AMENDMENT NO. 2 TO
                                 EMPLOYMENT AGREEMENT

     This Amendment No. 2 to Employment Agreement (the "Amendment") is made 
and entered into this 10th day of September, 1998, by and between Atchison 
Casting Corporation, a Kansas corporation (the "Company"), and Hugh H. Aiken 
(the "Employee").

     WHEREAS, the Company and the Employee entered into an Employment 
Agreement dated as of June 14, 1991, which was amended to extend the term of 
such agreement through June 14, 1998 (as amended, the "Employment 
Agreement"), relating to the employment of the Employee as the Chief 
Executive Officer of the Company; and

     WHEREAS, the Company and the Employee desire and agree to amend the 
Employment Agreement in the manner set forth in this Amendment;

     NOW, THEREFORE, in consideration of mutual covenants and other good and 
valuable consideration, the receipt and legal sufficiency of which are hereby 
acknowledged, the parties hereby agree as follows:

     1.   EXTENSION OF TERM OF EMPLOYMENT.  Section 1 of the Employment 
Agreement is deleted in its entirety and is hereby replaced with the 
following:

          1.   TERM.  The Company shall employ the Employee for a
          term commencing upon the date of this Agreement and
          continuing through June 30, 2001.  This Agreement shall be
          considered renewed for a continuing three-year term on the
          30th of June of each year hereafter unless the Company or
          the Employee provides six months notice to the other party
          that such party intends to terminate this Agreement.  

     2.   EFFECTIVE DATE.  This Amendment shall be effective as of June 14,
     1998.  

     3.   GENERAL.  Except as expressly provided herein, the Employment 
Agreement shall continue in full force and effect as modified hereby.      




     IN WITNESS WHEREOF, the parties have executed this Amendment as of the 
day and year first written above.

                                   ATCHISON CASTING CORPORATION

                                   By:  /s/ Kevin T. McDermed
                                        --------------------------------

                                   Name:   Kevin T. McDermed
                                        --------------------------------
                                   Title: V. P. & Treasurer
                                        --------------------------------


                                   /s/ Hugh H. Aiken
                                   -------------------------------------
                                   Hugh H. Aiken