
     SECOND AMENDMENT, dated as of January 16, 1996 (the "AMENDMENT"), to the
Credit Agreement, dated as of December 7, 1994 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT" terms not otherwise
defined herein shall be used herein as therein defined), among:

(i)  BORG-WARNER AUTOMOTIVE, INC., a Delaware Corporation (the "BORROWER");

(ii) the several banks and other financial institutions from time to time
parties to the Credit Agreement (the "LENDERS");

(iii)     BANK OF MONTREAL, CREDIT LYONNAIS, CHICAGO AND CAYMAN ISLAND BRANCHES,
THE INDUSTRIAL BANK OF JAPAN, LTD., THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED,
NATIONSBANK OF NORTH CAROLINA, N.A., THE SUMITOMO BANK, LIMITED, CHICAGO BRANCH,
BANK OF AMERICA ILLINOIS, and THE FUJI BANK, LIMITED, as lead managers
thereunder (the "LEAD MANAGERS");

(iv) CHEMICAL BANK, a New York banking corporation ("CHEMICAL"), and THE BANK OF
NOVA SCOTIA, a Canadian chartered bank ("SCOTIABANK"), as co-arrangers
thereunder (in such capacity, the "CO-ARRANGERS");

(v)  SCOTIABANK, as documentation agent for the Lenders thereunder (in such
capacity, the "DOCUMENTATION AGENT"); and

(vi) CHEMICAL, as administrative agent for the Lenders thereunder (in such
capacity, the "ADMINISTRATIVE AGENT").

                                W I T N E S S E T H :

     WHEREAS, the Borrower has requested that the Credit Agreement be amended to
allow for projections of the operating budget and cash flow budget of the
Borrower and its Subsidiaries to be delivered no later than 90 days after the
beginning of the Borrower's fiscal year;

     WHEREAS, the Borrower, the Administrative Agent and the Majority Lenders
have agreed to so amend the Credit Agreement on the terms set forth below;

     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:

     1.   AMENDMENT TO SUBSECTION 9.2 OF THE CREDIT AGREEMENT.  Subsection
9.2(c) of the Credit Agreement is hereby amended by deleting the paragraph in
its entirety and replacing it with the following paragraph (c):

     (c) as soon as available, but in any event no later than 90 days after the
beginning of each fiscal year of the Borrower, a copy of the projections by the
Borrower of the operating  budget and cash flow budget of the Borrower and its
Subsidiaries (the "Projections") for each fiscal year; provided, however, that
the Borrower shall not be obligated to furnish any such Projections unless the
board of directors of the Borrower has reviewed and approved them;

     2.   REPRESENTATIONS; NO DEFAULT.  On and as of the date hereof, and after
giving effect to this Amendment, the Borrower confirms, reaffirms and restates
that the representations and warranties set forth in Section 7 of the Credit
Agreement and in the other Loan Documents are true and correct in all material
respects, provided that the references to the Credit Agreement therein shall be
deemed to be references to this Amendment and to the Credit Agreement as amended
by this Amendment.  

     3.   CONDITIONS TO EFFECTIVENESS.  This Amendment shall become effective on
and as of the date (the "AMENDMENT EFFECTIVE DATE") that the Administrative
Agent shall have received counterparts of this Amendment, duly executed and
delivered by a duly authorized officer of each of the Borrower, the
Administrative Agent, and the Majority Lenders, along with the written consent
of each Subsidiary Guarantor in the form attached hereto.

     4.   SCOPE.  The Amendment is to be narrowly construed.  Except as
expressly amended and waived herein, all of the covenants and provisions of the
Credit Agreement are and shall continue to be in full force and effect.

     5.   GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     6.   COUNTERPARTS.  This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

<PAGE>
     IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly
executed and delivered as of the date first above written.

                              BORG-WARNER AUTOMOTIVE, INC.

                               By:ROBIN J. ADAMS
                              ----------------------------------------------
                              Robin J. Adams 
                              Title: Vice President and Treasurer

                              CHEMICAL BANK, as Administrative Agent,
                              as a Co-Arranger and as a Lender

                         By:  CHEMICAL BANK
                              ------------------------------------------------- 
                              Chemical Bank
                              Title:

                              THE BANK OF NOVA SCOTIA, as a Co-Arranger,
                              as Documentation Agent and as a Lender

                         By:  THE BANK OF NOVA SCOTIA
                              --------------------------------------------------
                              The Bank of Nova Scotia   
                              Title:

                              BANK OF MONTREAL, as a Lead Manager and
                              as a Lender

                         By:  BANK OF MONTREAL
                              -------------------------------------------------
                              Bank of Montreal
                              Title:

                              CREDIT LYONNAIS, CHICAGO BRANCH, as a
                              Lead Manager and as a Lender

                         By:  CREDIT LYONNAIS, CHICAGO BRANCH
                              ----------------------------------------------
                              Credit Lyonnais, Chicago Branch  
                              Title:

                         CREDIT LYONNAIS, CAYMAN ISLAND BRANCH,
                         as a Lead Manager and as a Lender

                    By:  CREDIT LYONNAIS, CAYMAN ISLAND BRANCH
                         ----------------------------------------------------
                         Credit Lyonnais, Cayman Island Branch
                         Title:

                         THE INDUSTRIAL BANK OF JAPAN, LIMITED
                         as a Lead Manager and as a Lender

                    By:  THE INDUSTRIAL BANK OF JAPAN, LIMITED
                         ------------------------------------------------------
                         The Industrial Bank of Japan, Limited
                         Title:

                         THE LONG-TERM CREDIT BANK OF JAPAN, LTD. 
                         as a Lead Manager and as a Lender

                    By:  THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
                         -------------------------------------------------------
                         The Long-Term Credit Bank of Japan, Ltd.
                         Title:

                         NATIONSBANK, N.A.
                         as a Lead Manager and as a Lender

                    By:  NATIONSBANK, N.A.
                         -----------------------------------------------------
                         Nationsbank, N.A.
                         Title:

                         THE SUMITOMO BANK, LIMITED, CHICAGO
                         BRANCH, as a Lead Manager and as a Lender

                    By:  THE SUMITOMO BANK, LIMITED, CHICAGO
                         ------------------------------------------------------
                         The Sumitomo Bank, Limited, Chicago
                         Title:

                         BANK OF AMERICA ILLINOIS, as a Lead Manager
                         and as a Lender
<PAGE>
                    By:  BANK OF AMERICA ILLINOIS
                         -----------------------------------------------------
                         Bank of America Illinois 
                         Title:

                         THE FUJI BANK, LIMITED, as a Lead
                         Manager and as a Lender

                    By:  THE FUJI BANK, LIMITED
                         ---------------------------------------------------- 
                         The Fuji Bank, Limited
                         Title:

                         THE BANK OF NEW YORK

                    By:  THE BANK OF NEW YORK
                         -----------------------------------------------------
                         The Bank of New York
                         Title:

                         THE FIRST NATIONAL BANK OF CHICAGO

                    By:  THE FIRST NATIONAL BANK OF CHICAGO
                         --------------------------------------------------     
                         The First National Bank of Chicago   
                         Title:

                         MELLON BANK, N.A.

                    By:  MELLON BANK, N.A.
                         -------------------------------------------------------
                         Mellon Bank, N.A.
                         Title:
<PAGE>

                         NATIONAL BANK OF DETROIT

                    By:  NATIONAL BANK OF DETROIT
                         -----------------------------------------------------
                         National Bank of Detroit 
                         Title:

                         TORONTO DOMINION (TEXAS), INC.
     
                    By:  TORONTO DOMINION (TEXAS), INC.
                         -------------------------------------------------------
                         Toronto Dominion (Texas), Inc.     
                         Title:

                         BANK OF HAWAII

                    By:  BANK OF HAWAII
                         -------------------------------------------------------
                         Bank of Hawaii
                         Title:

                         BANK OF TOKYO, LTD., CHICAGO BRANCH

                    By:  BANK OF TOKYO, LTD., CHICAGO BRANCH
                         -------------------------------------------------------
                         Bank of Tokyo, Ltd., Chicago Branch
                         Title:

                         BARCLAYS BANK PLC

                    By:  BARCLAYS BANK PLC
                         -------------------------------------------------------
                         Barclays Bank PLC
                         Title:
<PAGE>
                         CAISSE NATIONALE DE CREDIT AGRICOLE

                    By:  CAISSE NATIONALE DE CREDIT AGRICOLE
                         -----------------------------------------------------
                         Caisse Nationale De Credit Agricole     
                         Title:


                         THE NORTHERN TRUST COMPANY

                    By:  THE NORTHERN TRUST COMPANY
                         -------------------------------------------------------
                         The Northern Trust Company
                         Title:

                         THE SANWA BANK, LIMITED, CHICAGO BRANCH

                    By:  THE SANWA BANK, LIMITED, CHICAGO BRANCH
                         ------------------------------------------------------
                         The Sanwa Bank, Limited, Chicago Branch
                         Title:

<PAGE>
                                       CONSENT

     Each of the undersigned Subsidiary Guarantors hereby consents and agrees to
the provisions of the foregoing Amendment, and hereby affirms that upon the
effectiveness of the foregoing Amendment, each Loan Document to which it is a
party shall continue to be, and shall remain, in full force and effect.

                         BORG-WARNER AUTOMOTIVE DIVERSIFIED
                         TRANSMISSION PRODUCTS CORPORATION

                         By: ROBIN J. ADAMS
                         ----------------------------------------------------   
                         Robin J. Adams
                         Title: Vice President

                         BORG-WARNER AUTOMOTIVE POWERTRAIN
                         SYSTEMS CORPORATION
                              
                         By: ROBIN J. ADAMS
                         ----------------------------------------------------   
                         Robin J. Adams
                         Title: Vice President

                         BORG-WARNER AUTOMOTIVE JAPAN
                         CORPORATION

                         By: ROBIN J. ADAMS
                         ----------------------------------------------------   
                         Robin J. Adams
                         Title: Vice President
                              
                         BORG-WARNER AUTOMOTIVE POWDERED
                         METALS CORPORATION

                         By: ROBIN J. ADAMS
                         ----------------------------------------------------   
                         Robin J. Adams
                         Title: Vice President
     <PAGE>
                                   
                         BORG-WARNER AUTOMOTIVE AUTOMATIC
                         TRANSMISSION SYSTEMS CORPORATION

                         By: ROBIN J. ADAMS
                         ----------------------------------------------------   
                         Robin J. Adams
                         Title: Vice President

                         BORG-WARNER AUTOMOTIVE CONTROL
                         SYSTEMS CORPORATION

                         By: ROBIN J. ADAMS
                         ----------------------------------------------------   
                         Robin J. Adams
                         Title: Vice President

                         BORG-WARNER AUTOMOTIVE MORSE TEC
                         CORPORATION
                         
                         By: ROBIN J. ADAMS
                         ----------------------------------------------------   
                         Robin J. Adams
                         Title: Vice President
     
                         
