simon had been Vice President -
Engineering/Total Quality of the Company since 1989. Mr. Simon has been
an employee of the Company since 1965.

Backlog

Information about backlog is contained under "Management's
Discussion and Analysis" on pages 14 to 18 of the Company's 1995 Annual
Report to Shareholders and such information is hereby incorporated herein
by reference. In some instances involving automotive customers, bookings
are awarded and included in the backlog with the formal purchase orders
obtained at a later time. Such practice is standard in the industry and
the Company has historically experienced no significant cancellation of
such bookings. At December 31, 1995, these bookings amounted to $14
million.

Foreign Operations and Export Sales

Information about the Company's foreign operations and export
sales is contained in Note 11 of Notes to Consolidated Financial
Statements on page 33 of the Company's 1995 Annual Report to Shareholders
and such information is hereby incorporated herein by reference.

Environmental Matters

The Company and the industry in which it competes are subject to
environmental laws and regulations concerning emissions to the air,
discharges to waterways and the generation, handling, storage,
transportation, treatment and disposal of waste materials. It is the
Company's policy to comply with all applicable environmental, health and
safety laws and regulations. These

laws and regulations are constantly evolving and it is difficult to
predict accurately the effect they will have on the Company in the future.
The Company does not presently anticipate that compliance with currently
applicable environmental regulations and controls will significantly
affect its competitive position, capital spending or earnings during 1996.
For further information on environmental matters, see Item 3 of this
Annual Report on Form 10-K.

Item 2. Properties

The following table sets forth certain information, as of
December 31, 1995, relating to the Company's principal facilities. See
"Manufacturing Capacity." All of the real property listed is owned by the
Company.

Properties

Approximate
Approximate Floor Area
Land Area in Square
Location in Acres Feet Principal Uses

Chatsworth, CA 6.8 206,000 Design and manufacture
of automated machine
tools

Fond du Lac, WI 24.3 457,000 General offices and
design and manufacture
of automated machine
tools, tools and
accessories

Fond du Lac, WI 15.4 102,000 Design and manufacture
of computer-based
electronic control units
and production of
related software

Janesville, WI 12.3 227,000 Design and manufacture
of automated assembly
systems

Janesville, WI 5.5 82,000 Design and manufacture
of automated assembly
systems

Dayton, OH 19.8 294,000 Design and manufacture
of measurement systems

Fraser, MI 31.1 244,000 Design and manufacture
of machining systems

Warren, MI 1.9 24,000 Manufacture of machine
components

Port Huron, MI 12.5 143,000 Design and manufacture
of special machine tools

13
Approximate
Approximate Floor Area
Land Area in Square
Location in Acres Feet Principal Uses

Menominee, MI 7.0 142,000 Manufacture of castings

Tecumseh, Canada 9.0 70,000 Manufacture of machining
systems

Wendlingen, Germany 11.5 257,000 Design and manufacture
of machining systems

Knowsley, England 5.7 125,000 Design and manufacture
of machining systems

The Company also owns one other facility with floor space of
approximately 23,000 square feet. The Company is currently in the process
of selling this facility.

Item 3. Litigation

The Company is involved in various environmental matters,
including matters in which the Company and certain of its subsidiaries
have been named as potentially responsible parties under the Comprehensive
Environmental Response Compensation and Liability Act ("CERCLA"). These
matters include a soil and water contamination matter at the Company's
former West Allis, Wisconsin facility. In 1992, the Company was notified
by the Wisconsin Department of Natural Resources ("WDNR") of contamination
at the West Allis site. In 1994, the Company sold most of the site,
including the manufacturing facility. The Company has made substantial
progress on the implementation of a WDNR approved clean-up plan on the
nine acre portion of the site that was not sold.

The Company has established accruals for all environmental
contingencies of which management is currently aware in accordance with
generally accepted accounting principles. In establishing these accruals,
management considered (a) reports of environmental consultants retained by
the Company, (b) the costs incurred to date by the Company at sites where
clean-up is presently ongoing and the estimated costs to complete the
necessary remediation work remaining at such sites, (c) the financial
solvency, where appropriate, of other parties that have been responsible
for effecting remediation at specified sites, and (d) the experience of
other parties who have been involved in the remediation of comparable
sites. The accruals recorded by the Company with respect to environmental
matters have not been reduced by potential insurance or other recoveries
and are not discounted. Although the Company has and will continue to
pursue such claims against insurance carriers and other responsible
parties, future potential recoveries remain uncertain and, therefore, were
not recorded as a reduction to the estimated gross environmental
liabilities. Based on the foregoing and given current information,
management believes that future costs in excess of the amounts accrued on
all presently known and quantifiable environmental contingencies will not
be material to the Company's financial position or results of operations.

In another matter, a Michigan Department of Natural Resources
(now known as the Michigan Department of Environmental Quality)
investigation into alleged environmental violations at the Company's
Menominee, Michigan facility resulted in the issuance of criminal
complaints against the Company and two of its employees in November 1994.
The complaints, which are

pending in Menominee County, Michigan district and circuit courts,
generally focus on alleged releases of hazardous substances and the
alleged illegal treatment and disposal of hazardous waste. In these
actions, the State of Michigan is seeking, among other relief, monetary
sanctions as specified by applicable law. Two civil lawsuits are also
pending which seek unspecified damages based on allegations of improper
disposal and emissions at this facility. The Company is vigorously
defending itself against all charges and allegations. Information
presently available to the Company does not enable it to reasonably
quantify potential civil or criminal penalties, or remediation costs, if
any, related to these matters.

The Company is also involved in other litigation and
proceedings, including product liability claims. In the case of product
liability, the Company is partially self-insured and has accrued for all
claim exposure for which a loss is probable and reasonably estimable.
Based on current information, management believes that future costs in
excess of the amounts accrued for all such existing litigation will not be
material to the Company's financial position or results of operations.

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

No matters were submitted to a vote of shareholders during the
quarter ended December 31, 1995.

PART II

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

The portion of page 18 under the caption "Market Prices and
Dividends" which describes the market for the Company's Common Stock, $.10
par value, and Note 5 of Notes to Consolidated Financial Statements on
pages 26 and 27 which describes restrictions on dividends and which are
contained in the Company's 1995 Annual Report to Shareholders are hereby
incorporated herein by reference in response to this Item.

Item 6. Selected Financial Data

The information set forth in the table on page 13 of the
Company's 1995 Annual Report to Shareholders under the caption "Five-Year
Summary" is hereby incorporated herein by reference in response to this
Item.

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

The information set forth on pages 14 through 18 in the
Company's 1995 Annual Report to Shareholders under the caption
"Management's Discussion and Analysis" is hereby incorporated herein by
reference in response to this Item.

Item 8. Financial Statements and Supplementary Data

The consolidated statements of income, cash flows and changes in
shareholders' equity for each of the years in the three-year period ended
December 31, 1995, and the related consolidated balance sheets of the
Company as of December 31, 1995 and 1994, together with the related notes
thereto and the report of independent auditors, all set forth on pages 19
through 34 of the Company's 1995 Annual Report to Shareholders, are hereby
incorporated herein by reference in response to this Item.

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

There have been no changes in or disagreements with the
Company's independent auditors regarding accounting and financial
disclosure required to be reported pursuant to this Item.

PART III

Item 10. Directors and Executive Officers of the Registrant

Pursuant to Instruction G, the information required by this Item
with respect to directors and Section 16 compliance is hereby incorporated
herein by reference from the information under the captions entitled
"Election of Directors" and "Miscellaneous-Other Matters" set forth in the
Company's definitive Proxy Statement for its 1996 Annual Meeting of
Shareholders ("Proxy Statement")*. Information with respect to the
executive officers of the Company appears in Part I, pages 9 through 11,
of this Annual Report on Form 10-K.

* The Proxy Statement will be filed with the Securities and
Exchange Commission pursuant to Regulation 14A within 120 days after the
end of the Company's fiscal year.

Item 11. Executive Compensation

Pursuant to Instruction G, the information required by this Item
is hereby incorporated herein by reference from the information under the
captions entitled "Board of Directors-Director Compensation" and
"Executive Compensation" set forth in the Proxy Statement; provided,
however, that the subsection entitled "Executive Compensation - Report on
Executive Compensation" shall not be deemed to be incorporated herein by
reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Pursuant to Instruction G, the information required by this Item
is hereby incorporated herein by reference from the information under the
caption entitled "Principal Shareholders" set forth in the Proxy
Statement.

Item 13. Certain Relationships and Related Transactions

Pursuant to Instruction G, the information required by this Item
is hereby incorporated by reference herein from the information under the
caption entitled "Election of Directors" set forth in the Proxy Statement.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) 1. Financial statements - The financial statements listed
in the accompanying index to financial statements and
financial statement schedules are incorporated by
reference in this Annual Report on Form 10-K.

2. Financial statement schedules - The financial
statement schedule listed in the accompanying index to
financial statements and financial statement schedules
is filed as part of this Annual Report on Form 10-K.

3. Exhibits - The exhibits listed in the accompanying
index to exhibits are filed as part of this Annual
Report on Form 10-K.

(b) Reports on Form 8-K

No reports on Form 8-K were filed by the Company during the
quarter ended December 31, 1995.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized, on March 15, 1996.

GIDDINGS & LEWIS, INC.

By /s/ Joseph R. Coppola
Joseph R. Coppola
Chairman and Chief Executive
Officer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities indicated on March 15, 1996.

Name Title

/s/ Joseph R. Coppola Chairman, Chief Executive
Joseph R. Coppola Officer and Director
(Principal Executive Officer)

/s/ Richard C. Kleinfeldt Vice President - Finance,
Richard C. Kleinfeldt Secretary and Director
(Principal Financial and
Accounting Officer)

/s/ Albert J. Baciocco, Jr. Director
Albert J. Baciocco, Jr.

/s/ John A. Becker Director
John A. Becker

/s/ Ruth M. Davis Director
Ruth M. Davis

Name Title

/s/ Clyde H. Folley Director
Clyde H. Folley

/s/ Benjamin F. Garmer, III Director
Benjamin F. Garmer, III

/s/ John W. Guffey, Jr. Director
John W. Guffey, Jr.

/s/ Ben R. Stuart Director
Ben R. Stuart

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES

Page

Annual Report
Form 10-K to Shareholders

Consolidated statements of income
for each of the three years in the
period ended December 31, 1995 - 19
Consolidated statements of cash
flows for each of the three years in
the period ended December 31, 1995 - 20

Consolidated balance sheets at
December 31, 1995 and 1994 - 21
Consolidated statements of changes
in shareholders' equity for each of
the three years in the period ended
December 31, 1995 - 22

Notes to consolidated financial
statements - 23-33

Report of Independent Auditors - 34
Consolidated financial statement
schedule:

II - Valuation and
qualifying accounts 20 -

All other financial statement schedules are omitted because the required
information is not present or is not present in amounts sufficient to
require submission of the schedules, or because the information required
is included in the consolidated financial statements and notes thereto.

20
Schedule II

GIDDINGS & LEWIS, INC.

CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

Years ended December 31, 1995, 1994 and 1993
(in thousands)

Balance
Balance at Additions at
beginning charged to end of
Classification of year expense Deductions year

Receivables - Allowance
for doubtful accounts:

1995 $ 922 $ 999 $ (85) $1,836

1994 973 172 (223) 922

1993 1,115 334 (476) 973

Inventories - Allowance
for obsolescence and
loss:

1995 $7,378 $2,913 $(2,815) $7,476

1994 5,900 2,553 (1,075) 7,378

1993 5,003 2,730 (1,833) 5,900

E-1

INDEX TO EXHIBITS

Exhibit No. Exhibit Description

(2.1) Stock Purchase Agreement by and among Giddings &
Lewis, Inc., Bike Corp., Fadal Engineering Company,
Inc., David E. de Caussin and Myrtle Rosalie de
Caussin, trustees of the David and Myrtle de Caussin
Family Trust - 1988, and Larry F. de Caussin and
Elsie Margaret de Caussin, trustees of the Larry and
Elsie de Caussin Family Trust - 1988, dated as of
April 24, 1995 [Incorporated by reference to Exhibit
2.1 to Giddings & Lewis, Inc.'s Current Report on
Form 8-K, dated April 24, 1995]

(2.2) Agreement of Purchase and Sale by and between
Giddings & Lewis, Inc., Bike Corp. and 20701 Plummer
Street, Ltd., dated as of April 24, 1995
[Incorporated by reference to Exhibit 2.2 to Giddings
& Lewis, Inc.'s Current Report on Form 8-K, dated
April 24, 1995]

(3.1) Restated Articles of Incorporation of Giddings &
Lewis, Inc., as amended to date [Incorporated by
reference to Exhibit 3.2 to Giddings & Lewis, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended
October 1, 1995]

(3.2) By-Laws of Giddings & Lewis, Inc., as amended to date
[Incorporated by reference to Exhibit 3.2 to
Giddings & Lewis, Inc.'s Quarterly Report on Form 10-
Q for the quarter ended July 4, 1993]

(4.1) Article IV of the Restated Articles of Incorporation
of Giddings & Lewis, Inc., as amended to date
[Incorporated by reference to Exhibit 3.2 to
Giddings & Lewis, Inc.'s Quarterly Report on Form 10-
Q for the quarter ended October 1, 1995]

(4.2) Credit Agreement among Giddings & Lewis, Inc.,
Giddings & Lewis GmbH, Giddings & Lewis AG, the
Institutions from time to time party thereto as
Lenders, the Institutions from time to time party
thereto as Issuing Banks, Citicorp North America,
Inc., as Agent, and Citicorp Investment Bank Limited,
as London Agent, dated as of December 21, 1992.
[Incorporated by reference to Exhibit 4.2 to Giddings
& Lewis, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1992]

(4.3) Amendment to Credit Agreement among Giddings & Lewis,
Inc., Giddings & Lewis GmbH, Giddings & Lewis Ltd.,
the Institutions from time to time party thereto as
Lenders, the Institutions from time to time party
thereto as Issuing Banks, Citicorp North America,
Inc., as Retiring Agent, Citibank N.A., as Agent,
Citicorp Investment Bank Limited, as Retiring London
Agent, and Citibank International plc, as an Agent,
dated as of December 21, 1994 [Incorporated by
reference to Exhibit 4.3 to Giddings & Lewis, Inc.'s
Annual Report on Form 10-K for the year ended
December 31, 1994]

E-2

(4.4) Amendment No. 2 and Consent to Credit Agreement among
Giddings & Lewis, Inc., Giddings & Lewis GmbH,
Giddings & Lewis Ltd. and the Institutions from time
to time party thereto as Agent and Lenders, dated as
of April 24, 1995 [Incorporated by reference to
Exhibit 4.3 to Giddings & Lewis, Inc.'s Current
Report on Form 8-K, dated April 24, 1995]

(4.5) Indenture between Giddings & Lewis, Inc. and Firstar
Trust Company, as Trustee, dated as of August 7, 1995
[Incorporated by reference to Exhibit 4.1 to
Amendment No. 1 to Giddings & Lewis, Inc.'s
Registration Statement on Form S-3 (Registration No.
33-61237)]

(4.6) Officer's Certificate, dated as of September 26,
1995, relating to Giddings & Lewis, Inc.'s 7-1/2% Notes
due 2005 [Incorporated by reference to Exhibit 4 to
Giddings & Lewis, Inc.'s Current Report on Form 8-K,
dated September 26, 1995]

(4.7) Rights Agreement, dated as of August 23, 1995,
between Giddings & Lewis, Inc. and Firstar Trust
Company [Incorporated by reference to Exhibit 4.1 to
Giddings & Lewis, Inc.'s Current Report on Form 8-K,
dated August 23, 1995]

(10.1)* Giddings & Lewis, Inc. 1989 Stock Option Plan
[Incorporated by reference to Exhibit 4.1 to Giddings
& Lewis, Inc.'s Form S-8 Registration Statement
(Registration No. 33-31951)]

(10.2)* Giddings & Lewis, Inc. 1989 Restricted Stock Plan
[Incorporated by reference to Exhibit 4.1 to Giddings
& Lewis, Inc.'s Form S-8 Registration Statement
(Registration No. 33-31950)]

(10.3)* Giddings & Lewis, Inc. Independent Director Stock
Based Incentive Plan [Incorporated by reference to
Exhibit 10.4 to Giddings & Lewis, Inc.'s Form S-4
Registration Statement (Registration No. 33-43061)]

(10.4)* Giddings & Lewis, Inc. 1993 Stock and Incentive Plan
[Incorporated by reference to Exhibit 4.1 to Giddings
& Lewis, Inc.'s Form S-8 Registration Statement
(Registration Statement No. 33-64936)]

(10.5)* Form of Key Executive Employment and Severance
Agreement (covering officers other than Joseph R.
Coppola) [Incorporated by reference to Exhibit 10.5
to Giddings & Lewis, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1993]

E-3

(10.6)* Employment Agreement, dated June 30, 1993, by and
between Giddings & Lewis, Inc. and Joseph R. Coppola
[Incorporated by reference to Exhibit 10.1 to
Giddings & Lewis, Inc.'s Quarterly Report on Form 10-
Q for the quarter ended October 3, 1993]

(10.7)* Key Executive Employment and Severance Agreement,
dated as of October 27, 1993, by and between Giddings
& Lewis, Inc. and Joseph R. Coppola [Incorporated by
reference to Exhibit 10.6 to Giddings & Lewis, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended
October 3, 1993]

(10.8)* Employment Agreement by and between Heinz Anders and
Giddings & Lewis GmbH, dated as of January 12, 1994
[Incorporated by reference to Exhibit 10.8 to
Giddings & Lewis, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1994]

(10.9)* Management Incentive Compensation Program
[Incorporated by reference to Exhibit 10.9 to
Giddings & Lewis, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1993]

(10.10)* Supplemental Executive Retirement Plan (covering
officers of the Company other than Joseph R. Coppola)
[Incorporated by reference to Exhibit 10.10 to
Giddings & Lewis, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1993]

(10.11)* Supplemental Retirement Program for Joseph R. Coppola
[Incorporated by reference to Exhibit 10.12 to
Giddings & Lewis, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1993]

(10.12)* Giddings & Lewis, Inc. Deferred Compensation Plan for
Non-Employee Directors [Incorporated by reference to
Exhibit 10.13 to Giddings & Lewis, Inc.'s Annual
Report on Form 10-K for the year ended December 31,
1993]

(10.13)* Giddings & Lewis, Inc. Deferred Compensation Plan and
Trust Agreement [Incorporated by reference to Exhibit
10.14 to Giddings & Lewis, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1993]

(13) Portions of the 1995 Annual Report to Shareholders
that are incorporated by reference herein

(21) List of Subsidiaries of Giddings & Lewis, Inc.

(23) Consent of Ernst & Young LLP

(27) Financial Data Schedule

E-4

(99) Proxy Statement for the 1996 Annual Meeting of
Shareholders

[The Proxy Statement for the 1996 Annual Meeting of
Shareholders will be filed with the Securities and
Exchange Commission under Regulation 14A within 120
days after the end of the Company's fiscal year;
except to the extent incorporated by reference, the
Proxy Statement for the 1996 Annual Meeting of
Shareholders shall not be deemed to be filed with the
Securities and Exchange Commission as part of this
Annual Report on Form 10-K]

____________
* A management contract or compensatory plan or arrangement.