UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


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

                For the quarterly period ended: December 31, 1999

                                       OR

          [ ] 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 0-18083


                            Williams Controls, Inc.
             (Exact name of registrant as specified in its charter)

             Delaware                                             84-1099587
  -------------------------------                            -------------------
  (State or other jurisdiction of                              (I.R.S. Employer
   incorporation or organization)                            Identification No.)

14100 SW 72nd Avenue, Portland, Oregon                              97224
---------------------------------------                           ----------
(Address of principal executive office)                           (zip code)

               Registrant's telephone number, including area code:
                                 (503) 684-8600


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
                                      ---     ---

The number of shares outstanding of the registrant's  common stock as of January
31, 2000: 19,917,478


<PAGE>


                             Williams Controls, Inc.

                                      Index


                                                                           Page
                                                                          Number

Part I.  Financial Information

  Item 1.  Financial Statements

           Consolidated Balance Sheets, December 31, 1999
             (unaudited) and September 30, 1999                             1

           Unaudited Consolidated Statements of Operations,
             three months ended December 31, 1999 and 1998                  2

           Unaudited Consolidated Statements of Cash Flows,
             three months ended December 31, 1999 and 1998                  3

           Notes to Unaudited Consolidated Financial Statements            4-7

  Item 2.  Management's Discussion and Analysis
             of Financial Condition and Results of Operations              8-10


Part II.  Other Information

  Item 1.  Legal Proceedings                                                11

  Item 2.  Changes in Securities and Use of Proceeds                        11

  Item 3.  Defaults Upon Senior Securities                                  11

  Item 4.  Submission of Matters to a Vote of Security Holders              11

  Item 5.  Other Information                                                11

  Item 6.  Exhibits and Reports on Form 8-K                                 11

           Signature Page                                                   12








<PAGE>


                                     Part I

Item 1.
                             Williams Controls Inc.
                           Consolidated Balance Sheets
         (Dollars in thousands, except share and per share information)
<TABLE>
<CAPTION>
<S>                                                                   <C>                     <C>


                                                                          December 31,          September 30,
                                                                              1999                  1999
                                                                          (unaudited)
                                                                       -------------------    ---------------------
                           ASSETS
Current Assets:
   Cash and cash equivalents                                                   $   827                  $ 2,323
   Trade and other accounts receivable, less allowance of $453 and
     $484 at December 31, 1999 and September 30, 1999, respectively             10,353                   11,187
   Inventories                                                                  10,756                    9,828
   Deferred income taxes and other                                               4,438                    4,325
   Net assets held for disposition                                                 237                      360
                                                                       -------------------    ---------------------
     Total current assets                                                       26,611                   28,023

   Property plant and equipment, net                                            20,472                   20,775
   Investment in and note receivable from affiliate                              5,932                    6,152
   Net assets held for disposition                                                 461                      500
   Goodwill and intangible assets, net                                           5,619                    5,764
   Deferred income taxes                                                         3,093                    3,025
   Other assets                                                                    229                      265
                                                                       ===================    =====================
     Total assets                                                              $62,417                  $64,504
                                                                       ===================    =====================

            LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
   Accounts payable                                                            $10,033                  $ 9,223
   Accrued expenses                                                              3,452                    3,449
   Current portion of long-term debt and capital leases                          5,350                    5,193
   Estimated loss on disposal                                                      484                    1,000
                                                                       -------------------     --------------------
      Total current liabilities                                                 19,319                   18,865

Long-term debt and capital lease obligations                                    22,281                   24,743
Other liabilities                                                                2,887                    2,690

Commitments and contingencies

Shareholders' equity:
   Preferred stock ($.01 par value, 50,000,000 authorized;
     78,500 issued and outstanding at December 31, 1999 and
     September 30, 1999)                                                             1                        1
   Common stock ($.01 par value, 50,000,000 authorized;
      19,913,728 and 19,898,728 issued at December 31,
      1999 and  September 30, 1999, respectively)                                  199                      199
   Additional paid-in capital                                                   21,611                   21,574
   Accumulated deficit                                                         (3,004)                  (2,691)
   Treasury stock (130,200 shares at December 31, 1999 and
      September 30, 1999)                                                        (377)                    (377)
   Note receivable                                                               (500)                    (500)
                                                                       -------------------     --------------------
      Total shareholders' equity                                                17,930                   18,206
                                                                       -------------------     --------------------

        Total liabilities and shareholders' equity                             $62,417                  $64,504
                                                                       ===================     ====================




                                       The  accompanying  notes are an  integral part of these balance sheets.

</TABLE>

                                       1
<PAGE>


                             Williams Controls, Inc.
                      Consolidated Statements of Operations
         (Dollars in thousands, except share and per share information)
                                   (unaudited)


                                                Three months       Three months
                                                   Ended              Ended
                                                December 31,       December 31,
                                                    1999               1998
                                               --------------     --------------

Sales                                             $15,877            $14,399
Cost of sales                                      12,131             10,015
                                               --------------     --------------
Gross margin                                        3,746              4,384

Operating expenses:
  Research and development                          1,697                648
  Selling                                             440                497
  Administration                                    1,107                915
                                               --------------     --------------
    Total operating expenses                        3,244              2,060
                                               --------------     --------------

Earnings from continuing operations                   502              2,324

Other (income) expenses:
   Interest income                                   (70)              (125)
   Interest expense                                   629                473
   Other (income) expense, net                        (8)                112
   Equity interest in loss of affiliate               220                190
                                               --------------     --------------
     Total other expenses                             771                650
                                               --------------     --------------


Earnings (loss) from continuing operations
   before income tax expense (benefit)              (269)              1,674
Income tax expense (benefit)                        (103)                643
                                               --------------     --------------

Net earnings (loss) from continuing operations      (166)              1,031

Dividends on preferred stock                          147                150
                                               --------------     --------------
Net earnings (loss) allocable to common
  shareholders                                    $ (313)            $   881
                                               ==============     ==============


Net earnings (loss) per common share - basic      $(0.02)            $  0.05
                                               ==============     ==============
Weighted average shares used in per share
  calculation basic                              19,776,843         18,248,760
                                               ==============     ==============

Net earnings (loss) per common share - diluted    $(0.02)            $ 0.05
                                               ==============     ==============
Weighted  average  shares  used in per  share
calculation - diluted                            19,776,843         21,312,041
                                               ==============     ==============





        The accompanying notes are an integral part of these statements.

                                       2
<PAGE>


                             Williams Controls, Inc.
                      Consolidated Statements of Cash Flows
                             (Dollars in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                          <C>                   <C>

                                                                                 Three months           Three months
                                                                                    Ended                  Ended
                                                                              December 31, 1999      December 31, 1998
                                                                              -------------------    -------------------
Cash flows from operating activities:
  Net earnings (loss)                                                                     $(166)                 $1,031
Adjustments  to reconcile net earnings to net cash from continuing
operations:
  Depreciation and amortization                                                              721                    384
  Equity interest in loss of affiliate                                                       220                    190
Changes in working capital of continuing operations:
  Receivables                                                                                834                  1,244
  Inventories                                                                              (928)                    464
  Accounts payable and accrued expenses                                                      813                (1,855)
  Other                                                                                      153                   (78)
                                                                              -------------------    -------------------
Net cash provided by operating activities of continuing operations                         1,647                  1,380

Cash flows from investing activities:
  Payments for property, plant and equipment                                               (199)                  (695)

Cash flows from financing activities:
  Repayments of long-term debt and capital lease obligations                             (2,480)                (3,093)
  Borrowing under term notes                                                                   -                  2,500
  Preferred dividends                                                                      (147)                  (150)
  Proceeds from issuance of common stock                                                      37                     75
                                                                              -------------------    -------------------
Net cash used in financing activities of continuing operations                           (2,590)                  (668)

Net cash used in discontinued operations                                                   (354)                   (47)

                                                                              -------------------    -------------------
Net decrease in cash and cash equivalents                                                (1,496)                   (30)

Cash and cash equivalents at beginning of period                                           2,323                  1,281
                                                                              ===================    ===================
Cash and cash equivalents at end of period                                                $  827                 $1,251
                                                                              ===================    ===================

Supplemental disclosure of cash flow information:
  Interest paid                                                                           $  648                 $  486
                                                                              ===================    ===================
  Income taxes paid                                                                       $   15                 $  347
                                                                              ===================    ===================
  Capital leases for equipment                                                            $  175                 $    -
                                                                              ===================    ===================


                          The  accompanying  notes are an integral part of these statements.
</TABLE>
                                      3
<PAGE>

                             Williams Controls, Inc.
              Notes to Unaudited Consolidated Financial Statements
                  Three Months ended December 31, 1999 and 1998
           (Dollars in thousands, except share and per share amounts)


       Cautionary  Statement:  This report contains  forward-looking  statements
       within the meaning of the  Private  Securities  Litigation  Reform Act of
       1995.  Forward-looking  statements  include,  without  limitation,  those
       statements  relating  to  development  of  new  products,  the  financial
       condition of the  Company,  the ability to increase  distribution  of the
       Company's  products,  integration  of  businesses  the Company  acquires,
       disposition  of any  current  business  of  the  Company,  including  its
       Agricultural  Equipment  segment.  These  forward-looking  statements are
       subject to the  business and  economic  risks faced by the  Company.  The
       Company's actual results could differ  materially from those  anticipated
       in these forward-looking  statements as a result of the factors described
       above and other factors described elsewhere in this report.

1.     Organization

       Williams   Controls,   Inc.,  including  its  wholly-owned  subsidiaries,
       Williams Controls Industries, Inc.  ("Williams");  Aptek  Williams,  Inc.
       ("Aptek");  Premier  Plastic   Technologies,   Inc.  ("PPT");   ProActive
       Acquisition   Corporation   ("ProActive");   Williams  Automotive,  Inc.;
       GeoFocus,  Inc.  ("GeoFocus");   NESC Williams,  Inc. ("NESC");  Williams
       Technologies, Inc. ("Technologies");  Williams World Trade, Inc. ("WWT");
       Kenco/Williams, Inc. ("Kenco"); Techwood Williams, Inc. ("TWI");  Agrotec
       Williams,   Inc.   ("Agrotec")  and  its  80%  owned  subsidiaries Hardee
       Williams, Inc. ("Hardee") and Waccamaw Wheel Williams, Inc.  ("Waccamaw")
       is hereinafter referred to as the "Company" or "Registrant."

2.     Interim Consolidated Financial Statements

       The  unaudited  interim  consolidated   financial  statements  have  been
       prepared by the Company  and, in the opinion of  management,  reflect all
       material  adjustments  which are necessary to a fair statement of results
       for  the  interim  periods   presented.   The  interim  results  are  not
       necessarily  indicative  of the results  expected  for the entire  fiscal
       year. Certain information and footnote disclosure made in the last annual
       report on Form  10-K  have been  condensed  or  omitted  for the  interim
       consolidated  statements.  Certain  costs are estimated for the full year
       and allocated to interim  periods based on activity  associated  with the
       interim  period.   Accordingly,   such  costs  are  subject  to  year-end
       adjustment.   It  is  the  Company's   opinion  that,  when  the  interim
       consolidated  statements are read in  conjunction  with the September 30,
       1999 annual report on Form 10-K, the disclosures are adequate to make the
       information presented not misleading.  The interim consolidated financial
       statements include the accounts of the Company and its subsidiaries.  All
       significant intercompany accounts and transactions have been eliminated.

3.     Comprehensive Income (Loss)

       In June 1997, the Financial  Accounting  Standards  Board ("FASB") issued
       Statement of Financial  Accounting  Standards  ("SFAS")  130,  "Reporting
       Comprehensive  Income",  which requires  companies to report a measure of
       all changes in equity except those  resulting from  investments by owners
       and distributions to owners.  Total  comprehensive  income (loss) for the
       three  months  ended  December  31,  1999 and 1998 was $(166) and $1,031,
       respectively, and consisted solely of net earnings (loss). As of December
       31, 1999, accumulated other comprehensive loss was $(3,004) and consisted
       of accumulated deficit.

4.     Earnings (loss) per Share

       Basic  earnings per share ("EPS") and diluted EPS are computed  using the
       methods  prescribed  by Statement of Financial  Accounting  Standards No.
       128,   "Earnings  Per  Share".   Basic  EPS  is   calculated   using  the
       weighted-average  number of common shares  outstanding for the period and
       diluted  EPS is  computed  using  the  weighted-average  number of common
       shares and dilutive common equivalent shares outstanding.


                                       4
<PAGE>

Following  is a  reconciliation  of basic EPS and  diluted  EPS from  continuing
operations:
<TABLE>
<CAPTION>
<S>                                      <C>       <C>          <C>          <C>      <C>         <C>

                                               Three Months Ended                  Three Months Ended
                                                December 31, 1999                  December 31, 1998
                                         --------------------------------    -------------------------------
                                                                  Per                                Per
                                                                 Share                              Share
                                           Loss      Shares      Amount       Income     Shares     Amount
       Income (loss) from continuing
         Operations                        $(166)                              $1,031
       Less-Preferred stock dividends       (147)                               (150)
                                         ---------                           ---------
       Basic EPS-
         Income (loss) from  continuing
         Operations available to common
         Shareholders                      $(313)                $(0.02)         $881  18,248,760     $0.05
                                                   19,776,843
                                                                =========                          =========
       Effect of dilutive securities -
         Stock options and warrants             -            -                      -     154,190
         Convertible preferred stock            -            -                    150   2,909,091
       Diluted EPS -                     --------- ------------              --------- ----------
         Income (loss) from continuing
         Operations available to common
         Shareholders                      $(313)   19,776,843   $(0.02)       $1,031  21,312,041     $0.05
                                         ========= ============ =========    ========= =========== =========
</TABLE>

       At  December  31, 1999 and 1998,  the  Company  had options and  warrants
       covering 3,558,797 and 1,050,661 shares,  respectively  of  the Company's
       common stock outstanding  that were  not  considered  in  the  respective
       dilutive  EPS  calculations  since they would have been antidilutive.  In
       1999, conversion of the preferred shares would have been antidilutive and
       therefore  was  not considered in the computation of diluted earnings per
       share.


5.     Inventories

       Inventories consisted of the following:

                                       December 31,            September 30,
                                           1999                     1999
                                   -------------------     ---------------------
       Raw material                     $ 7,741                    $6,867
       Work in process                      875                       697
       Finished goods                     2,140                     2,264
                                   ===================     =====================
                                        $10,756                    $9,828
                                   ===================     =====================


       Finished  goods  include  component  parts and finished product ready for
       shipment.

6.     Debt

       In February  2000,  the Company  amended its credit  facility with a bank
       (the "Bank"). Terms of the amendment extend the due date of Term Loan III
       from February 1, 2000 to April 1, 2000,  advance the Company $1,000 under
       a new term loan  ("Term  Loan  IV")  which is due April 1, 2000 and bears
       interest  at the Bank's  prime rate plus 1.25%,  advance  $800 under Term
       Loan I (subject  to  adjustment  for a  subsequent  appraisal  of certain
       equipment),  and advance certain lesser amounts as a result of the change
       in eligibility of certain receivables. Should a private placement of debt
       or equity be successful  before April 1, 2000, $1,000 of the first $3,000
       of net  proceeds  received  by the  Company are to be paid to the Bank in
       payment of Term Loan IV. 75% of the net proceeds  received by the Company
       in excess of $3,000  are to be paid to the Bank in  payment  of Term Loan
       III, until retired.




                                       5
<PAGE>

       In addition,  under the  amendment to the credit  facility with the Bank,
       certain  financial  covenants  were revised.  The amendment  requires the
       Company to maintain  certain  tangible net worth,  which  requirement was
       $10,400 at December 31, 1999;  achieve  certain  consolidated  net income
       (loss) from continuing  operations,  which requirement was $(500) for the
       three  months  ended  December  31,  1999;  and  maintain a debt  service
       coverage  ratio  (as  defined  in  the  agreement).  The  Company  was in
       compliance  with all of its  financial  covenants as of and for the three
       months ended December 31, 1999. In addition,  the amendment to the credit
       facility  provides for additional  capital leases during each fiscal year
       not to exceed $2,500. The Company will pay the Bank $50 for the amendment
       to the credit facility.


7.     Sale Leaseback and Financing

       In  April  1997  the  Company  sold the  Portland,  Oregon  manufacturing
       facility in a sale/leaseback  transaction for $4,600. The transaction was
       accounted for as a financing and the  capitalized  lease  obligations  of
       $4,600 were recorded as long-term  liabilities.  In April 1998, under the
       terms of the agreement,  a mortgage note was provided to the purchaser in
       the  amount  of  $3,200,  which  was  reported  as a note  receivable  at
       September 30, 1998. In December  1998, a repurchase  option was exercised
       on the  property  for  $4,700  consisting  of cash of $1,500 and the note
       receivable of $3,200. Accordingly,  the note receivable of $3,200 and the
       capital lease  obligation of $4,600 have been eliminated from the balance
       sheet at  September  30,  1999.  The costs  associated  with the building
       repurchase are reported in other  expenses  during the three months ended
       December 31, 1998. In December,  1998 the Company  borrowed $2,500 from a
       bank under amended term loans to finance the  repurchase of the Portland,
       Oregon   manufacturing   facility  and  for  working  capital   purposes.
       Approximately  $1,222 of the  additional  financing was borrowed under an
       amendment to our existing Term Loan I, the increased  principal amount of
       which is payable in equal monthly  installments of $60 with the remaining
       balance of the entire  Term Loan I of $3,150 due at  maturity on July 11,
       2001. Approximately $1,278 of the additional financing was provided under
       an amended Term Loan II which is payable in 18 equal installments of $71,
       plus variable interest (8.5% at December 31, 1999).

 8.    Acquisition

       In July,  1999, the Company  purchased the ProActive  Pedals  division of
       Active Tools  Manufacturing  Co., Inc.  ProActive Pedal is a designer and
       developer of patented  adjustable  foot pedal  systems and modular  pedal
       systems.  The purchase price included $5,750 in cash, plus the assumption
       of approximately  $286 in liabilities.  In addition,  the Company entered
       into a patent  license  with the patent  holder that  required an initial
       payment of $600 and minimum annual  royalty  payments of $95 per year for
       ten years. Assets acquired include tooling designs, technology and patent
       rights on adjustable  foot pedal  systems,  as well as designs of modular
       foot pedal systems.  The acquisition was accounted for using the purchase
       method of accounting and the results of operations of ProActive have been
       included in the  consolidated  results of  operations of the Company from
       the acquisition date. The purchase price allocation  resulted in a $1,750
       charge to operations for acquired  in-process  research and  development,
       determined by  independent  appraisal,  for the year ended  September 30,
       1999. The technological feasibility of the acquired technology, which has
       no  alternative  future  use,  had  not  been  established  prior  to the
       purchase.  The  allocation of the purchase  price also resulted in $1,820
       being allocated to developed technology,  which is being amortized over a
       seven year period.  The excess of the purchase  price over the fair value
       of the assets acquired and liabilities  assumed of $2,162 was recorded as
       goodwill and is being  amortized on a straight  line basis over a 15 year
       period.

       The following  unaudited  proforma  results of  operations  for the three
       months ended  December  31, 1998 include the results of ProActive  Pedals
       assuming such acquisition occurred as of October 1, 1998 and excludes the
       acquired in-process research and development charge.

                                                     1998
                                                    -------
               Sales                                $14,502
               Operating income                       1,523
               Earnings from continuing operations      532
               Net earnings per share - basic          0.02
               Net earnings per share - diluted        0.02

       The  purchase  was  financed  through the private  placement of 1,331,149
       shares of the Company's  common stock with net proceeds of  approximately
       $3,379.  In addition,  the Company  borrowed $2,500 from its bank under a
       new term loan facility ("Term Loan III").


9.     Reclassifications

       Certain amounts previously reported in the financial statements as of and
       for the three months ended  December 31, 1998 have been  reclassified  to
       conform to current fiscal year presentation.


                                       6
<PAGE>

10.    Segment Information
<TABLE>
<CAPTION>
<S>                                                              <C>                 <C>
                                                                  Three months       Three months
                                                                     Ended               Ended
                                                                  December 31,       December 31,
                                                                      1999               1998
                                                                 ---------------     --------------

Sales by classes of similar products from continuing operations
Vehicle components                                                      $15,024            $13,771
Electrical components and GPS                                               853                628
                                                                 ===============     ==============
                                                                        $15,877            $14,399
                                                                 ===============     ==============

Earnings (loss) from continuing operations
Vehicle components                                                       $1,649             $3,142
Electrical components and GPS                                           (1,147)              (818)
                                                                 ===============     ==============
                                                                           $502             $2,324
                                                                 ===============     ==============

Identifiable assets
Vehicle components                                                      $52,634            $46,771
Electrical components and GPS                                             9,085              8,175
                                                                 ---------------     --------------
Total assets - continuing operations                                     61,719             54,946
                                                                 ---------------     --------------
Agricultural equipment - discontinued operations                            698              8,681
                                                                 ---------------     --------------
Total assets                                                            $62,417            $63,627
                                                                 ===============     ==============

Capital expenditures
Vehicle components                                                         $195               $655
Electrical components and GPS                                                 4                 40
                                                                 ===============     ==============
Total capital expenditures                                                 $199               $695
                                                                 ===============     ==============


Depreciation and amortization
Vehicle components                                                         $618               $300
Electrical components and GPS                                               103                 84
                                                                 ===============     ==============
Total depreciation and amortization                                        $721               $384
                                                                 ===============     ==============
</TABLE>


                                       7
<PAGE>

Item 2.
                             Williams Controls, Inc.
                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                (Dollars in thousands, except per share amounts)

Financial Position and Capital Resources
Financial Condition, Liquidity and Capital Resources

The  Company's   principal   sources  of  liquidity  are  funds  generated  from
operations,  borrowings  under our credit  facilities,  and  capital  leases for
equipment purchases from various leasing companies. Primarily as a result of the
acquisition  of ProActive  Pedals in July,  1999,  the Company has a bridge loan
outstanding at December 31, 1999. In addition, partly as a result of significant
capital  expenditures  and increased  inventories  in the last quarter of fiscal
1999,   the  Company  has  extended   payments  due  to  several  major  vendors
significantly past the scheduled payment date.

In February  2000,  the Company  amended  its credit  facility  with a bank (the
"Bank").  Terms  of the  amendment  extend  the due  date of Term  Loan III from
February 1, 2000 to April 1, 2000,  advance the Company  $1,000 under a new term
loan (Term Loan IV) which is due April 1, 2000 and bears  interest at the Bank's
prime rate plus 1.25%, advance $800 under Term Loan I (subject to adjustment for
a subsequent appraisal of certain equipment), and advance certain lesser amounts
as a result of the change in eligibility of certain receivables.

In addition,  the Company has begun the process of raising additional capital in
a  private  placement  of  convertible,  subordinated  debt.  Should  a  private
placement of debt or equity be  successful  before April 1, 2000,  $1,000 of the
first $3,000 of net proceeds  received by the Company are to be paid to the Bank
in payment of Term Loan IV. 75% of the net  proceeds  received by the Company in
excess of $3,000 are to be paid to the Bank in  payment of Term Loan III,  until
retired. Should the Company not be successful in raising additional capital, the
Company  would  request an  extension of Term Loan III and Term Loan IV from the
Bank.

The Company  anticipates that cash generated from  operations,  bank borrowings,
and leases will be sufficient to satisfy the Company's other working capital and
capital  expenditure  requirements  for current  operations  for the next twelve
months.  At December 31, 1999, the Company's working capital was $7,292 compared
to $9,158 at September  30, 1999 and the current ratio was 1.38 compared to 1.49
at September 30, 1999.  The primary  reason for the decrease is the reduction in
cash of $1.5 million from September 30, 1999 to December 31, 1999 which was used
to pay principal and interest payments to the Bank.

Cash flows from  continuing  operations  was $1,647 for the three  months  ended
December 31, 1999  compared to $1,380 for the first three months of fiscal 1999.
In the three months ended December 31, 1999,  decreased  earnings of $1,197 were
more than offset by increased  depreciation and amortization of $337 and changes
in working capital totaling $1,097.

Net cash  used in  investing  activities  was $199 for the  three  months  ended
December 31, 1999 compared to $695 for the fiscal 1999 period. All payments were
for property, plant and equipment.

In December,  1998 the Company  borrowed $2,500 from the Bank under amended term
loans to finance the repurchase of the Portland,  Oregon manufacturing  facility
and for working capital purposes.

The Company's  discontinued  operations  used cash of $354 and $47 for the three
months ended December 31, 1999 and 1998, respectively.

Market Risk - The Company has not entered into derivative financial instruments.
The  Company may be exposed to future  interest  rate  changes on its debt.  The
Company does not believe that a hypothetical  10 percent change in end of period
interest rates would have a material effect on the Company's cash flow.

Recent FASB Pronouncements - In June 1999 the FASB issued Statement of Financial
Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging
Activities"  ("SFAS 137").  SFAS 137 is an amendment to SFAS 133 "Accounting for
Derivative  Instruments and Hedging Activities." SFAS 137 establishes accounting
and reporting  standards for all derivative  instruments.  SFAS 137 is effective
for fiscal years  beginning  after June 15, 2000.  The Company does not have any
derivative  instruments and  accordingly,  the adoption of SFAS 137 will have no
impact on the Company's financial position or results of operations.

Year 2000  Conversion  - At December  31, 1999,  100% of the  Company's  mission
critical  systems that might have had a material Year 2000  liability  were Year
2000  compliant.  Total amount spent by the Company in preparation  for the Year
2000  conversion  was  approximately  $310.  The Company did not  experience any
material  year 2000  failures.  While not all Year 2000 issues were  necessarily
expected to arise in January  2000,  we believe our efforts to address Year 2000
issues have been  successful  in avoiding  any  material  adverse  effect on our
financial  position or results of  operations.  The Company  does not expect any
material adverse effect on our financial positon and results of operations,  but
will continue to monitor for Year 2000 issues.



                                       8
<PAGE>

                             Williams Controls, Inc.
          Management's Discussion and Analysis of Results of Operations
                (Dollars in thousands, except per share amounts)

Results of Operations
Three months ended December 31, 1999 compared to the three months ended December
31, 1998


Sales

Sales from continuing  operations  increased $1,478, or 10.3%, to $15,877 in the
first  quarter of fiscal 2000 from  $14,399 in the first  quarter of fiscal 1999
primarily due to higher unit sales volumes in the Company's  Vehicle  Components
segment.

Sales  from  continuing  operations  in the  Vehicle  Components  business  unit
increased  $1,253 or 9.1%,  to $15,024 in the first  quarter of fiscal 2000 over
levels  achieved in the first quarter of fiscal 1999 due to electronic  throttle
control ("ETC") unit sales,  approximately half of which was from new automotive
and medium truck  contracts.  Sales from continuing  operations in the Company's
Electrical Components and GPS business units increased $225, or 35.8%, primarily
due to  revenues  in the  first  quarter  of  fiscal  2000  as a  result  of the
completion of the Chicago Metra contract at the GPS subsidiary.

Gross margin

Gross  margin  from  continuing  operations  was $3,746 or 23.6% of sales in the
first  quarter of 2000,  compared to $4,384 or 30.5% of sales in the  comparable
fiscal 1999 period.  Gross margin  decreased $638 or 14.6%, in the first quarter
of fiscal 2000 as a result of reduced  gross  margins at the Vehicle  Components
business unit of $771. The primary  reasons for the decrease in gross margins at
the Vehicle Components  business unit include increased  management  information
system  expenses of  approximately  $229 for continued  support of an enterprise
wide  resource  planning  system,  wide area  network and year 2000  compliance,
increased  depreciation  and  amortization  expense  as a result of  significant
capital  expenditures  made in  fiscal  1999 and the  increase  in  amortization
expense  resulting from the acquisition of ProActive  Pedals,  and a decrease in
the gross margin realized at the Company's plastic injection molding and tooling
subsidiary of $496.

The Company's plastic injection  molding and tooling  subsidiary,  the operating
results of which are included in the Vehicle Components  business unit, reported
an increased  loss from  operations of $619 in the first quarter ended  December
31, 1999 compared to the prior fiscal  quarter as losses  continue while gearing
up for future  increased  sales as a result of new orders.  The Company  expects
operating losses to continue, at least for the next quarter. Sales, gross margin
(loss) and operating  income (loss) for the quarter ended December 31, 1999 were
$1,230,  ($432) and ($808),  respectively  compared to $1,436, $63 and ($189) in
the prior fiscal period.

Operating expenses

Operating  expenses for continuing  operations  were $3,244 for the three months
ended  December  31,  1999  compared  to $2,060 for the  comparable  fiscal 1999
period, or an increase of $1,184, or 57.5% as a result of increased research and
development  expenses.  Operating  expenses  as a  percent  of  net  sales  from
continuing  operations  increased  to 20.4% in the first  quarter of fiscal 2000
compared to 14.3% in the comparable 1999 quarter.

Research and development expenses for continuing operations increased $1,049, to
$1,697  during  the  first  quarter  of  fiscal  2000  compared  to  $648 in the
comparable fiscal 1999 period. As a percent of sales from continuing operations,
research and  development  expenses  increased from 4.5% to 10.7%.  Research and
development  expenses  were  increased  to design ETC products  compatible  with
gasoline powered vehicles, develop commercial applications for inertia, tilt and
position sensor products,  and develop adjustable foot pedal and ETC systems for
passenger  vehicles.  The Company is in the early stages of development of these
programs  and  expects  to  increase   research  and  development   spending  by
approximately $4,200 in fiscal 2000. The majority of the additional expense will
be used to develop passenger vehicle electronic throttle controls and adjustable
foot pedals.




                                       9
<PAGE>

Interest and Other Expenses

Interest expense from continuing operations increased $156, or 33.0%, to $629 in
the first  quarter of fiscal 2000 from $473 in the first  quarter of fiscal 1999
primarily  because  of the  increase  in  capital  leases as a percent  of total
outstanding debt, which is at a higher average interest rate than bank debt, and
the decrease in allocated  interest expense included in discontinued  operations
which  was $26 and $86 for the  quarters  ended  December  31,  1999  and  1998.
respectively.


Discontinued operations

The  Company has  received  two offers to purchase  the  Agricultural  Equipment
Segment.  Both offers are subject to  additional  due  diligence,  execution  of
definitive  agreements,  and requisite approvals.  The Company has accepted both
offers  while  not  granting  exclusivity  to  either  buyer.  Both  offers  are
equivalent in value,  and neither  offer would result in an additional  loss for
the disposal of this discontinued business segment.

Net sales from the Agriculture Equipment business unit declined $327 or 18.4% to
$1,449  in the first  quarter  of fiscal  2000  compared  to $1,776 in the first
quarter  of  fiscal  1999.  The  decline  in sales was due to lower  unit  sales
attributable  primarily to a weak farm economy. The loss from operations for the
discontinued Agriculture Equipment business unit decreased $161 to $468 due to a
reduction in selling and administration expenses totaling $329.


Net earnings available to common shareholders

Net earnings (loss)  allocable to common  shareholders was $(313) in the quarter
ended  December 31, 1999 compared to $881 in the  comparative  prior year period
due to decreased gross margins as a percent of sales and increased  research and
development expense and interest expense.

The effective income tax rate was 38.4% for the quarters ended December 31, 1999
and 1998.




                                       10
<PAGE>



                                     Part II

Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities and Use of Proceeds

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         None

Item 5.  Other Information

         None


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits
              10.1  -  Eighth Amendment to Credit Agreement
              27    -  Financial Data Schedule

(b)      Reports on Form 8-K
              None


                                       11
<PAGE>


                             Williams Controls, Inc.

                                    Signature


Pursuant  to the  requirements  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.




                             WILLIAMS CONTROLS, INC.





                                                    /s/  Gerard A. Herlihy
                                                    ----------------------------
                                                    Gerard A. Herlihy,
                                                    Chief Financial Officer




                                                    /s/  Kim L. Childs
                                                    ----------------------------
                                                    Kim L. Childs,
                                                    Corporate Controller and
                                                    Principal Accounting Officer








Date:  February 14, 2000








                                       12
<PAGE>






                             Williams Controls, Inc.

                                    Signature


Pursuant  to the  requirements  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.



                             WILLIAMS CONTROLS, INC.






                                                   -----------------------------
                                                    Gerard A. Herlihy,
                                                    Chief Financial Officer





                                                    ----------------------------
                                                    Kim L. Childs,
                                                    Corporate Controller and
                                                    Principal Accounting Officer






Date: February 14, 2000





                                       12