SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).

[X] Definitive proxy statement.

[ ] Definitive additional materials.

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.

Federal Screw Works
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Federal Screw Works
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of filing fee (check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction applies:

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

(2) Aggregate number of securities to which transaction applies:

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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

(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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FEDERAL SCREW WORKS

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To the Shareholders:

Notice is Hereby Given, that the Annual Meeting of Shareholders of FEDERAL
SCREW WORKS, a Michigan corporation, will be held at the offices of the Company,
20229 Nine Mile Road, St. Clair Shores, Michigan 48080, on THURSDAY, OCTOBER 23,
2003 at 10:00 a.m. (Detroit time), for the following purposes:

1. To elect two directors for a term of three years and until their
successors shall be duly elected and qualified.

2. To transact such other business as may properly come before the meeting
or any adjournment thereof.

Shareholders of record at the close of business September 2, 2003 are
entitled to notice of and to vote with respect to this solicitation.
By Order of the Board of Directors,

FEDERAL SCREW WORKS

W. T. ZurSchmiede, Jr., Secretary

Principal executive office:
20229 Nine Mile Road
St. Clair Shores, Michigan 48080-1775
September 23, 2003

PLEASE FILL IN, SIGN AND MAIL PROMPTLY THE
ACCOMPANYING PROXY, WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING.

PROXY STATEMENT

FOR

ANNUAL MEETING OF SHAREHOLDERS

This statement is furnished in connection with the solicitation of Proxies
being made by the Board of Directors of Federal Screw Works (hereinafter
designated the "Company"), to be used at the Annual Meeting of Shareholders of
the Company to be held on THURSDAY, OCTOBER 23, 2003 and at any adjournment or
adjournments of the meeting, for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. The meeting will be held at the
principal executive offices of the Company, 20229 Nine Mile Road, St. Clair
Shores, Michigan 48080-1775.

The Company has only one class of securities, consisting at the close of
business on September 2, 2003 of 1,450,465 issued and outstanding shares of
common stock of the par value of $1.00 per share. Each of the 1,450,465 shares
is entitled to one vote at the Shareholders' meeting. Although the common stock
transfer books will not be closed, only Shareholders of record as of the close
of business on September 2, 2003 are entitled to receive notice of and to vote
with respect to this solicitation. The proxy statement and form of proxy were
first sent or given to security holders on or about September 23, 2003.

Shares cannot be voted at the meeting unless the Shareholder is present or
represented by proxy. Execution and return of a Proxy will not in any way affect
a Shareholder's right to attend the meeting and to vote in person, and a
Shareholder giving a Proxy has the power to revoke it at any time before it is
exercised. Properly executed Proxies in the accompanying form, received before
the close of business October 22, 2003, and not previously revoked, will be
voted at the meeting, or any adjournment of the meeting, as specified in the
meeting.

ELECTION OF DIRECTORS

The Company's Articles of Incorporation and Bylaws provide that the number
of Directors, as determined from time to time by the Board of Directors, may be
increased or decreased, but may not be less than three. The Board of Directors
has fixed the number of Directors at seven. The Board of Directors is divided
into three classes, two classes of two directors each and one class of three
directors. At the 2003 Annual Meeting two Directors will be elected for a
three-year term, and in each case until their successors are elected and
qualified. The nominees are two present Directors of the Company whose terms
expire at the meeting. Other Directors whose terms have not expired will
continue in office in accordance with their previous elections. The favorable
vote of at least two-thirds ( 2/3) of the issued and outstanding shares of
common stock will be required to elect Directors. Votes cast are counted by two
Inspectors of Election, one of which is a representative of EquiServe Trust
Company, the Company's Stock Transfer Agent. Management has nominated for
election the persons named in the following table, which sets forth certain
information about each of the nominees and each Director whose term will
continue after the Annual Meeting. If no specific instructions are given and a
Proxy is properly given, the persons named in the enclosed form of Proxy will
vote such Proxy for the election of the nominees described in the following
table. Although management does not contemplate that any of the nominees will be
unable to serve, in the event that any nominee is unable to serve as Director at
the date of the Annual Meeting, the Proxy will be voted for any other nominee
who may be designated by the present Board of Directors, or the Board of
Directors may appropriately reduce the number of Directors to be elected and to
comprise the Board. The names of such nominees, and of the

Directors who will continue as such for their respective terms, their principal
occupations and the year in which each first became a member of the Board of
Directors of the Company are as follows:

<Table>
<Caption>
TERM DIRECTOR
NAME AND PRINCIPAL OCCUPATION EXPIRES SINCE
----------------------------- ------- --------

Nominees standing for election to term expiring in 2006:
Hugh G. Harness*
Business Consultant. President of the Company, 1985
through Jan. 1994. Executive Vice President, 1982 to
1985; Senior Vice President--Corporate Development,
1976 to 1982; Vice President--Corporate Development,
1975 to 1976, all of the Company. Member of Harness,
Dickey and Pierce law firm, patent counsel to the
Company, 1954 to 1975. Age 72.......................... 2003 1965
Thomas ZurSchmiede*
President & Chief Executive Officer in 2002; President
of the Company 1994 to 2002; Vice President--Big Rapids
Division, 1988-1994; Vice President--Corporate
Development, 1984-1988; Director of Corporate
Development, 1983 to 1984, all of the Company. Age
52..................................................... 2003 1984
Directors continuing in office for their respective terms:
Dr. Thomas W. Butler, Jr.+
President, Thomas W. Butler & Associates, Inc.,
business consultants. Vice President, The Genlyte
Group, 1985 to 1987, manufacturer of lighting systems.
Dean, School of Engineering and Computer Science,
Oakland University, Rochester, Michigan, 1984 to 1985.
Vice President, Engineering and Research, AMF Inc.,
manufacturers of leisure and industrial products, 1974
to 1984. Age 80........................................ 2005 1978
Frank S. Galgan+
President, Beier Howlett, P.C., Bloomfield Hills, MI;
member of the law firm since 1992; member, Freud,
Markus, Slavin & Galgan, P.C., general counsel to the
Company, 1973-1992. Age 62............................. 2004 2001
F. D. Tennent+
Business Consultant. Senior Vice President--Finance &
Secretary of the Company, 1976 to 1986. Treasurer, 1983
to 1986; Vice President--Finance & Secretary-Treasurer
of the Company, 1969 to 1976. Age 77................... 2004 1978
Robert F. ZurSchmiede*
Executive Vice President & Chief Operating Officer in
2002; Vice President--Traverse City Division in 1999
and Romulus Division of the Company 1986 to 2002; Vice
President and General Manager of the Romulus Division,
1984 to 1986; Assistant General Manager of the Romulus
Division, 1983 to 1984; Assistant Manufacturing
Manager, Romulus Division, 1982 to 1983, all of the
Company. Age 50........................................ 2005 1984
W. T. ZurSchmiede, Jr.*
Chairman of the Board, Chief Financial Officer &
Secretary in October 2002; Chairman of the Board &
Chief Executive Officer of the Company 1978 to 2002;
Chief Financial Officer, Secretary and Treasurer, 1988
to 2002; President and Chief Executive Officer of the
Company, 1970 to 1978. Age 77.......................... 2004 1959
</Table>

* Member of Executive Committee of the Company's Board of Directors.

+ Member of Audit Committee of the Company's Board of Directors.

DIRECTOR'S REMUNERATION AND COMMITTEES OF THE BOARD

Directors who are also employees of the Company receive no compensation in
addition to their salaries and benefits received as employees. Directors who are
not employees of the Company are paid a retainer fee of $8,750 quarterly for all
services as a Director. In addition, the Chairman and Vice Chairman of the Audit
Committee receive $5,250 quarterly and members receive $2,000 quarterly. The
Chairman and Vice Chairman of the Compensation Committee receive $1,000
quarterly, and members receive $500 quarterly. The Company has entered into an
agreement with each Director under which the Company confirms to the Director
the indemnification provided for Directors under the Michigan Business
Corporation Act. These agreements also require the Company to secure its
indemnification obligations by bank letters of credit, trusts or other
arrangements.

To attract, retain and motivate service on the Company's Board of
Directors, the Company has a retirement plan for Directors who are not also
employees of the Company. A Director who has served at least five years on the
Board of Directors is entitled to a retirement benefit beginning as of the first
day of the fiscal quarter following the date of termination of his or her
directorship. The benefit will be paid quarterly for a period of time equal to
the years of Board service of the Director, but not to exceed fifteen years (ten
years if the recipient is not the Director or his spouse). Each payment will be
in the amount of the quarterly base retainer fee being paid to the Director at
the time of his or her termination as a Director or $4,500, whichever is
greater. Directors who are former employees of the Company but who have at least
one year of service on the Board as a non-employee of the Company will be
entitled to the same benefits as if all of their Board service had been as a
non-employee. The plan is funded pursuant to the terms of a so-called Rabbi
trust created September 13, 1995. The trust is irrevocable, but in the event all
benefits payable under the plan have been paid, all amounts remaining in the
trust would be returned to the Company. In the event of the insolvency (as
defined in the trust agreement) of the Company, all amounts held in trust would
be subject to the claims of the Company's creditors.

During the fiscal year ended June 30, 2003, the Board of Directors held six
meetings. The Company has standing Audit, Compensation, and Finance Committees,
but does not have a standing Nominating Committee or any Committee performing
similar functions.

The Audit Committee is composed of the following independent directors:
Messrs. Tennent (Chairman), Butler and Galgan (Vice Chairman). The Audit
Committee held five meetings during the year. The Audit Committee is directly
responsible for the appointment, compensation, and oversight of the independent
public accountants, reviews the scope of the Company's annual audit and the
findings of the independent public accountants upon completion of the annual
audit, reviews the independence of the public accountants and considers the
range of their audit and non audit fees, pre-approves all audit and non audit
services, reviews with the independent public accountants and with appropriate
corporate personnel the adequacy of internal procedures, controls and monitors
the Company's policies on management integrity, and is responsible for the
resolution of any disagreement between management and the auditors regarding
financial reporting.

The Finance Committee, comprising Messrs. ZurSchmiede, Jr. (Chairman),
Thomas ZurSchmiede, Harness and Tennent, held two meetings during the year. The
Finance Committee studies and makes recommendations to the Board concerning
fundamental financial policies of the Company with particular attention to the
incurrence of material corporate debt and material capital expenditures.

The Compensation Committee, composed of independent directors, comprising
Messrs. Tennent (Chairman), Butler and Galgan (Vice Chairman) held three
meetings during the year. The Committee approves and recommends the compensation
of all officers, including bonuses, and is responsible for the continuing study
of officer compensation, so that the Company may remain competitive in that
regard.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors ("the Committee") is
composed of three non-employee independent directors. A primary responsibility
of the Committee is to monitor the Company's officer compensation policies and
programs. The Committee approves and recommends to the full Board the
compensation of all officers, the allocation of any cash bonus fund among
officers and the criteria applicable to the accrual of the cash bonus fund. The
Committee is responsible for the continuing study of officer compensation
generally, so that the Company may remain competitive in that regard, and in
doing so engages and consults outside compensation specialists.

OFFICER COMPENSATION POLICY

The compensation of the officers of the Company is based on the Company's
performance and each officer's contribution to the operational success of the
Company as a whole, particularly in view of the very demanding conditions in the
automotive industry. Based on the Company's operating results, and following an
ongoing study of officer compensation in general, and the Company's officer
compensation in particular, as such compensation relates to the Company's
overall performance and the performance of the Company's stock, the Compensation
Committee approved a five percent increase in base salary to each officer named
in the Summary Compensation Table on page 6 of this proxy statement, which
increase was subsequently implemented by the Board of Directors effective
February 1, 2003. The Compensation Committee will continue its evaluation of
each officer's performance under the Company's highly competitive circumstances,
as well as the Company's performance, including improving production
efficiencies with an emphasis on quality and parts requiring high technology.
While the Compensation Committee takes into consideration the factors mentioned
above, the Committee relies to a large degree upon subjective standards and
evaluations, such as an officer's specific responsibilities, experience and
effectiveness, to determine officer compensation.

During fiscal 1998 the Compensation Committee and the Board of Directors
made exhaustive and detailed studies, with its actuaries and consultants, of the
possibility of installing a Supplemental Executive Retirement Plan (SERP) to
replace cash payments made to those employees who are not able to participate
fully, due to certain Internal Revenue Service regulations, in the Company's
long standing Salaried Employees Pension Plan, a defined benefit program. The
studies resulted in the Compensation Committee recommending to the Board of
Directors, and the Board subsequently adopting, a new SERP effective as of July
1, 1998, which SERP is further discussed in this proxy statement on page 10.

The Compensation Committee will continue to emphasize the Company's
long-term performance and increases in shareholder value, will support a bonus
incentive program based on the financial performance of the Company, and will
offer meaningful and competitive retirement and supplemental benefits that are
consistent with the Company's objective of rewarding and retaining key
employees.

The Cash Bonus Plan described in footnote (1) to the Summary Compensation
Table on page 6 was adopted in 1989, amended in 2002, and is similar to a plan
in place for many years prior to 1989. Bonuses awarded under the Plan are
discretionary. The Plan is structured in such a way that no bonus amount is
accrued in any fiscal year unless earnings exceed a base amount equal to eight
percent of shareholders' equity as of the beginning of the year.

CEO COMPENSATION

The compensation of the Chief Executive Officer is approved by the
Compensation Committee and recommended to the Board of Directors (other than the
CEO). The Committee reviews the performance of the CEO and makes recommendations
consistent with the objectives, performance, and results mentioned above. The
Committee engages and consults with outside compensation consultants, and
considers overall competitive compensation arrangements of other automotive
industry suppliers as well as a broad range of companies, some of which may not
be comparable to the Company for Performance Graph purposes. However, because of
the extremely competitive automotive markets served by the Company, the
Committee, as described above relating to other officers, does not specifically
link remuneration of the CEO solely to quantitative measures of performance.
4

In determining the CEO's compensation, the Committee further considers the
Company's improvement, on an operating basis, of its financial position,
improvement in its financial structure, and improvement in shareholder value. As
with the other executives, factors considered by the Committee in recommending
the CEO's compensation to the full Board are generally subjective.

COMPENSATION COMMITTEE

F. D. Tennent, Chairman
Frank S. Galgan, Vice Chairman
Thomas W. Butler, Jr., Member

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Committee Chairman, F.D. Tennent, is a former officer of the Company.
There are no "interlocks" or insider participation as defined by the Securities
and Exchange Commission.

EXECUTIVE COMPENSATION

The following table sets forth information with respect to the compensation
paid by the Company during the Company's last three fiscal years to (i) the
Chief Executive Officer of the Company and (ii) each of the four highest
compensated executive officers of the Company whose compensation exceeded
$100,000.

SUMMARY COMPENSATION TABLE

<Table>
<Caption>
ANNUAL COMPENSATION
---------------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) COMPENSATION(3)
--------------------------- ---- ------ -------- --------------- ---------------

W. T. ZurSchmiede, Jr. ............. 2003 $422,750 $136,700 $40,081 $43,217
Chairman of the Board, Chief 2002 402,333 170,600 40,153 38,072
Financial Officer & Secretary 2001 382,917 180,700 40,886 24,829
Thomas ZurSchmiede.................. 2003 416,750 136,700 48,416 12,495
President & CEO 2002 396,917 170,600 48,504 3,364
2001 377,917 180,700 45,942 2,368
Robert F. ZurSchmiede............... 2003 400,250 136,700 48,079 3,580
Executive Vice President & COO 2002 329,667 170,600 48,165 2,866
2001 313,667 180,700 42,254 2,559
J. M. O'Brien....................... 2003 346,083 136,700 42,755 3,263
Vice President--Sales & Marketing 2002 329,667 170,600 45,500 3,183
2001 313,667 180,700 42,970 2,740
Jeffrey M. Harness.................. 2003 346,083 136,700 33,198 2,106
Vice President--Boyne City,
Chelsea 2002 329,667 170,600 35,338 2,032
and Novex Divisions 2001 313,667 180,700 33,657 1,478
</Table>

- ---------------------
(1) A Cash Bonus Plan, the eligible participants of which are (1) the Chairman,
Chief Financial Officer & Secretary, (2) the President and Chief Executive
Officer, (3) the Executive Vice President and Chief Operating Officer, and
(4) the Vice Presidents of the Company, was adopted in 1989 and amended in
2002 for the year ending June 30, 2003. The formula for the Plan has been in
effect since 1989. The bonus fund is subject to a discretionary award by the
Compensation Committee to those eligible participants recommended by the
Chief Executive Officer. Any accrued bonus fund not awarded may be carried
forward for award in the current or subsequent years. Under the Plan, no
allocation is made to the bonus fund in any fiscal year in which pre-tax
earnings fail to exceed a base amount equal to eight (8%) percent of
beginning of the year shareholders' equity. In any year that pre-tax
earnings exceed the base amount, an allocation is made to the bonus fund
calculated as a percentage of pre-tax earnings, the percentage being equal
to the sum of one percent (1%) plus .04 of one percent (1%) for each $10,000
that pre-tax earnings exceed the base amount. The maximum percentage
allowable is 9 1/2%. For the fiscal year ended June 30, 2003, the base
amount was $4,904,354, the percentage allowance was 9 1/2%, and the fund
allocation was $683,500, all of which was awarded. The Plan has been
continued for the fiscal year to be ended June 30, 2004, with the base
amount of pre-tax earnings required for allocation being decreased to
$4,409,173 as a result of a $6,189,766 reduction in shareholders' equity.
Pre-tax earnings is defined to exclude the effect of FAS 106.

(2) The amount shown for each officer in 2003 includes special payments to
assist them in obtaining life insurance in lieu of the Company undertaking
such expense directly, and gross-up payments for tax liabilities on such
insurance premium payments, at each officer's effective tax rate, as
follows: W. T. ZurSchmiede, Jr., $22,385 (premium), $17,696 (tax liability
gross-up); J. M. O'Brien, $25,418 and $17,337; Jeffrey M. Harness, $19,736
and $13,462; Thomas ZurSchmiede, $26,556 and $21,860; and Robert F.
ZurSchmiede, $26,852 and $21,227.

(3) The amounts shown consist of the Company-paid portion of premiums on term
life insurance, and for Thomas ZurSchmiede, includes $9,116 for legal and
consulting fees for estate planning.

COMPARATIVE PERFORMANCE GRAPH

The graph below compares the cumulative total shareholder return on the
common stock of the Company for the last five fiscal years with the cumulative
total return on the S&P 500 Index and a Peer Group over the same period
(assuming initial investment of $100 in the Company's common stock, the S&P 500
Index and the Peer Group, and reinvestment of all dividends).

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
ASSUMES INITIAL INVESTMENT OF $100 AND REINVESTMENT OF DIVIDENDS

[PERFORMANCE GRAPH]

<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
- -----------------------------------------------------------------------------------------------------------

FEDERAL SCREW WORKS $100.00 $103.37 $ 91.16 $101.88 $117.00 $140.11
- -----------------------------------------------------------------------------------------------------------
S&P 500 INDEX $100.00 $122.76 $131.66 $112.13 $ 91.97 $ 92.20
- -----------------------------------------------------------------------------------------------------------
PEER GROUP (1) $100.00 $125.31 $169.65 $176.92 $163.66 $122.74
- -----------------------------------------------------------------------------------------------------------
</Table>

(1) The Peer Group for the graph shown above includes Chicago Rivet & Machine
Co., Penn Engineering & Manufacturing Corp., SPS Technologies, SPX Corp.,
Park Ohio Holdings, Inc., and Hastings Mfg. Co.

In determining the Peer Group, the Company selected primarily automotive
suppliers, companies which may be considered generally comparable in size or
larger, with similar labor markets, are direct or partial competitors to the
Company, are primarily metal working companies, and companies with a steady
record of earnings. The index is weighted based upon the beginning of period
market capitalization values.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The Company's common stock is the Company's only voting security. The
following table sets forth information with respect to beneficial ownership of
the Company's common stock by any shareholder known to the Company to be the
beneficial owner of more than five percent of its common stock. Unless otherwise
indicated in the footnotes below, the number of shares is as of September 2,
2003. The percentage of class is based on 1,450,465 shares of the Company's
common stock outstanding on September 2, 2003. Except as otherwise indicated,
each person has sole investment power with respect to all shares beneficially
owned by such person.

<Table>
<Caption>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------- ----------------------- --------

Dimensional Fund Advisors Inc. 101,875(1) 7.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
FMR Corp. 156,250(2) 10.8%
82 Devonshire Street
Boston, Massachusetts 02109-3614
Athena Capital Management, Inc. 88,339(3) 6.1%
4 Tower Bridge, #222
200 Barr Harbor Drive
West Conshohocken, Pennsylvania 19428
Robert F. ZurSchmiede (4) 129,471 8.9%
Hugh G. Harness (4) 159,140 11.0%
W.T. ZurSchmiede, Jr. (4) 205,499 14.2%
Thomas ZurSchmiede (4) 109,496 7.5%
</Table>

- ---------------------
(1) Based upon information contained in Schedule 13G/A filed on February 3,
2003, and the Company's five for four stock split, distributed on April 1,
2003 to shareholders of record on March 3, 2003. Dimensional Fund Advisors
Inc. ("Dimensional") furnishes investment advise to four investment
companies registered under the Investment Company Act of 1940, and serves as
investment manager to certain other commingled group trusts and separate
accounts (the "Funds") and possesses sole voting and/or investment power
over securities of the Company described in the schedule that are owned by
the Funds. All securities reported in the schedule are owned by the Funds,
none of which, to the knowledge of Dimensional, individually owns more than
five percent of the shares of the Company's common stock. Dimensional
disclaims beneficial ownership of all such securities.

(2) Based upon information contained in Schedule 13G/A filed on February 14,
2003, and the Company's five for four stock split, distributed on April 1,
2003 to shareholders of record on March 3, 2003. Fidelity Management &
Research Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp.
("FMR") and an investment advisor registered under the Investment Advisors
Act of 1940, is the beneficial owner of the Company's common stock as a
result of acting as investment advisor to various investment companies
registered under the Investment Company Act (collectively, the "Funds"),
which directly owns the shares of Company common stock. Edward C. Johnson
3d, Chairman of FMR ("Johnson") and FMR, through their control of Fidelity,
and the Funds each has sole power to dispose of the shares of Company common
stock owned by the Funds. Neither FMR nor Johnson has the sole power to vote
or direct the voting of the shares owned directly by the Funds, which power
resides with the Funds' Board of Trustees. Fidelity carries out the voting
of the shares under written guidelines established by the Funds' Board of
Trustees.

(3) Based upon information contained in Schedule 13G/A filed on January 23,
2003, and the Company's five for four stock split, distributed on April 1,
2003 to shareholders of record on March 3, 2003.

(4) The Company's mailing address may be used for these shareholders. The nature
of beneficial ownership for these shareholders is set forth in the footnotes
under "Security Ownership of Management."

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth the number of shares of the Company's common
stock beneficially owned as of September 2, 2003 by each director, each officer
named in the Summary Compensation Table, and directors and officers of the
Company as a group. The percent of class is based on 1,450,465 shares of common
stock outstanding on September 2, 2003.

<Table>
<Caption>
AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNERSHIP OF CLASS
----------------------- --------

Directors and Officers who are Directors:
Dr. Thomas W. Butler, Jr. ................................ 1,875 less than 1%
Frank S. Galgan........................................... 250 less than 1%
Hugh G. Harness........................................... 159,140(1) 11.0%
F. D. Tennent............................................. 1,562 less than 1%
W. T. ZurSchmiede, Jr. ................................... 205,499(2) 14.2%
Thomas ZurSchmiede........................................ 109,496(3) 7.5%
Robert F. ZurSchmiede..................................... 129,471(4) 8.9%
Officers who are not Directors:
J. M. O'Brien............................................. 32,812 2.3%
Vice President--Sales and Marketing of the Company
since 1986; Vice President--General Sales Manager, 1984
to 1986.
Jeffrey M. Harness........................................ 46,183 3.2%
Vice President and General Manager--Chelsea Division
and Brighton Division of the Company since 1994; Vice
President and General Manager--Chelsea Division, 1992
to 1994; General Manager--Chelsea Division, 1985 to
1992.
Wade C. Plaskey........................................... 1,875 less than 1%
Treasurer & Corporate Controller in October 2002;
Corporate Controller, 1992 to 2002; Group Controller,
1986 to 1992, all of the Company.
All Directors and Officers of the Company as a group........ 670,353 46.2%
</Table>

- ---------------------
(1) Includes 34,183 shares as to which Mr. Harness has sole voting and
investment power. Also includes 61,915 shares owned by Mr. Harness' wife,
30,857 shares owned by his children, and 21,875 shares owned by a Trust for
Descendants, the beneficial ownership of which may be attributable to Mr.
Harness, and 10,310 shares owned by the W. T. ZurSchmiede, Sr. Foundation,
of which Mr. and Mrs. Harness and Mr. ZurSchmiede, Jr. comprise the three
Trustees. Mr. Harness disclaims beneficial ownership of all but 34,183
shares owned by him. 10,310 of the shares attributed to Mr. Harness are also
attributed to Mr. ZurSchmiede, Jr., who shares the related voting and
investment power. Mr. Harness is Mr. ZurSchmiede, Jr.'s brother-in-law. The
elimination of duplicate holdings reduces the percent of class to 10.3%.

(2) Includes 9,998 shares as to which Mr. ZurSchmiede has sole voting and
investment power. Also includes 185,191 shares owned by Mr. ZurSchmiede's
daughters and their spouses, individually and as custodian for
grandchildren, and 10,310 shares owned by the W. T. ZurSchmiede, Sr.
Foundation, of which he is a Trustee, the beneficial ownership of all of
which may be attributable to Mr. ZurSchmiede. Mr. ZurSchmiede disclaims
beneficial ownership of all but 9,998 shares owned by him. 10,310 of the
shares attributed to Mr. ZurSchmiede are also attributed to Mr. Harness, who
shares the related voting and investment power. The elimination of duplicate
holdings reduces the percent of class to 13.4%.

(3) Includes 101,996 shares as to which Mr. ZurSchmiede has sole voting and
investment power. Also includes 7,500 shares held as co-trustee for a niece
and nephews, which shares are also attributable to Robert F. ZurSchmiede,
who shares the related voting and investment powers. Mr. ZurSchmiede
disclaims beneficial ownership of all but 101,996 shares owned by him. Mr.
ZurSchmiede is a son of W. T. ZurSchmiede, Jr. The elimination of duplicate
holdings reduces the percentage of class to 7%.

(4) Includes 121,971 shares as to which Mr. ZurSchmiede has sole voting and
investment power, 44,528 of which he holds as custodian for his children,
the beneficial ownership of which may be attributable to Mr. ZurSchmiede.
Also includes 7,500 shares held as co-trustee for a niece and nephews, which
shares are also attributable to Thomas ZurSchmiede, who shares the related
voting and investment powers. Mr. ZurSchmiede disclaims beneficial ownership
of all but 77,443 shares owned by him. Mr. ZurSchmiede is a son of W. T.
ZurSchmiede, Jr. The elimination of duplicate holdings reduces the
percentage of class to 8.4%.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Hugh G. Harness took early retirement as President and COO of the
Company effective February 1, 1994. Mr. Harness agreed to perform consulting
services for the Company for eight years with compensation for those services
commencing in 1994 at $130,200, with annual reductions of $5,000 a year to
$95,200 in 2001. Mr. Harness' monthly retirement supplement is $4,000, payable
for 120 months, commencing at his retirement. Mr. Harness' participation in the
Cash Bonus Plan was terminated.

Following consideration and approval by the Compensation Committee, the
consulting agreement was extended by the Board of Directors for a five year term
from February 1, 2002, at the annual rate set in the last year of the prior
agreement, which was $95,200.

RETIREMENT SUPPLEMENT

In 1986, W. T. ZurSchmiede, Jr. entered into an agreement with the Company
pursuant to which he has earned supplemental retirement and death benefits by
serving continuously in the Company's employment from that time until age 65.
Supplemental retirement benefits under the agreement are payable monthly after
Mr. ZurSchmiede's retirement for 120 months, but the Company may terminate such
payments if Mr. ZurSchmiede fails or refuses to provide advice and counsel to
the Company after retirement when reasonably asked to do so. The monthly benefit
of $4,166 under the original agreement has been increased to $5,416 by amendment
adopted by the Company in 1998. In the event of Mr. ZurSchmiede's death, his
designated beneficiary is entitled to a supplemental death benefit equal to the
balance of any unpaid monthly retirement benefits. All benefits have been
charged to operations in prior years.

SALARIED PENSION PLAN

The Company maintains a Salaried Pension Plan, which covers all salaried
employees. The remuneration covered by the qualified Plan is base salary only.
The approximate years of credited service for the officers named in the Summary
Compensation Table are: Robert F. ZurSchmiede, 25; Thomas ZurSchmiede, 22; J. M.
O'Brien, 28; Jeffrey M. Harness, 23. Effective July 1, 1998, the maximum salary
taken into account in calculating plan benefits is limited to $80,000, in order
to comply with requirements of the Internal Revenue Code. Company contributions
are computed on an actuarial basis which provides for fixed benefits in the
event of retirement at a specific age or after a specified number of years of
service. Contributions by the Company are, therefore, made to the Plan in the
aggregate and the amount of the contribution, payment, or accrual in respect of
a specified person is not and cannot readily be separately or individually
calculated by the regular actuaries for the Plan.

In addition, effective July 1, 1998, the Company established a Supplemental
Executive Retirement Plan, (SERP) for the benefit of certain participants
designated by the Compensation Committee. The SERP benefit is equal to the
difference between the normal monthly benefit received under the Pension Plan
and the unrestricted benefit. The unrestricted benefit is equal to the monthly
pension benefit as determined under the

qualified Pension Plan calculated using the average base and bonus compensation
for the five highest paid plan years without regard to compensation limits.

The following table illustrates representative retirement benefits at the
maximum levels payable under the Salaried Pension Plan and the Supplemental
Executive Retirement Plan for various earnings and credited service periods:

<Table>
<Caption>
AVERAGE
COMPENSATION
DURING THE FIVE
HIGHEST PAID ANNUAL NORMAL RETIREMENT BENEFITS
PLAN YEARS (1) FOR YEARS OF CREDITED SERVICE INDICATED(2)
--------------- --------------------------------------------------
15 20 25 30
-- -- -- --

$ 80,000....................... $ 22,800 $ 30,400 $ 38,000 $ 38,000
$100,000....................... $ 28,500 $ 38,000 $ 47,500 $ 47,500
$200,000....................... $ 57,000 $ 76,000 $ 95,000 $ 95,000
$300,000....................... $ 85,500 $114,000 $142,500 $142,500
$400,000....................... $114,000 $152,000 $190,000 $190,000
$500,000....................... $142,500 $190,000 $237,500 $237,500
$600,000....................... $171,000 $228,000 $285,000 $285,000
$700,000....................... $199,500 $266,000 $332,500 $332,500
$800,000....................... $228,000 $304,000 $380,000 $380,000
</Table>

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(1) The Compensation covered by the Plans under which the benefits are
summarized in the table above equals the sum of base salary and annual bonus
payments, as reported in the Summary Compensation Table for the named
executive officers for the last three fiscal years, and is equal to the
average of such amounts during the highest paid five years of employment.

(2) Payable on a Life and 10 Year Certain basis. Life Only Option is not
available under the Plan. For married participants, however, the form of
benefit payment is the qualified 50% or 100% Joint and Survivor Annuity,
unless another form is elected. Benefits are increased actuarially for late
retirement. The benefit amounts set forth are not subject to any reduction
for Social Security benefits.

401K SAVINGS PLAN

The Company adopted, effective September 1, 1993, a 401(k) tax deferred
savings plan. This plan is available to all eligible employees, including
employees who are participants in the plan in accordance with their union
contract. The plan is non-contributory, that is, the Company does not match any
portion of the employees' contributions. The Company does, however, bear the
costs of administering the plan, which are expected to be about $19,000 per
year. Employees may contribute up to 20% of their annual compensation, but not
more than the maximum amount permitted under the Internal Revenue Code. Comerica
Bank is the Trustee of the plan. Contributions are invested in one or more of
sixteen mutual funds, administered by Comerica Bank, as selected by each
employee.

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS AND FEES PAID

The Audit Committee has approved and the Board of Directors has reappointed
Ernst & Young LLP as independent accountants to audit the financial statements
of the Company for the current fiscal year, and to review financial statements
contained in the Company's interim period reports on Form 10Q in accordance with
the Statement on Auditing Standards No. 71.

Audit Fees

Total fees paid to Ernst & Young by the Company for its audit of the
Company's fiscal 2003 financial statements and for its review of financial
statements on Form 10Q were $78,000.

Financial Information Systems Design and Implementation Fees

The Company did not pay any fees to Ernst & Young in fiscal 2003 for
financial information systems design and implementation services.

All Other Fees

The total fees paid to Ernst & Young for all other services for fiscal 2003
were $54,000, of which $39,000 was audit related and $15,000 was for tax
consulting.

One or more members of the firm of Ernst & Young are expected to be present
at the Company's Annual Meeting of Shareholders, will be available to respond to
appropriate questions, and will be afforded the opportunity to make a statement.

The Audit Committee of the Board does not consider the providing of
services described above by Ernst & Young to be incompatible with the
maintenance of independence by Ernst & Young.

AUDIT COMMITTEE REPORT

In accordance with the written Charter adopted by the Board of Directors,
the Audit Committee, composed of outside independent directors (as defined in
Rule 4200(a)(14) of the National Association of Securities Dealers Listing
Standards) oversees the Company's financial reporting process and is responsible
for the oversight of the auditor. Management has the primary responsibility for
the financial statements and the reporting process, including the Company's
system of internal controls.

In discharging its oversight responsibility as to the audit process, the
Audit Committee reviewed the audited financial statements in the Company's 2003
Annual Report with management, including a discussion of the quality, and the
acceptability, of the financial statements. The Committee also considered the
reasonableness of significant judgements, and the clarity of disclosures in the
financial statements.

The Audit Committee received from the Company's independent auditors the
written disclosures and letter required by the Independence Standard Board
regarding independence discussions with the Committee, discussed with the
auditors any relationships that may impact their objectivity and independence,
and satisfied itself as to the auditor's independence.

The Audit Committee discussed with the auditors reporting and auditing
matters as required by the Statement on Auditing Standards No. 61 "Communication
with Audit Committees," including their judgement as to the quality and
acceptability of the Company's financial reporting, under generally accepted
auditing standards.

The Committee meets regularly with the independent auditors, with and
without management present, to discuss the results of their examinations, their
evaluation of the Company's internal controls, and the overall quality of the
Company's financial reporting.

In reliance on the aforementioned reviews and discussions with management
and the independent auditors, the Audit Committee recommended to the Board of
Directors that the Company's audited financial statements be included in its
Annual Report on Form 10K for filing with the Securities and Exchange Commission
for the fiscal year ended June 30, 2003.

F. D. Tennent, Chairman
Frank S. Galgan, Vice Chairman
Thomas W. Butler, Jr., Member

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Under Section 16(a) of the Securities Exchange Act of 1934, the Company's
directors and its officers and persons who own more than ten percent of the
Company's equity securities are required to report ownership of the Company's
common stock and any changes in that ownership to the Securities and Exchange
Commission and to furnish to the Company copies of all Section 16(a) forms they
file. Based solely on review of the copies of such forms furnished to the
Company, and written representations of its directors and executive officers,
the Company believes that during the fiscal year ended June 30, 2003 those
filing requirements were met.

CONCERNING OTHER MATTERS WHICH MAY COME BEFORE THE MEETING

At the meeting, reports will be received from the officers of the Company
relative to the operation, management and conduct of the Company during the
fiscal year ended June 30, 2003, but it is not contemplated that there will be
any vote in respect of any of said matters. Management is not aware of any other
matters to be presented for action at the meeting. However, should any other
matters requiring the vote of the Shareholders arise, the persons named in the
enclosed form of Proxy will vote such Proxy according to their best judgment.

PROPOSALS FOR 2004 ANNUAL MEETING

Shareholder proposals pursuant to Rule 14a-8 promulgated under the
Securities Exchange Act of 1934 must be received by the Company no later than
May 29, 2004 in order to be included in the Company's Proxy Statement and Form
of Proxy for that meeting. Such proposals must also meet the other requirements
of the rules of the Securities and Exchange Commission relating to shareholder's
proposals. Shareholder proposals intended to be presented at the 2004 annual
meeting which are not eligible for inclusion in the Company's Proxy Statement
for that meeting under Rule 14a-8 are considered untimely under Rule 14a-5
promulgated under the Securities Exchange Act of 1934 unless received by the
Company no later than August 12, 2004. The Company expects the persons named as
proxies for the 2004 Annual Meeting of Shareholders to use their discretionary
voting authority with respect to any proposal considered untimely at the 2004
annual meeting.

CONCERNING EXPENSES OF PROXY SOLICITATION

The cost of soliciting Proxies will be borne by the Company. Proxies may be
solicited by mail, telegraph or telex, or by directors, officers and regular
employees of the Company in person or by telephone. The Company's officers,
directors and employees will not be additionally compensated but may be
reimbursed for out-of-pocket expenses in connection with such solicitations. The
Company has retained the services of Georgeson Shareholder Communications, Inc.
to assist in the distribution of Proxy materials and to solicit Proxies from
banks, brokers and nominees at a cost not to exceed $4,500 plus reasonable
out-of-pocket expenses. The Company will also reimburse brokerage houses and
other custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for forwarding the Proxy Statement and the Annual Report to the
beneficial owners of common stock of the Company.

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY TO ASSURE THAT A QUORUM
OF THE COMPANY'S SHARES BE REPRESENTED AT THE ANNUAL MEETING. SHAREHOLDERS WHO
DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO EXECUTE AND RETURN,
WITHOUT DELAY, THE ENCLOSED FORM OF PROXY IN THE ENCLOSED, STAMPED ENVELOPE.

By Order of the Board of Directors

W. T. ZurSchmiede, Jr., Secretary

September 23, 2003

P.S. Although not a part of the Proxy soliciting material, a copy of the
Company's Annual Report for the fiscal year ended June 30, 2003 is enclosed
herewith.
13

FSWCM-PS-03

FEDERAL SCREW WORKS

C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694

DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL ZFSW11

PLEASE MARK
[X] VOTES AS IN | 3361
THIS EXAMPLE. |
--------

- ---------------------------------------------
FEDERAL SCREW WORKS
- ---------------------------------------------

1. Election of Directors. 2. To act in their discretion upon the transaction of such other
NOMINEES: (01) Hugh G. Harness business as may properly come before the meeting.
(02) Thomas ZurSchmiede

FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES

[ ]__________________________________________
For all nominee(s) except as written above

Mark box at right if an address change has been noted on the
reverse side of this card. [ ]

PLEASE BE SURE TO SIGN AND DATE THIS PROXY.

Signature:___________________ Date:________ Signature:_____________________ Date:________

DETACH HERE ZFSW12

FEDERAL SCREW WORKS

The undersigned hereby constitutes and appoints Frank S. Galgan and Robert
ZurSchmiede or either of them, attorneys and proxies with full power of
substitution to vote at the Annual Meeting of Shareholders of Federal Screw
Works, to be held on Thursday, October 23, 2003, or at any adjournments thereof.

The shares represented by this proxy will be voted as directed. Unless authority
is withheld, this proxy will be voted to elect as directors the nominees shown.

Discretionary authority is hereby conferred as to any other matters as may
properly come before the meeting. The undersigned acknowledges receipt of the
Notice of Annual Meeting of Shareholders, the Proxy Statement dated September
23, 2003 and the Annual Report of Federal Screw Works to its shareholders for
the year ended June 30, 2003. The undersigned ratifies that all the proxies or
any of them or their substitutes may lawfully do or cause to be done by virtue
hereof and revokes all former proxies.

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PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
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Please sign exactly as your name appears on the books of the Company. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
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