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, 2001

                                       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, 2002: 19,928,522


<PAGE>


                             Williams Controls, Inc.

                                      Index


                                                                           Page
                                                                          Number

Part I.  Financial Information

  Item 1.  Financial Statements

           Consolidated Balance Sheets, December 31, 2001
             (unaudited) and September 30, 2001                            1

           Unaudited Consolidated Statements of Operations,
             three months ended December 31, 2001 and 2000
             (as restated)                                                  2

           Unaudited Consolidated Statements of Cash Flows,
             three months ended December 31, 2001 and 2000
             (as restated)                                                  3

           Notes to Unaudited Consolidated Financial Statements            4-7

  Item 2.  Management's Discussion and Analysis
             of Financial Condition and Results of Operations              8-11


Part II.  Other Information

  Item 1.  Legal Proceedings                                                12

  Item 2.  Changes in Securities and Use of Proceeds                        12

  Item 3.  Defaults Upon Senior Securities                                  12

  Item 4.  Submission of Matters to a Vote of Security Holders              12

  Item 5.  Other Information                                                12

  Item 6.  Exhibits and Reports on Form 8-K                                 12

           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,
                                                                              2001                 September 30,
                                                                          (unaudited)                  2001
                                                                       -------------------    ---------------------
                           ASSETS
Current Assets:
   Cash and cash equivalents                                                 $  1,069                 $       -
   Trade and other accounts receivable, less allowance of $397 and
     $379 at December 31, 2001 and September 30, 2001, respectively             6,520                     8,231
   Inventories, net                                                             5,011                     4,725
   Prepaid and other current assets                                             1,263                     1,222
                                                                       -------------------    ---------------------
     Total current assets                                                      13,863                    14,178

   Property plant and equipment, net                                           11,273                    11,729
   Investment in and note receivable from affiliate                             3,065                     3,065
   Goodwill and intangible assets, net                                             36                        36
   Other assets                                                                   459                       331
                                                                       -------------------    ---------------------
     Total assets                                                            $ 28,696                 $  29,339
                                                                       ===================    =====================

            LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Accounts payable                                                          $  8,922                 $   9,434
   Accrued expenses                                                             9,419                     9,048
   Current portion of long-term debt and capital leases                        13,372                    13,146
   Convertible subordinated debt, net                                           2,092                     2,082
                                                                       -------------------     --------------------
      Total current liabilities                                                33,805                    33,710

Long-term debt and capital lease obligations                                      155                       205
Other liabilities, Primarily employee benefit obligations                       6,350                     6,132

Commitments and contingencies

Shareholders' equity (deficit):
   Preferred stock ($.01 par value, 50,000,000 authorized;
      78,200 issued and outstanding at December 31, 2001
      and 78,400 at September 30, 2001)                                             1                         1
   Common stock ($.01 par value, 50,000,000 authorized;
      19,928,522 issued at December 31, 2001 and 19,921,114 at
      September 30, 2001                                                          199                       199
   Additional paid-in capital                                                  23,069                    23,069
   Accumulated deficit                                                        (31,627)                  (30,721)
   Other comprehensive loss - Pension liability adjustment                     (2,379)                   (2,379)
   Treasury stock (130,200 shares at December 31, 2001
      and September 30, 2001)                                                    (377)                     (377)
   Note receivable                                                               (500)                     (500)
                                                                       -------------------     --------------------
      Total shareholders' equity (deficit)                                    (11,614)                  (10,708)
                                                                       -------------------     --------------------

        Total liabilities and shareholders' equity (deficit)                 $ 28,696                 $  29,339
                                                                       ===================     ====================




        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,
                                                    2001               2000
                                               --------------     --------------

Net sales                                         $11,419            $14,979
Cost of sales                                       8,728             12,624
                                               --------------     --------------
Gross margin                                        2,691              2,355

Operating expenses:
  Research and development                            964                945
  Selling                                             242                428
  Administration                                    1,656              2,415
  Loss on impairment of assets - PPT                    -              1,996
                                               --------------     --------------
    Total operating expenses                        2,862              5,784
                                               --------------     --------------

Loss from operations                                 (171)            (3,429)


Other (income) expenses:
   Interest expense                                   940              1,073
   Other (income) expense, net                        (29)                (8)
                                               --------------     --------------
     Total other expenses                             911              1,065
                                               --------------     --------------


Loss from continuing operations before
   income tax                                      (1,082)            (4,494)
Income tax                                              -                  -
                                               --------------     --------------

Net loss from continuing operations                (1,082)            (4,494)

Discontinued operations:
   Gain from exchange of building for debt of
   the previously discontinued agricultural
   equipment segment                                  417                  -
                                               --------------     --------------

Net loss                                             (665)            (4,494)

Dividends on preferred stock                         (241)              (147)
                                               --------------     --------------
Net loss allocable to common
  shareholders                                    $  (906)           $(4,641)
                                               ==============     ==============


Net loss per common share from continuing
   operations - basic                             $ (0.07)           $ (0.23)
Net income per common share from discontinued
   operations - basic                                0.02                  -
                                              --------------     --------------
Net loss per common share - basic                 $ (0.05)           $ (0.23)
                                              ==============     ==============
Weighted average shares used in per share
  calculation - basic                            19,926,022         19,790,914
                                               ==============     ==============

Net loss per common share from continuing
   operations - diluted                           $ (0.07)           $ (0.23)
Net income per common share from discontinued
   operations - diluted                              0.02                  -
                                               --------------     --------------
Net loss per common share - diluted               $ (0.05)           $ (0.23)
                                               ==============     ==============
Weighted  average  shares  used in per  share
   calculation - diluted                         19,926,022         19,790,914
                                               ==============     ==============





        The accompanying notes are an integral part of these statements.

                                       2
<PAGE>


                             Williams Controls, Inc.
                      Consolidated Statements of Cash Flows
                             (Dollars in thousands)
                                   (Unaudited)


                                              Three months        Three months
                                                 Ended               Ended
                                              December 31,        December 31,
                                                  2001                2000
                                             --------------      ---------------
Cash flows from operating activities:
  Net loss                                     $   (665)            $ (4,494)
Adjustments  to reconcile net loss
  to net cash provided by operations:
      Depreciation and amortization               1,067                  967
      Gain from discontinued operations            (417)                   -
      Loss from impairment of assets                  -                1,996
Changes in working capital:
      Receivables, net                            1,711                  626
      Inventories                                  (286)                 901
      Accounts payable and accrued expenses        (382)                 564
      Other                                        (230)                 355
                                             --------------      ---------------
Net cash provided by operating activities           798                  915


Cash flows from investing activities:
  Payments for property, plant and equipment       (118)                (187)
                                             --------------      ---------------
Net cash used in investing activities              (118)                (187)


Cash flows from financing activities:
  Net borrowings (payments) of debt and lease
    obligations                                     389                 (611)
  Preferred dividends                                 -                 (147)
                                             --------------      ---------------
Net cash provided by (used in) financing
  activities                                        389                 (758)

Net increase (decrease) in cash and cash
  equivalents                                     1,069                  (30)

Cash and cash equivalents at beginning of
  period                                              -                   30
                                             --------------      ---------------
Cash and cash equivalents at end of period     $  1,069             $      -
                                             --------------      ---------------
                                             --------------      ---------------


Supplemental disclosure of cash flow
  information:
      Interest paid                            $    182             $    545
                                             --------------      ---------------
      Income taxes paid (refund)               $      -             $   (158)
                                             --------------      ---------------
Supplemental disclosure of non-cash
  investing and financing activities:
      Dividends accrued not paid               $    241             $      -
                                             --------------      ---------------




        The accompanying notes are an integral part of these statements.

                                      3
<PAGE>

                             Williams Controls, Inc.
              Notes to Unaudited Consolidated Financial Statements
                  Three Months ended December 31, 2001 and 2000
           (Dollars in thousands, except share and per share amounts)


     Cautionary  Statement:  This  report,  including  these Notes to  Unaudited
     Consolidated  Financial  Statements,  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.  These  forward-looking  statements are subject to
     the business and economic risks faced by the Company including, its ability
     to renegotiate its outstanding debt commitments and its ability to conclude
     a proposed  equity  offering,  the  ability of the  Company to  generate or
     obtain sufficient working capital to continue its operations. 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"); 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 disclosures 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, 2001 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.   Going Concern Matters

     The accompanying  consolidated financial statements have been prepared on a
     going concern basis,  which  contemplates the realization of assets and the
     satisfaction  of liabilities in the normal course of business.  At December
     31, 2001, essentially all of the Company's $8,922 of trade accounts payable
     was significantly past due, the working capital deficit was ($19,942),  and
     the Company stockholders' equity was a deficit of ($11,614).  Additionally,
     in February 2001 the Company raised $4,576, net of expenses, from a private
     placement of debt in the form of $4,950 of secured subordinated debentures,
     which are due March 1, 2002,  bearing  interest at 12%.  The  interest  was
     deferred until the maturity of the underlying  notes.  The Company does not
     anticipate it will be able to make the principal and interest payments when
     due on March 1, 2002. The Company also ceased making  payments of preferred
     stock dividends in the second quarter of fiscal 2001. Also, as described in
     Note 7 of Notes to the Unaudited  Consolidated  Financial  Statements,  the
     Company was not in compliance  with the  covenants of its credit  agreement
     with its primary bank at December 31, 2001. The credit agreement matured on
     July 11, 2001, and the Company has obtained extensions on this debt through
     June 30, 2002. As a result,  the Company has  classified the $7,028 owed to
     its primary bank as a current liability at December 31, 2001.

     To improve liquidity,  the Company has entered into a letter of intent with
     American Industrial  Partners (AIP) whereby AIP would invest  approximately
     $10,000, less fees and expenses,  into the Company pursuant to a new Series
     B Convertible  Preferred Stock  offering.  See Note 8 of Notes to Unaudited
     Consolidated  Financial  Statements.  Completion of the proposed  financing
     transaction  is  subject  to a number  of  conditions,  including,  without
     limitation,  customary due diligence and consent to the  transaction by the
     holders of the Company's outstanding convertible subordinated debt, secured
     subordinated  and  Series A  preferred  stock.  Following  completion  of a
     definitive  agreement  and upon  closing  of the  transaction,  AIP will be
     entitled to hold a majority of seats on the Company's Board of Directors.


     This investment by AIP is expected to improve  significantly  the Company's
     liquidity, however no assurances can be given that this transaction, or any
     other transaction,  will ultimately be completed.  Until the transaction is
     completed,  the  Company  will  continue  to  have a  significant  lack  of
     liquidity.

     The above matters  continue to raise doubt about the  Company's  ability to
     continue as a going  concern.  The financial  statements do not include any
     adjustments  relating to the  recoverability  and  classification  of asset
     carrying amounts or the amount and classification of liabilities that might
     result should the Company be unable to continue as a going concern.

                                       4
<PAGE>



4.   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  (loss) for the three months
     ended December 31, 2001 and 2000 was ($665) and ($4,494), respectively, and
     consisted  solely of net loss. As of December 31, 2001,  accumulated  other
     comprehensive  loss was  ($2,379)  and  consisted  of  accumulated  benefit
     obligations  in excess of the plan  assets  for both the  Hourly  Employees
     Pension plan and the Salaried Employees Pension Plan.

5.   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.


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, 2001                  December 31, 2000
                                         --------------------------------    -------------------------------
                                                                  Per                                Per
                                                                 Share                              Share
                                           Loss      Shares      Amount        Loss      Shares     Amount

       Net loss from continuing
         operations                      $(1,082)                             $(4,494)
       Less-Preferred stock dividends       (241)                                (147)
                                         ---------                           ---------
       Basic EPS-
         Net loss allocable to
         common shareholders             $(1,323)   19,926,022   $ (0.07)     $(4,641)  19,790,914   $(0.23)
                                                                =========                          =========
       Effect of dilutive securities -
         Stock options and warrants            -           -                        -           -
         Convertible preferred stock           -           -                        -           -
         Convertible subordinated debt         -           -                        -           -
       Diluted EPS -                     ---------  ----------                --------  ----------
         Net loss allocable to
         common shareholders             $(1,323)   19,926,022   $ (0.07)     $(4,641)  19,790,914   $(0.23)
                                         ========= ============ =========    ========= =========== =========
</TABLE>

     At  December  31, 2001 and 2000,  the  Company  had  options  and  warrants
     covering 6,188,736 and  3,690,629  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 both
     periods,  conversion of the preferred  shares and convertible  subordinated
     debt would have been  antidilutive  and therefore was not considered in the
     computation of diluted earnings per share.

6.   Inventories

     Inventories consisted of the following:

                                       December 31,            September 30,
                                           2001                     2001
                                   -------------------     ---------------------
       Raw material                      $3,288                    $3,056
       Work in process                      904                       932
       Finished goods                       819                       737
                                   ===================     =====================
                                         $5,011                    $4,725
                                   ===================     =====================


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


7.   Debt

     On June 30, 1998, the Company  restructured its credit facility with a bank
     (the "Bank") to consist of a revolving credit facility of up to $16,500,  a
     $3,100 term loan (Term Loan I) and a $2,700 real estate  loan.  In December
     1998,  the Company  borrowed  $2,500 under Term Loan II. In July 1999,  the
     Company  borrowed $2,500 under Term Loan III. In February 2000, the Company
     borrowed  $1,000 as an overadvance of its credit  agreement (Term Loan IV).
     Under the  revolver,  the Company can borrow up to $8,500  (pursuant to the
     credit  agreement,  as amended)  based upon a borrowing  base  availability
     calculated using specified  percentages of eligible accounts receivable and
     inventory.  The advance  under Term Loan II was repaid  during  2000.  Term
     Loans III and IV and a portion of Term Loan I and the Real Estate Loan were
     repaid in the Third  Quarter of 2001 from sales of the land and building at
     the Aptek subisdary and sale of the GeoFocus subsidary.  The revolver bears
     interest at the Bank's prime rate plus 2.00%, (6.75% at December 31, 2001).
     Term Loan I bears  interest at the Bank's prime rate plus 2.25%,  (7.00% at
     December 31, 2001).  The loans and the revolving credit facility matured on
     July 11, 2001 and were extended  through  December 31, 2001.  Subsequent to
     December 31, 2001, the Company obtained an extension of the credit facility
     under an  amended  forbearance  agreement  until June 30,  2002.  Principal
     payments on Term Loan I are deferred during the  forbearance  period unless
     the  Company  does not  receive  $10  million  in gross  proceeds  from the
     issuance of Preferred  Stock prior to April 1, 2002,  at which time monthly
     payments of $50, plus  interest,  will be required.  The Company  converted
     certain unpaid fees to the Bank to a $397 Bridge Loan,  bearing interest at
     the Bank's prime rate plus 3.25%.  This Bridge Loan is to be repaid with 18
     monthly payments of $22, plus interest, beginning April 2002. All loans are
     secured by substantially all of the assets of the Company.


                                       5
<PAGE>

     The loan agreement prohibits payment of dividends by the Company except for
     the Series A  Preferred  dividend,  and  requires  the  Company to maintain
     minimum  working  capital of $12,000 and  minimum  tangible  net worth,  as
     defined, of $11,500.  The loan also prohibits  additional  indebtedness and
     common  stock  repurchases  except  through the use of proceeds  from stock
     options exercised,  and restricts capital  expenditures to an amount not to
     exceed $10,500 for the two years ended September 30, 1999 and not to exceed
     $2,500  annually  thereafter.  In  addition,  the loan  limits  incremental
     operating lease obligations to $600 annually. Fees under the loan agreement
     include  an  unused  revolver  fee of .25%  and a  prepayment  penalty  fee
     declining  from  3% in  1998  to .5% in the  year  2001  and  $500  in loan
     accommodation  fees in connection with the loan extensions granted in 2001.
     The  prepayment  fee is waived if the loan is repaid with proceeds from the
     sale of assets or is refinanced  with an affiliate of the Bank. At December
     31, 2001,  the Company was not in compliance  with its debt  covenants with
     the Bank. No waivers have been obtained and the default has not been cured,
     however the company has obtained an extension of the forbearance  agreement
     until June 30, 2002. In connection  with this  extension,  the Company will
     pay a $225 fee, which could be reduced to $175 if the Bridge Loan is repaid
     before April 1, 2002. Accordingly,  all of the debt with the Bank of $7,028
     has been classified as current liabilities in the accompanying Consolidated
     Balance Sheet at December 31, 2001.


8.   Subsequent Events

     AIP Letter of Intent

     The Company  announced it has entered into a letter of intent with American
     Industrial Partners (AIP) whereby AIP would invest  approximately  $10,000,
     less  fees  and  expenses,  into the  Company  pursuant  to a new  Series B
     Convertible Preferred Stock offering.  Completion of the proposed financing
     transaction  is  subject  to a number  of  conditions,  including,  without
     limitation,  customary due diligence and consent to the  transaction by the
     holders of the Company's outstanding convertible subordinated debt, secured
     subordinated  and  Series A  preferred  stock.  Following  completion  of a
     definitive  agreement  and upon  closing  of the  transaction,  AIP will be
     entitled to hold a majority of seats on the Company's Board of Directors.

     Gain on Settlement of Debt Obligation

     Included  in  Current  portion  of  long-term  debt and  capital  leases at
     December 31, 2001 is $799 related to an obligation of the parent,  Williams
     Controls,  Inc.  arising  from  the  discontinued   Agricultural  Equipment
     segment.  This  obligation  is payable to a former owner of the assets of a
     portion of the  discontinued  Agricultural  Equipment  segment.  In January
     2002, the Company  entered into a letter of intent to transfer to the prior
     owner all remaining  machinery and inventory for a complete  release of the
     $799  obligation.  The  Company's  carrying  value  of  the  inventory  and
     machinery  and  equipment  was $0 at December  31,  2001.  The Company will
     recognize an extraordinary gain (it is estimated that the fair value of the
     assets  exchanged  is  insignificant)  of $799,  or $.04 per share,  in the
     second quarter of fiscal 2002.

9.   Dispositions

     PPT
     ---

     In July 2000,  the  Company  entered  into an  agreement  to sell PPT,  its
     plastic injection-molding  subsidiary,  subject to certain conditions. This
     transaction  was not  consummated  and was  terminated.  As a result of the
     inability  to sell PPT and  after  reviewing  PPT's  history  of  operating
     problems, workforce levels and profitability,  management of PPT terminated
     the  operations  of PPT in the second  quarter of fiscal 2001. In the first
     fiscal quarter ended December 31, 2000, the Company  recorded an impairment
     loss on PPT's  property,  plant,  and  equipment of $1,996 and  established
     additional  reserves of $100 and $598 for obsolete and excess inventory and
     estimated  uncollectible accounts receivable,  respectively.  Net sales and
     loss from  operations  of PPT were $2,200 and $(3,606) for the three months
     ended December 31, 2000.


     Geofocus
     --------

     The company sold its  GeoFocus  subsidiary  in the third fiscal  quarter of
     2001. GeoFocus was consolidated in the accompanying  consolidated financial
     statements  at December 31, 2000.  Total assets of GeoFocus at December 31,
     2000 were not material to the consolidated financial statements.  Net sales
     and (loss) of  GeoFocus  were $128 and $(147)  for the three  months  ended
     December 31, 2000.

10.  Gain from Discontinued Operations

     In  December  2001,  the Company  exchanged  a building  of its  previously
     discontinued  Agricultural Equipment segment with a carrying value of $0 in
     satisfaction of mortgage debt of $417. The resulting gain has been recorded
     in discontinued  operations on the accompanying statement of operations and
     reflected  as a gain on sale of  buildings,  since  the  fair  value of the
     building was estimated to equal or exceed the carrying value of the debt.

11.  Employee Benefit Plans

     In the quarter  ended  December 31, 2001,  the Company  recorded $170 as an
     estimate of additional  liability to participants of the Company's Employee
     Stock Ownership Plan. As previously disclosed,  the Company's benefit plans
     are currently  under audit by the  Department  of Labor (DOL).  The Company
     continues  to  cooperate  fully  with the DOL in  regards to the audits but
     Management is unable to determine if any  additional  liability will result
     from the audits.












                                       6
<PAGE>

12.    Segment Information

<TABLE>
<CAPTION>
<S>                                                              <C>                 <C>

                                                                  Three months       Three months
                                                                     Ended               Ended
                                                                  December 31,       December 31,
                                                                      2001               2000
                                                                 ---------------     --------------

Net sales by classes of similar products
Vehicle components                                                      $11,296            $14,652
Electrical components and GPS                                               123                327
                                                                 ---------------     --------------
                                                                        $11,419            $14,979
                                                                 ===============     ==============

Earnings (loss) from operations
Vehicle components
  Before loss on impairment of assets                                   $   318            $  (241)
  Loss on impairment of assets                                                -             (1,996)
                                                                 ---------------     -------------
  Total vehicle components                                                  318             (2,237)
Electrical components and GPS                                              (489)            (1,192)
                                                                 ---------------     --------------
                                                                        $  (171)           $(3,429)
                                                                 ===============     ==============

Identifiable assets
Vehicle components                                                      $23,750            $39,033
Electrical components and GPS                                             1,779              3,726
Corporate                                                                 3,167              1,885
                                                                 ---------------     --------------
Total assets - continuing operations                                     28,696             44,644
                                                                 ===============     ==============

Capital expenditures
Vehicle components                                                      $   118            $   182
Electrical components and GPS                                                 -                  5
                                                                 ---------------     --------------
Total capital expenditures                                              $   118            $   187
                                                                 ===============     ==============


Depreciation and amortization
Vehicle components                                                       $1,002            $   903
Electrical components and GPS                                                65                 64
                                                                 ---------------     --------------
Total depreciation and amortization                                     $ 1,067            $   967
                                                                 ===============     ==============
</TABLE>

13.  Reclassifications

     Certain  amounts  previously  reported in the financial  statements for the
     three months ended December 31, 2000 have been  reclassified  to conform to
     current fiscal year presentation.


                                       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)

Critical Accounting Policies
----------------------------

In  response to the SEC's  Release No.  33-8040,  "Cautionary  Advice  Regarding
Disclosure About Critical Accounting  Policies,  the Company identified the most
critical  accounting  principles upon which our financial  status  depends.  The
Company determined the critical  principles by considering  accounting  policies
that  involve the most  complex or  subjective  decisions  or  assessments.  The
Company identified the most critical  accounting policies to be those related to
impairment of long-lived assets, investments in affiliates, warranty and product
recall, and pensions and post-retirement benefit obligations.

Impairment of Long-Lived Assets
-------------------------------

We account for the impairment of long-lived  assets in accordance with Financial
Accounting  Standards  Board (FASB)  Statement No. 121 and,  beginning in fiscal
year 2003,  will account for it in accordance  with FASB  Statement No. 144. The
Company tests for impairment  using  undiscounted  cash flows and calculates the
amount of impairment using discounted cash flows. Estimates of future cash flows
require judgment and may change based on, among other things, the market for our
products, technology advances, and customer relationships.

Investments in Affiliates
-------------------------

The  Company has  investments  in and notes  receivables  from Ajay of $3,065 at
December 31, 2001. We account for the investment  using the equity method and in
accordance  with Emerging  Issues Task Force 99-10.  We review the valuation and
recoverability of investments in equity affiliates in accordance with Accounting
Principles Board (APB) Opinion 18. The measurement of impairment is based on the
estimated  fair value of our  investment.  The value of our investment and notes
receivable in Ajay could decline if Ajay's  financial  results worsen and we are
not able to collect on the guarantee of Tom Itin which supports this investment.

Warranty and Product Recall
---------------------------

The Company provides a warranty covering defects arising from products sold. The
Company has established a warranty  reserve based on historical  return rates of
products.  In addition,  the Company issued a product recall in late fiscal year
2001. The Company  recorded a reserve for this product recall based on estimates
of number of units to be  returned  and the  estimated  costs to  repair.  While
management  believes  the  estimates  used are  reasonable,  they are subject to
change and such change could be material.


Pensions and Post-retirement Benefit Obligations
------------------------------------------------

The Company  accounts for pensions and  post-retirement  benefits in  accordance
with FASB  Statement No. 87 and FASB  Statement  No. 106. FASB  Statement No. 87
requires us to calculate our pension  expense and  liabilities  using  actuarial
assumptions,  including a discount rate  assumption  and a long-term  asset rate
return  assumption.  Changes in interest rates and market performance can have a
significant  impact on our pension expense and future  payments.  FASB Statement
No. 106  requires  the  Company to accrue  the cost of  post-retirement  benefit
obligations.  The accruals  are based on interest  rates and the costs of health
care.   Changes  in  interest   rates  and  health   care  costs  could   impact
post-retirement expenses and future payments.


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

At December 31, 2001,  essentially all of the Company's $8,922 of trade accounts
payable was  significantly  past due, the working capital deficit was ($19,942),
and the Company  stockholders' equity was a deficit of ($11,614).  Additionally,
in February  2001 the Company  raised  $4,576,  net of expenses,  from a private
placement  of debt in the form of $4,950  of  secured  subordinated  debentures,
which are due March 1, 2002,  bearing interest at 12%. The interest was deferred
until the maturity of the underlying  notes.  The Company does not anticipate it
will be able to make the  principal  and interest  payments when due on March 1,
2002. The Company also ceased paying of preferred  stock dividends in the second
quarter of fiscal 2001.  Also,  as described in Note 7 of Notes to the Unaudited
Consolidated  Financial  Statements,  the Company was not in compliance with the
covenants  of its credit  agreement  with its primary bank at December 31, 2001.
The credit  agreement  matured on July 11,  2001,  and the Company has  obtained
extensions  on this debt  through June 30,  2002.  As a result,  the Company has
classified  the  $7,028  owed to its  primary  bank as a  current  liability  at
December 31, 2001.

The  Company has  outstanding  past due  payables  with  essentially  all of its
suppliers of raw  materials,  components and services and is currently on C.O.D.
or prepayment  status with essentially all of its vendors.  Although the Company
has not  experienced  any  significant  supply  disruptions  in the past several
months,  and is not anticipating any, these vendors could decide, as a result of
the past due  payables,  to  discontinue  or delay the  Company's  supply of raw
materials,  components  and  services  which  could  cause a  disruption  in the
Company's  production and operations.  Such disruption or delay could materially
adversely  affect the Company's  business,  prospects,  financial  condition and
results of operation.

At December 31, 2001, the Company's  contractual  obligations  consisted of bank
debt of $7,028, capital leases of $819, debt of discontinued operations of $799,
Secured  Subordinated  debt and Convertible  Subordinated  debt,  excluding debt
discount, of $4,950 and $2,140,  respectively.  All of this debt except for $155
of capital leases is shown as a current liability because the debt is due within
the next twelve months or is in default.  The Company also has  operating  lease
commitments  which at December 31, 2001 are due $530 in 2002,  $287 in 2003, and
$93 in 2004. The Company does not have any material letters of credit,  purchase
commitments, or debt guarantee outstanding as of December 31, 2001.

To improve  liquidity,  the  Company  has  entered  into a letter of intent with
American  Industrial  Partners  (AIP)  whereby  AIP would  invest  approximately
$10,000,  less fees and  expenses,  into the Company  pursuant to a new Series B
Convertible  Preferred  Stock  offering.  See  Note  8  of  Notes  to  Unaudited
Consolidated   Financial  Statements.   Completion  of  the  proposed  financing
transaction is subject to a number of conditions, including, without limitation,
customary  due diligence  and consent to the  transaction  by the holders of the
Company's  outstanding  convertible  subordinated debt, secured subordinated and
Series A preferred  stock.  Following  completion of a definitive  agreement and
upon  closing of the  transaction,  AIP will be  entitled  to hold a majority of
seats on the Company's Board of Directors.


An  investment  such  as  that  currently  under   consideration  by  AIP  would
significantly  improve the liquidity of the  corporation,  however no assurances
can be given that this transaction,  or any other investment  transaction,  will
ultimately  be  completed.  Until  the  transaction  is  completed,  or  another
alternative  becomes available,  the Company will continue to have a significant
lack of liquidity.


The above  matters  continue to raise a  substantial  doubt about the  Company's
ability to continue as a going concern.  The financial statements do not include
any  adjustments  relating to the  recoverability  and  classification  of asset
carrying  amounts or the amount and  classification  of  liabilities  that might
result should the Company be unable to continue as a going concern.


Cash  increased  $1,069 at December  31, 2001  compared  to  September  30, 2001
because of cash flow from  operations and as a result of borrowing an additional
$1,000 at December 31, 2001, under the Company's revolving bank agreement to use
for  normal  operating  requirements  while the  Company  finalized  the  second
amendment  to the  forbearance  agreement  with its  primary  bank.  The  second
amendment to the forbearance agreement was finalized on January 8, 2002.

Cash flow from  operations  remained  positive in the quarter ended December 31,
2001 at $798,  but declined from $915 for the quarter  ended  December 31, 2000.
Cash from  operations  improved  through a reduction  in the loss in the quarter
ended December 31, 2001 over the corresponding prior year's quarter. The overall
reduction in cash generated  from  operations was a result of a reduction in the
cash generated from net changes in working capital.  The Company  generated cash
of $2,446 from net changes in working  capital in the quarter ended December 31,
2000,  compared to a cash generation of $813 from net changes in working capital
in the quarter ended December 31, 2001.  The positive cash flow from  operations
for the first fiscal  quarter of 2002 differs from the net loss from  operations
primarily  because of non cash operating  expenses of $1,067 for deprecation and
amortization,  a decrease in receivables of $1,711,  offset by the extraordinary
gain from discontinued operations of $417, an increase in inventory of $286, and
a decrease in accounts payable and accrued expenses of $382.

Cash flow from financing  activities was $389 for the quarter ended December 31,
2001 compared to a use of $758 for the quarter ended  December 31, 2000. The net
source of funds was  primarily  due to the  borrowing  of $1,000 at December 31,
2001 under the  revolving  loan  agreement  discussed  above  offset by payments
against borrowings during the quarter.




                                       8

                             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

Market Risk
-----------
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 2000 the FASB issued  Statement of Financial  Accounting  Standards  No.
138,  "Accounting for Certain Derivative  Instruments and Hedging  Activities an
amendment of FASB Statement No. 133" ("SFAS 138").  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
133,  as  amended  by SFAS  137 and 138  establishes  accounting  and  reporting
standards  for all  derivative  instruments.  SFAS 133 and 138 are effective for
fiscal years beginning after June 15, 2000. The Company adopted SFAS 138 in 2001
and it did not have any material impact on the Company's  financial  position or
results of operations.

In July 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 141,
"Business  Combinations,"  and SFAS No.  142,  "Goodwill  and  Other  Intangible
Assets."  SFAS 141 requires  that the purchase  method of accounting be used for
all  business   combinations   initiated   after  June  30,  2001.  Use  of  the
pooling-of-interests method will be prohibited on a prospective basis only. SFAS
142  changes the  accounting  for  goodwill  from an  amortization  method to an
impairment-only  approach.  Thus,  amortization of goodwill,  including goodwill
recorded  in past  business  combinations,  will  cease  upon  adoption  of that
Statement, which for the Company was October 1, 2001. As of October 1, 2001, the
Company did not have any significant  remaining  goodwill.  The adoption of SFAS
141 and SFAS 142 did not have a significant impact on the financial condition or
results of operations of the Company. Goodwill amortization,  was $0, and $10 as
of December 31, 2001 and 2000, respectively.



In June and August 2001, the FASB issued SFAS No.'s 143 and 144, "Accounting for
Asset Retirement  Obligations" and "Accounting for the Impairment or Disposal of
long-lived  Assets."  Under SFAS 143, the fair value of a liability for an asset
retirement  obligation  must be recognized in the period in which it is incurred
if a  reasonable  estimate  of fair  value  can be made.  The  associated  asset
retirement  costs  are  capitalized  as  part  of  the  carrying  amount  of the
long-lived asset. SFAS 144 retains SFAS 121's ("Accounting for the Impairment of
Long-Lived  Assets and for  Long-Lived  Assets to be Disposed  Of")  fundamental
provisions for the: 1) recognition  and  measurement of impairment of long-lived
assets  to be held and  used;  and 2)  measurement  of  long-lived  assets to be
disposed of by sale.  These  statements  are effective for the Company's  fiscal
year ended 2003. The Company has not performed an analysis of the effect of SFAS
143 or 144.


                                       9
<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, 2001 compared to the three months ended December
31, 2000.


Sales
-----

Total net sales decreased  $3,560 to $11,419 in the first quarter of fiscal 2002
from  $14,979 in the first  quarter of fiscal 2001.  Excluding  the sales in the
first fiscal quarter of 2001 of the PPT  subsidiary,  which was shut down in the
second quarter of fiscal 2001, and the sales of the GeoFocus  subsidiary,  which
was  sold  in the  third  quarter  of  fiscal  2001,  (See  Note 9 of  Notes  to
Consolidated  Unaudited Financial Statements) net sales decreased $1,232 or 9.7%
primarily due to lower unit sales volumes in the  Company's  vehicle  components
business  segment  and  phasing  out a  number  of  the  traditional  electrical
component products in the electrical  components and GPS business segment in the
second half of fiscal 2001.

Net sales in the Vehicle  Components segment decreased $3,356, to $11,296 in the
first  quarter of fiscal  2002 over the first  quarter of fiscal  2001 while the
Electrical  Components and GPS business segment  experienced a decrease in sales
of $204 to $123 in the first quarter of fiscal 2002.

Excluding the sales volumes of PPT in the first quarter of fiscal 2001,  Vehicle
Component segment sales decreased  $1,156, or 9.2%.  Excluding the sales volumes
of GeoFocus in the first quarter of fiscal 2001,  Electrical  Components and GPS
segment  sales  decreased  $76,  or 38.2%.  In the Vehicle  Components  segment,
approximately  half of the decline was due to sales  reductions in the Company's
natural gas conversion kit subsidiary,  NESC. The remainder of the sales decline
was comprised of lower sales volumes of electronic  throttle controls (ETC's) in
the heavy truck and automotive  markets as a result of a general slowdown in all
of the major markets the Company's serves. In the Electrical  Components and GPS
segment,  decreased  sales resulted from phasing out a number of its traditional
electrical  component products in the second half of fiscal 2001. The Company is
committed  to the  development  and  production  of sensors  and sensor  related
products,  however,  sales from this segment may be  significantly  lower during
fiscal 2002 as a result of the phase out of the traditional electrical component
products in fiscal 2001.



Gross margin and Impairment Loss
--------------------------------

Gross margins were $2,691,  or 23.5% of net sales, in the first quarter of 2002,
compared to $2,355, or 15.7% of net sales, in the comparable fiscal 2001 period.
Included in the gross margin for the first  quarter of fiscal 2001 were negative
gross margins of $776 related to PPT and GeoFocus.

Excluding PPT and GeoFocus, gross margins decreased $440 in the first quarter of
fiscal 2002 over the first  quarter of fiscal  2001.  As a percent of net sales,
the gross margin of 23.5% of sales in the first fiscal quarter of 2002 was lower
than the 21% of sales, excluding PPT and GeoFocus, in fiscal 2001.

The  Company's  plastic  injection  molding and tooling  subsidiary  (PPT),  the
operating results of which are included in the Vehicle Components business unit,
was shut down in the second  fiscal  quarter of 2001.  Net sales,  gross  margin
(loss) and operating  loss for the quarter ended  December 31, 2000 were $2,200,
$(853),  and  $(3,606),  respectively.  During the first  quarter of fiscal 2001
management  evaluated  the  realizability  of the  assets  of PPT  based  on the
closure. Accordingly, the Company recorded an impairment loss on PPT's property,
plant,  and equipment of $1,996 in the quarter ended  December 31, 2000. It also
established  reserves of $100 and $598 for  obsolete  and excess  inventory  and
estimated uncollectible accounts receivable, respectively.



Operating expenses
------------------

Operating  expenses  were $2,862 for the three  months  ended  December 31, 2001
compared to $3,788,  excluding  the Loss on Impairment of assets at PPT, for the
comparable fiscal 2001 period.  Excluding the operating  expenses related to PPT
and  Geofocus  and the PPT  impairment  loss,  operating  expenses for the three
months ended  December 31, 2000 were $2,807.  The higher  operating  expenses in
fiscal 2002 were due to higher expenses  related to the Company's ESOP Plan (See
Note 11 of notes to unaudited Consolidated Financial Statements).









                                       10
<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, 2001 compared to the three months ended December
31, 2000.

Interest and Other Expenses
---------------------------

Interest expense decreased $133 to $940 in the first quarter of fiscal 2002 from
$1,073 in the first  quarter of fiscal  2001.  Lower  interest  on reduced  debt
levels and lower  interest  rates were  partially  offset by increased  costs of
amortization  of  the  Secured  Subordinated  Debenture  warrant  discounts  and
providing interest on certain operating liabilities.

The Company recognized no share of equity income (loss) in its affiliate,  Ajay,
for the  quarters  ended  December  31,  2001 or 2000 due to  unavailability  of
information. For the fiscal quarter ended December 31, 2001, the Company's share
of any loss is not expected to be material based on Ajay's  previously  reported
results for  continuing  operations  for the period ended March 31, 2001 and the
Company's  percentage to be used for recording its equity interest in results of
affiliate.

Discontinued Operations-Agricultural Segment
--------------------------------------------

Included in Current  portion of long-term  debt and capital  leases at September
30, 2001 is $417 related to the discontinued Agricultural Equipment segment. The
$417 related to a mortgage payable on a building of the  Agricultural  Equipment
segment.  The building's carrying value was $0 at September 30, 2001. During the
first  quarter of fiscal 2002 the  mortgage  holder sold the building at auction
for  approximately  the mortgage  value and  completely  and fully  released the
Company  from the  mortgage.  The Company  recognized  a gain from  discontinued
operations  of $417  related  to the  satisfaction  of the  mortgage.  Since the
estimated  fair value of the building was equal to or greater than the debt, the
gain was recorded as a gain on sale of building from discontinued operations.

Net earnings available to common shareholders
---------------------------------------------

Net loss  allocable  to common  shareholders  declined  to $(906) in the quarter
ended  December  31, 2001  compared to  $(4,641) in the  comparative  prior year
period primarily due to losses included in fiscal 2001 that were not incurred in
the first quarter of fiscal 2002.  These losses included losses on impartment of
assets at PPT, other operating losses attributable to PPT and GeoFocus in fiscal
2001.

The effective income tax rate was 0.00% for the quarters ended December 31, 2001
and 2000.  The Company is in a net operating loss  carryforward  position and is
providing a 100%  valuation  allowance  on all  deferred tax assets due to going
concern issues.




                                       11
<PAGE>


                                     Part II

Item 1.   Legal Proceedings

          None

Item 2.   Changes in Securities and Use of Proceeds

          None

Item 3.   Defaults Upon Senior Securities

          On November 15,  2000,  the Company  defaulted  under the terms of its
          credit  agreement with the Bank when it failed to repay Term Loans III
          and  IV in  the  remaining  principal  amounts  of  $694  and  $1,000,
          respectively,  both due on November 15, 2000. As of December 31, 2001,
          no waivers  have been  obtained  and the  default  has not been cured.
          Forebearance agreements have been reached with the Bank, most recently
          on January 8, 2002 to extend the loans to June 30, 2002.  All the debt
          with the Bank of $7,028 has been classified as current  liabilities in
          the accompanying Consolidated Balance Sheet at December 31, 2001.

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(a)     Form of Indemnification Agreement for Douglas E.
                           Hailey

               10.1(b)     Form of Indemnification Agreement for David S. Eberly

(b)       Reports on Form 8-K
               None

                                                                Exhibit 10.1 (a)


                                INDEMNITY AGREEMENT

     This  Agreement is entered  into as of this 13th day of March,  2001 by and
     between Williams Controls,  Inc., a Delaware  corporation  (hereinafter the
     "Company") and Douglas Hailey (hereinafter "Indemnitee").

                                     RECITALS

     A.  Indemnitee  is a  director  and/or  officer of the  Company  performing
     valuable  services for it, and the Company is desirous of having Indemnitee
     continue to serve in that capacity.

     B. The Company,  through its Bylaws and Certificate of  Incorporation,  has
     provided  for the  indemnification  of its  directors  and off icers to the
     maximum extent authorized by law.

     C.  Such  Bylaws,  the  Certificate  of  Incorporation  and the law are not
     exclusive,  and thereby  contemplate  that  contracts  may be entered  into
     between  the  Company  and its  officers  and  directors  with  respect  to
     indemnification.

     D. The Company has been unable to obtain Directors' and Officers' Liability
     Insurance ("D&O Insurance") for the purpose of protecting its directors and
     officers in connection with the services performed by them as directors and
     officers  with  acceptable  coverage's  at a  reasonable  cost  and  it  is
     uncertain -whether such insurance will be available in the future.

     E. Indemnitee has expressed  concern that the  indemnities  available under
     the Company's Bylaws,  Certificate of Incorporation  and D&O Insurance,  if
     any, may be  inadequate to protect him against  risks  associated  with his
     service to the Company.  The Company and Indemnitee both recognize that the
     Bylaws and Certificate of Incorporation  are subject to change and that any
     D&O  Insurance  that the  Company may obtain  likewise  would be subject to
     change or cancellation. Indemnitee may not be willing to continue in office
     in the absence of the  benefits to be  accorded  to  Indemnitee  under this
     Agreement.

     F. In order to induce  Indemnitee to continue to serve as a director and/or
     officer of the Company and in consideration of his continued  service,  the
     Company has determined and agreed to enter into this Agreement to indemnify
     Indemnitee as provided herein.

                                    AGREEMENT

     1. Indemnification.  Subject only to the exclusions set forth in Section 3,
     the Company hereby agrees to hold harmless and indemnify Indemnitee:

     (a) Against any and all expenses (including  attorneys' fees),  judgements,
     fines,  penalties and amounts paid in settlement  (including  all interest,
     assessments  and other  charges  paid or payable in  connection  with or in
     respect of such expenses,  judgments,  fines,  penalties or amounts paid in
     settlement)  actually and  reasonably  incurred by Indemnitee in connection
     with any  threatened,  pending or  completed  action,  suit or  proceeding,
     whether civil,  criminal,  administrative  or  investigative  (including an
     action by or in the right of the Company),  to which  Indemnitee is, was at
     the date hereof or at any time becomes a party or witness, or is threatened
     to be made a party or witness,  by reason of the fact that  Indemnitee  is,
     was or at any time  becomes a director,  officer,  employee or agent of the
     Company  (or is or was  serving or at any time serves at the request of the
     Company as a director,  officer,  employee,  trustee, agent or fiduciary of
     another  corporation,  partnership,  joint venture,  employee benefit plan,
     trust or other  enterprise)  or by reason of  anything  done or not done by
     that  Indemnitee,   except  with  respect  to  actions  instituted  by  the
     Indemnitee unless approved by the board; and

02/20/02 Indemnity Agreement             -1-
                                                                Exhibit 10.1 (a)
<PAGE>


     (b)  For  recovery  under  any D&O  Insurance  maintained  by the  Company,
     regardless of whether Indemnitee ultimately is determined to be entitled to
     such  indemnification,  expense advance or insurance recovery,  as the case
     may be;

     (c)  Otherwise,  to the full extent  provided by (i) the  Delaware  General
     Corporation Law or any amendment  thereof or any other statutory  provision
     authorizing or permitting  such  indemnification  that is adopted after the
     date of this  Agreement and (ii) the Company's  Bylaws and  Certificate  of
     Incorporation.

     (d) To the extent  permitted  by law, the term  "expenses"  as used in this
     Agreement  shall mean  attorneys'  fees and all other  costs,  expenses and
     obligations paid or incurred in connection with  investigating,  defending,
     being a witness in or participating in (including an appeal),  or preparing
     to  defend,  be a  witness  in or  participate  in any  event to which  the
     Indemnitee is entitled to indemnification under this Agreement.

     2. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of
     this Agreement to  indemnification by the Company for some of the expenses,
     or a  portion  of the  judgments,  fines,  penalties  and  amounts  paid in
     settlement of an action or claim, but not for the total amount thereof, the
     Company  nevertheless shall Indemnify Indemnitee for the portion thereof to
     which Indemnitee is entitled.  Notwithstanding  any other provision of this
     Agreement,  if  Indemnitee  is  successful  on the merits or  otherwise  in
     defense of any or all actions or claims, relating in whole or in part to an
     indemnifiable event or in defense of any issue or matter therein, including
     dismissal without  prejudice,  Indemnitee shall be indemnified  against all
     expenses incurred in connection therewith.

     3.  Exclusions.  No indemnity shall be paid by the Company pursuant to this
     Agreement:

     (a) If a final decision by a Court having  jurisdiction in the matter shall
     determine that such indemnification is not lawful;

     (b) If payment is made to Indemnitee under any D&O Insurance  purchased and
     maintained by the Company;

     (c) For  compensation  paid to  Indemnitee,  if it shall be determined by a
     final judgment or other final  adjudication  that such  compensation was in
     violation of law;

     (d) If  Indemnitee's  conduct is finally  adjudged  to have been  knowingly
     fraudulent  or  deliberately  dishonest,  which conduct was material to the
     cause of action 'so adjudicated;

     (e) For any suit in which  judgment is rendered  against  Indemnitee for an
     accounting  of profits  made from the  purchase  or sale by  Indemnitee  of
     securities of the company under  Section 16(b) of the  Securities  Exchange
     Act of 1934 and  amendments  thereto  or  similar  provisions  of any other
     statutory or common law; or

     (f) For any  suit in which  the  Indemnitee  is  finally  adjudged  to have
     obtained  a  personal  profit  or  advantage  to which  he was not  legally
     entitled.

     4. No Presumption.  For purposes of this  Agreement,  to the fullest extent
     permitted by law, the  termination of any action,  suit or  proceeding,  by
     judgment,  order,  settlement  (whether with or without court  approval) or
     conviction, or upon a plea of nolo contendere, or its equivalent, shall not
     create a presumption  that Indemnitee did not meet any particular  standard
     of conduct  or have any  particular  belief or that a court has  determined
     that indemnification is not permitted by applicable law.


02/20/02 Indemnity Agreement              -2-
                                                                Exhibit 10.1 (a)
<PAGE>


     5.  Settlement  and Costs.  The  Company  shall not be liable to  indemnify
     Indemnitee  under  this  Agreement  for any costs,  or charges or  expenses
     incurred  or amounts  paid in  settlement  of any action or claim  effected
     without its  written  consent.  The Company  shall not settle any action or
     claim in any  manner,  which  would  impose any  penalty or  limitation  on
     Indemnitee without  Indemnitee's  written consent.  Neither the Company nor
     Indemnitee will unreasonably withhold their consent.

     6. D&O Insurance.  The Company agrees that it shall use reasonable  efforts
     to obtain and  maintain in effect for the benefit of  Indemnitee  a binding
     and  enforceable  policy  of D&O  Insurance;  provided,  however,  that the
     Company  shall not be required to obtain or maintain  such D&O Insurance if
     said insurance is not reasonably available or if in the reasonable business
     judgment of the then directors of the Company,  either (i) the premium cost
     of such  insurance  is  substantially  disproportionate  to the  amount  of
     coverage,  or (ii) the coverage provided by such insurance is so limited by
     exclusions that there is insufficient benefit from such insurance.

     7. Continuation of Indemnity. All agreements and obligations of the Company
     contained herein shall continue during the period Indemnitee is a director,
     officer,  employee  or agent of the  Company  (or is, or was serving at the
     request of the Company as a director,  officer,  trustee, employee or agent
     for  another  corporation,  partnership,  joint  venture,  trust  or  other
     enterprise or any employee  benefit plan) and shall continue  thereafter so
     long as Indemnitee  shall be subject to any possible  claim or  threatened,
     pending or completed action, suit or proceeding, whether civil, criminal or
     investigative,  by reason of the fact that Indemnitee was a director and/or
     officer of the Company or serving in any other capacity referred to herein.

     8. Payment of Claims.  If an obligation under this Agreement is not paid by
     the Company, or on its behalf, within 90 days after written notice has been
     received by the Company,  Indemnitee may at any time thereafter  bring suit
     against the Company to recover the unpaid amount of the obligation.

     9.  Subrogation.  In the event of  payment  by or on behalf of the  Company
     under this Agreement, the Company shall be subrogated to the extent of such
     payment  to all of the  rights of  recovery  of the  Indemnitee,  who shall
     execute all papers  required and shall do everything  that may be necessary
     to secure such rights  including the execution of such documents  necessary
     to enable the Company effectively to bring suit to enforce such rights.

     10.  Notice.  Indemnitee,  as a  condition  precedent  to the  right  to be
     indemnified  under  this  Agreement,  shall give to the  Company  notice in
     writing as soon as practicable  of any claim made for which  indemnity will
     or could be sought  under this  Agreement.  Notice to the Company  shall be
     directed to the company,  Williams  Controls,  Inc.,  14100 SW 72nd Avenue,
     Portland, Oregon 97224, Attention:  President (or such other address as the
     Company shall designate in writing to  Indemnitee);  notice shall be deemed
     received  if sent by  prepaid  mail  properly  addressed,  the date of such
     notice being the date  postmarked.  In addition,  the Indemnitee shall give
     the Company such  information and cooperation as it may reasonably  require
     and as shall be within Indemnitee's power.

     11. Defense of Claims. With respect to any action, suit or proceeding as to
     which Indemnitee is seeking  indemnification under this Agreement and as to
     'which Indemnitee notifies the Company pursuant to the provisions hereof:

     (a) The Company will be entitled to participate therein at its own expense;
     and






02/20/02 Indemnity Agreement             -3-
                                                                Exhibit 10.1 (a)
<PAGE>


     (b) Except as otherwise provided below, to the extent that it may wish, the
     Company, jointly with any othe3r indemnifying party similarly notified will
     be entitled to assume the defense  thereof,  with counsel  satisfactory  to
     Indemnitee.  After notice from the Company to Indemnitee of its election so
     to assume the defense thereof, the Company will not be liable to Indemnitee
     under this Agreement for any legal or other expenses  subsequently incurred
     by Indemnitee in connection  with the defense thereof other than reasonable
     costs of.  investigation or as otherwise  provided below.  Indemnitee shall
     have the right to employ his counsel in such action, suit or proceeding but
     the fees and  expenses  of such  counsel  incurred  after  notice  from the
     Company of its assumption of the defense thereof shall be at the expense of
     Indemnitee  unless (i) the  employment  of counsel by  Indemnitee  has been
     authorized by the Company,  (ii) Indemnitee shall have reasonably concluded
     that there may be a conflict of interest between the Company and Indemnitee
     in the conduct of the defense of such action or (iii) the Company shall not
     in fact have employed counsel to assume the defense of such action, in each
     of which cases the fees and expenses of counsel  shall be at the expense of
     the Company. The Company shall not be entitled to assume the defense of any
     action,  suit or proceeding brought by or on behalf of the Company or as to
     which Indemnitee  shall have made the reasonable  conclusion that there may
     be a conflict of interest between the Company and Indemnitee in the conduct
     of the defense of such action.

     12. Advances and Repayment of Expenses. All reasonable expenses incurred by
     Indemnitee   in   defending   or   investigating   any   civil,   criminal,
     administrative or investigative  action,  suit. or proceeding shall be paid
     in advance of the final  disposition  of such action,  suit,  proceeding or
     investigation.  In addition,  the Company may advance expenses  incurred by
     Indemnitee  in  connection  with  the  recovery  under  any  D&O  Insurance
     maintained by the Company,  regardless of whether Indemnitee  ultimately is
     determined  to be  entitled  to such  indemnification,  expense  advance or
     insurance  recovery,  as the case may be. Indemnitee agrees that Indemnitee
     will  reimburse the Company for all such expense so advanced by the Company
     in defending any civil,  criminal,  administrative or investigative action,
     suit or proceeding  against  Indemnitee in the event and only to the extent
     that it shall be ultimately  determined  that Indemnitee is not entitled to
     be  indemnified  by the Company for such expenses  under the  provisions of
     applicable  law, the Bylaws,  the  Certificate  of  Incorporation,  on this
     Agreement or otherwise.

     13.  Separability.  Each of the  provisions of this Agreement is a separate
     and  distinct  agreement  and  independent  of the  others,  so that if any
     provision hereof shall be held to be invalid or  unenforceable  for reason,
     either  generally or only in particular  circumstances,  such invalidity or
     unenforceability  shall not affect the  validity or  enforceability  of the
     other  provisions   hereof,  and  any  provision  held  to  be  invalid  or
     unenforceable in a particular  circumstance  shall be valid and enforceable
     in all other circumstances to the extent permitted by law.

     14.  Enforcement.  The Company  expressly  confirms  and agrees that it has
     entered into this Agreement and has assumed the  obligations  imposed on it
     hereunder in order to induce  Indemnitee  to continue as a director  and/or
     officer of the Company,  and  acknowledges  that Indemnitee is relying upon
     this  Agreement in continuing in such  capacity.  In any action between the
     parties  seeking  enforcement  of any of the terms and  provisions  of this
     Agreement,  the  prevailing  party in that action  shall be entitled to its
     reasonable  costs  and  expenses,  including  court  costs  and  reasonable
     attorneys' fees in addition to such other relief as may be granted.

     15. Non-Exclusivity.  Nothing in this Agreement shall diminish or otherwise
     restrict any right of Indemnitee to be  indemnified  under any provision of
     the  Certificate  of  Incorporation  or Bylaws of the Company or any of its
     subsidiaries, any insurance policy, any applicable law, any other agreement
     or otherwise.




02/20/02 Indemnity Agreement            -4-
                                                                Exhibit 10.1 (a)
<PAGE>


     16. Governing Law: Binding Effect; Amendment and Termination, Etc.

     (a) This Agreement shall be interpreted and enforced in accordance with the
     laws of the State of Delaware.

     (b) This Agreement  shall be binding upon  Indemnitee and upon the Company,
     its successors  and assigns,  and shall inure to the benefit of Indemnitee,
     his heirs,  personal  representatives and assigns and to the benefit of the
     Company, its successors and assigns.

     (c)  No  amendment,  modification,  termination  or  cancellation  of  this
     Agreement  shall be  effective  unless in  writing  signed by both  parties
     hereto.

     (d) The Company shall require and cause any  successor  (whether  direct or
     indirect  by  purchase,   merger,   consolidation  or  otherwise)  to  all,
     substantially  all or a substantial  part, of the business and/or assets of
     the Company, by written agreement in form and substance satisfactory to the
     Indemnitee,  expressly to assume and agree to perform this Agreement in the
     same manner and to the same  extent  that the Company  would be required to
     perform if no such succession had taken place.



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


                                      WILLIAMS CONTROLS, INC.



                                  By: ________________________________________
                                          Thomas K. Ziegler
                                          President and Chief Executive Officer


                                     INDEMNITEE



                                  By: ________________________________________
                                          Douglas Hailey
                                          Director












02/20/02 Indemnity Agreement               -5-
                                                                Exhibit 10.1 (a)
<PAGE>


                                     AMENDMENT NO. 1
                                 TO INDEMNITY AGREEMENT


     This  Amendment  is entered  into  between  Williams  Controls,  Inc.  (the
     "Company")  and Douglas  Hailey  ("Indemnitee")  effective  the 13th day of
     March, 2001, to supplement and amend that certain Indemnity  Agreement (the
     "Agreement") dated May 18, 1989 between the Company and Indemnitee.

     1. The Agreement hereby is amended to delete Section 12 in its entirety and
     insert the following in replacement thereof.

     12. Advances and Repayment of Expenses: All reasonable expenses incurred by
     Indemnitee   in   defending   or   investigating   any   civil,   criminal,
     administrative or investigative action, suit or proceeding shall be paid in
     advance  of the final  disposition  of such  action,  suit,  proceeding  or
     investigation.  In addition,  the Company may advance expenses  incurred by
     Indemnitee  in  connection  with  the  recovery  under  any  D&O  Insurance
     maintained by the Company,  regardless of whether Indemnitee  ultimately is
     determined  to be  entitled  to such  indemnification,  expense  advance or
     insurance  recovery,  as the case may be. Indemnitee agrees that Indemnitee
     will  reimburse the Company for all such expense so advanced by the Company
     in defending any civil,  criminal,  administrative or investigative action,
     suit or proceeding  against  Indemnitee in the event and only to the extent
     that it shall be ultimately  determined  that Indemnitee is not entitled to
     be  indemnified  by the Company for such expenses  under the  provisions of
     applicable  law,  the  Bylaws,  the  Certificate  of  Incorporation,   this
     Agreement or otherwise.

     2. All terms  and  provisions  of the  Agreement,  except  as  specifically
     amended herein, remain in full force and effect and are incorporated herein
     by reference.

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


                                      WILLIAMS CONTROLS, INC.



                                  By: _________________________________________
                                          Thomas K. Ziegler
                                          President and Chief Executive Officer


                                      INDEMNITEE



                                  By: _________________________________________
                                          Douglas Hailey
                                          Director






02/20/02 Indemnity Agreement           -6-
<PAGE>

                                                                Exhibit 10.1 (b)


                               INDEMNITY AGREEMENT

     This Agreement is entered into as of this 24th day of January,  2002 by and
     between Williams Controls,  Inc., a Delaware  corporation  (hereinafter the
     "Company") and David S. Eberly (hereinafter "Indemnitee").

                                    RECITALS

     A.  Indemnitee  is a  director  and/or  officer of the  Company  performing
     valuable  services for it, and the Company is desirous of having Indemnitee
     continue to serve in that capacity.

     B. The Company,  through its Bylaws and Certificate of  Incorporation,  has
     provided  for the  indemnification  of its  directors  and off icers to the
     maximum extent authorized by law.

     C.  Such  Bylaws,  the  Certificate  of  Incorporation  and the law are not
     exclusive,  and thereby  contemplate  that  contracts  may be entered  into
     between  the  Company  and its  officers  and  directors  with  respect  to
     indemnification.

     D. The Company has been unable to obtain Directors' and Officers' Liability
     Insurance ("D&O Insurance") for the purpose of protecting its directors and
     officers in connection with the services performed by them as directors and
     officers  with  acceptable  coverage's  at a  reasonable  cost  and  it  is
     uncertain -whether such insurance will be available in the future.

     E. Indemnitee has expressed  concern that the  indemnities  available under
     the Company's Bylaws,  Certificate of Incorporation  and D&O Insurance,  if
     any, may be  inadequate to protect him against  risks  associated  with his
     service to the Company.  The Company and Indemnitee both recognize that the
     Bylaws and Certificate of Incorporation  are subject to change and that any
     D&O  Insurance  that the  Company may obtain  likewise  would be subject to
     change or cancellation. Indemnitee may not be willing to continue in office
     in the absence of the  benefits to be  accorded  to  Indemnitee  under this
     Agreement.

     F. In order to induce  Indemnitee to continue to serve as a director and/or
     officer of the Company and in consideration of his continued  service,  the
     Company has determined and agreed to enter into this Agreement to indemnify
     Indemnitee as provided herein.

                                    AGREEMENT

     1. Indemnification.  Subject only to the exclusions set forth in Section 3,
     the Company hereby agrees to hold harmless and indemnify Indemnitee:

     (a) Against any and all expenses (including  attorneys' fees),  judgements,
     fines,  penalties and amounts paid in settlement  (including  all interest,
     assessments  and other  charges  paid or payable in  connection  with or in
     respect of such expenses,  judgments,  fines,  penalties or amounts paid in
     settlement)  actually and  reasonably  incurred by Indemnitee in connection
     with any  threatened,  pending or  completed  action,  suit or  proceeding,
     whether civil,  criminal,  administrative  or  investigative  (including an
     action by or in the right of the Company),  to which  Indemnitee is, was at
     the date hereof or at any time becomes a party or witness, or is threatened
     to be made a party or witness,  by reason of the fact that  Indemnitee  is,
     was or at any time  becomes a director,  officer,  employee or agent of the
     Company  (or is or was  serving or at any time serves at the request of the
     Company as a director,  officer,  employee,  trustee, agent or fiduciary of
     another  corporation,  partnership,  joint venture,  employee benefit plan,
     trust or other  enterprise)  or by reason of  anything  done or not done by
     that  Indemnitee,   except  with  respect  to  actions  instituted  by  the
     Indemnitee unless approved by the board; and

02/20/02 Indemnity Agreement             -1-
<PAGE>

                                                                Exhibit 10.1 (b)


     (b)  For  recovery  under  any D&O  Insurance  maintained  by the  Company,
     regardless of whether Indemnitee ultimately is determined to be entitled to
     such  indemnification,  expense advance or insurance recovery,  as the case
     may be;

     (c)  Otherwise,  to the full extent  provided by (i) the  Delaware  General
     Corporation Law or any amendment  thereof or any other statutory  provision
     authorizing or permitting  such  indemnification  that is adopted after the
     date of this  Agreement and (ii) the Company's  Bylaws and  Certificate  of
     Incorporation.

     (d) To the extent  permitted  by law, the term  "expenses"  as used in this
     Agreement  shall mean  attorneys'  fees and all other  costs,  expenses and
     obligations paid or incurred in connection with  investigating,  defending,
     being a witness in or participating in (including an appeal),  or preparing
     to  defend,  be a  witness  in or  participate  in any  event to which  the
     Indemnitee is entitled to indemnification under this Agreement.

     2. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of
     this Agreement to  indemnification by the Company for some of the expenses,
     or a  portion  of the  judgments,  fines,  penalties  and  amounts  paid in
     settlement of an action or claim, but not for the total amount thereof, the
     Company  nevertheless shall Indemnify Indemnitee for the portion thereof to
     which Indemnitee is entitled.  Notwithstanding  any other provision of this
     Agreement,  if  Indemnitee  is  successful  on the merits or  otherwise  in
     defense of any or all actions or claims, relating in whole or in part to an
     indemnifiable event or in defense of any issue or matter therein, including
     dismissal without  prejudice,  Indemnitee shall be indemnified  against all
     expenses incurred in connection therewith.

     3.  Exclusions.  No indemnity shall be paid by the Company pursuant to this
     Agreement:

     (a) If a final decision by a Court having  jurisdiction in the matter shall
     determine that such indemnification is not lawful;

     (b) If payment is made to Indemnitee under any D&O Insurance  purchased and
     maintained by the Company;

     (c) For  compensation  paid to  Indemnitee,  if it shall be determined by a
     final judgment or other final  adjudication  that such  compensation was in
     violation of law;

     (d) If  Indemnitee's  conduct is finally  adjudged  to have been  knowingly
     fraudulent  or  deliberately  dishonest,  which conduct was material to the
     cause of action 'so adjudicated;

     (e) For any suit in which  judgment is rendered  against  Indemnitee for an
     accounting  of profits  made from the  purchase  or sale by  Indemnitee  of
     securities of the company under  Section 16(b) of the  Securities  Exchange
     Act of 1934 and  amendments  thereto  or  similar  provisions  of any other
     statutory or common law; or

     (f) For any  suit in which  the  Indemnitee  is  finally  adjudged  to have
     obtained  a  personal  profit  or  advantage  to which  he was not  legally
     entitled.

     4. No Presumption.  For purposes of this  Agreement,  to the fullest extent
     permitted by law, the  termination of any action,  suit or  proceeding,  by
     judgment,  order,  settlement  (whether with or without court  approval) or
     conviction, or upon a plea of nolo contendere, or its equivalent, shall not
     create a presumption  that Indemnitee did not meet any particular  standard
     of conduct  or have any  particular  belief or that a court has  determined
     that indemnification is not permitted by applicable law.


02/20/02 Indemnity Agreement              -2-
<PAGE>

                                                                Exhibit 10.1 (b)


     5.  Settlement  and Costs.  The  Company  shall not be liable to  indemnify
     Indemnitee  under  this  Agreement  for any costs,  or charges or  expenses
     incurred  or amounts  paid in  settlement  of any action or claim  effected
     without its  written  consent.  The Company  shall not settle any action or
     claim in any  manner,  which  would  impose any  penalty or  limitation  on
     Indemnitee without  Indemnitee's  written consent.  Neither the Company nor
     Indemnitee will unreasonably withhold their consent.

     6. D&O Insurance.  The Company agrees that it shall use reasonable  efforts
     to obtain and  maintain in effect for the benefit of  Indemnitee  a binding
     and  enforceable  policy  of D&O  Insurance;  provided,  however,  that the
     Company  shall not be required to obtain or maintain  such D&O Insurance if
     said insurance is not reasonably available or if in the reasonable business
     judgment of the then directors of the Company,  either (i) the premium cost
     of such  insurance  is  substantially  disproportionate  to the  amount  of
     coverage,  or (ii) the coverage provided by such insurance is so limited by
     exclusions that there is insufficient benefit from such insurance.

     7. Continuation of Indemnity. All agreements and obligations of the Company
     contained herein shall continue during the period Indemnitee is a director,
     officer,  employee  or agent of the  Company  (or is, or was serving at the
     request of the Company as a director,  officer,  trustee, employee or agent
     for  another  corporation,  partnership,  joint  venture,  trust  or  other
     enterprise or any employee  benefit plan) and shall continue  thereafter so
     long as Indemnitee  shall be subject to any possible  claim or  threatened,
     pending or completed action, suit or proceeding, whether civil, criminal or
     investigative,  by reason of the fact that Indemnitee was a director and/or
     officer of the Company or serving in any other capacity referred to herein.

     8. Payment of Claims.  If an obligation under this Agreement is not paid by
     the Company, or on its behalf, within 90 days after written notice has been
     received by the Company,  Indemnitee may at any time thereafter  bring suit
     against the Company to recover the unpaid amount of the obligation.

     9.  Subrogation.  In the event of  payment  by or on behalf of the  Company
     under this Agreement, the Company shall be subrogated to the extent of such
     payment  to all of the  rights of  recovery  of the  Indemnitee,  who shall
     execute all papers  required and shall do everything  that may be necessary
     to secure such rights  including the execution of such documents  necessary
     to enable the Company effectively to bring suit to enforce such rights.

     10.  Notice.  Indemnitee,  as a  condition  precedent  to the  right  to be
     indemnified  under  this  Agreement,  shall give to the  Company  notice in
     writing as soon as practicable  of any claim made for which  indemnity will
     or could be sought  under this  Agreement.  Notice to the Company  shall be
     directed to the company,  Williams  Controls,  Inc.,  14100 SW 72nd Avenue,
     Portland, Oregon 97224, Attention:  President (or such other address as the
     Company shall designate in writing to  Indemnitee);  notice shall be deemed
     received  if sent by  prepaid  mail  properly  addressed,  the date of such
     notice being the date  postmarked.  In addition,  the Indemnitee shall give
     the Company such  information and cooperation as it may reasonably  require
     and as shall be within Indemnitee's power.

     11. Defense of Claims. With respect to any action, suit or proceeding as to
     which Indemnitee is seeking  indemnification under this Agreement and as to
     'which Indemnitee notifies the Company pursuant to the provisions hereof:

     (a) The Company will be entitled to participate therein at its own expense;
     and






02/20/02 Indemnity Agreement           -3-
<PAGE>

                                                                Exhibit 10.1 (b)


     (b) Except as otherwise provided below, to the extent that it may wish, the
     Company, jointly with any othe3r indemnifying party similarly notified will
     be entitled to assume the defense  thereof,  with counsel  satisfactory  to
     Indemnitee.  After notice from the Company to Indemnitee of its election so
     to assume the defense thereof, the Company will not be liable to Indemnitee
     under this Agreement for any legal or other expenses  subsequently incurred
     by Indemnitee in connection  with the defense thereof other than reasonable
     costs of.  investigation or as otherwise  provided below.  Indemnitee shall
     have the right to employ his counsel in such action, suit or proceeding but
     the fees and  expenses  of such  counsel  incurred  after  notice  from the
     Company of its assumption of the defense thereof shall be at the expense of
     Indemnitee  unless (i) the  employment  of counsel by  Indemnitee  has been
     authorized by the Company,  (ii) Indemnitee shall have reasonably concluded
     that there may be a conflict of interest between the Company and Indemnitee
     in the conduct of the defense of such action or (iii) the Company shall not
     in fact have employed counsel to assume the defense of such action, in each
     of which cases the fees and expenses of counsel  shall be at the expense of
     the Company. The Company shall not be entitled to assume the defense of any
     action,  suit or proceeding brought by or on behalf of the Company or as to
     which Indemnitee  shall have made the reasonable  conclusion that there may
     be a conflict of interest between the Company and Indemnitee in the conduct
     of the defense of such action.

     12. Advances and Repayment of Expenses. All reasonable expenses incurred by
     Indemnitee   in   defending   or   investigating   any   civil,   criminal,
     administrative or investigative  action,  suit. or proceeding shall be paid
     in advance of the final  disposition  of such action,  suit,  proceeding or
     investigation.  In addition,  the Company may advance expenses  incurred by
     Indemnitee  in  connection  with  the  recovery  under  any  D&O  Insurance
     maintained by the Company,  regardless of whether Indemnitee  ultimately is
     determined  to be  entitled  to such  indemnification,  expense  advance or
     insurance  recovery,  as the case may be. Indemnitee agrees that Indemnitee
     will  reimburse the Company for all such expense so advanced by the Company
     in defending any civil,  criminal,  administrative or investigative action,
     suit or proceeding  against  Indemnitee in the event and only to the extent
     that it shall be ultimately  determined  that Indemnitee is not entitled to
     be  indemnified  by the Company for such expenses  under the  provisions of
     applicable  law, the Bylaws,  the  Certificate  of  Incorporation,  on this
     Agreement or otherwise.

     13.  Separability.  Each of the  provisions of this Agreement is a separate
     and  distinct  agreement  and  independent  of the  others,  so that if any
     provision hereof shall be held to be invalid or  unenforceable  for reason,
     either  generally or only in particular  circumstances,  such invalidity or
     unenforceability  shall not affect the  validity or  enforceability  of the
     other  provisions   hereof,  and  any  provision  held  to  be  invalid  or
     unenforceable in a particular  circumstance  shall be valid and enforceable
     in all other circumstances to the extent permitted by law.

     14.  Enforcement.  The Company  expressly  confirms  and agrees that it has
     entered into this Agreement and has assumed the  obligations  imposed on it
     hereunder in order to induce  Indemnitee  to continue as a director  and/or
     officer of the Company,  and  acknowledges  that Indemnitee is relying upon
     this  Agreement in continuing in such  capacity.  In any action between the
     parties  seeking  enforcement  of any of the terms and  provisions  of this
     Agreement,  the  prevailing  party in that action  shall be entitled to its
     reasonable  costs  and  expenses,  including  court  costs  and  reasonable
     attorneys' fees in addition to such other relief as may be granted.

     15. Non-Exclusivity.  Nothing in this Agreement shall diminish or otherwise
     restrict any right of Indemnitee to be  indemnified  under any provision of
     the  Certificate  of  Incorporation  or Bylaws of the Company or any of its
     subsidiaries, any insurance policy, any applicable law, any other agreement
     or otherwise.




02/20/02 Indemnity Agreement           -4-
<PAGE>

                                                                Exhibit 10.1 (b)


     16. Governing Law: Binding Effect; Amendment and Termination, Etc.

     (a) This Agreement shall be interpreted and enforced in accordance with the
     laws of the State of Delaware.

     (b) This Agreement  shall be binding upon  Indemnitee and upon the Company,
     its successors  and assigns,  and shall inure to the benefit of Indemnitee,
     his heirs,  personal  representatives and assigns and to the benefit of the
     Company, its successors and assigns.

     (c)  No  amendment,  modification,  termination  or  cancellation  of  this
     Agreement  shall be  effective  unless in  writing  signed by both  parties
     hereto.

     (d) The Company shall require and cause any  successor  (whether  direct or
     indirect  by  purchase,   merger,   consolidation  or  otherwise)  to  all,
     substantially  all or a substantial  part, of the business and/or assets of
     the Company, by written agreement in form and substance satisfactory to the
     Indemnitee,  expressly to assume and agree to perform this Agreement in the
     same manner and to the same  extent  that the Company  would be required to
     perform if no such succession had taken place.




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


                                    WILLIAMS CONTROLS, INC.



                                    By: ________________________________________
                                          Thomas K. Ziegler
                                          President and Chief Executive Officer


                                    INDEMNITEE



                                    By: ________________________________________
                                          David S. Eberly
                                          Director











02/20/02 Indemnity Agreement              -5-
<PAGE>

                                                                Exhibit 10.1 (b)


                                    AMENDMENT NO. 1
                                TO INDEMNITY AGREEMENT


     This  Amendment  is entered  into  between  Williams  Controls,  Inc.  (the
     "Company")  and David S. Eberly  ("Indemnitee")  effective  the 24th day of
     January,  2002, to supplement  and amend that certain  Indemnity  Agreement
     (the "Agreement") dated May 18, 1989 between the Company and Indemnitee.

     1. The Agreement hereby is amended to delete Section 12 in its entirety and
     insert the following in replacement thereof.

     12. Advances and Repayment of Expenses: All reasonable expenses incurred by
     Indemnitee   in   defending   or   investigating   any   civil,   criminal,
     administrative or investigative action, suit or proceeding shall be paid in
     advance  of the final  disposition  of such  action,  suit,  proceeding  or
     investigation.  In addition,  the Company may advance expenses  incurred by
     Indemnitee  in  connection  with  the  recovery  under  any  D&O  Insurance
     maintained by the Company,  regardless of whether Indemnitee  ultimately is
     determined  to be  entitled  to such  indemnification,  expense  advance or
     insurance  recovery,  as the case may be. Indemnitee agrees that Indemnitee
     will  reimburse the Company for all such expense so advanced by the Company
     in defending any civil,  criminal,  administrative or investigative action,
     suit or proceeding  against  Indemnitee in the event and only to the extent
     that it shall be ultimately  determined  that Indemnitee is not entitled to
     be  indemnified  by the Company for such expenses  under the  provisions of
     applicable  law,  the  Bylaws,  the  Certificate  of  Incorporation,   this
     Agreement or otherwise.

     2. All terms  and  provisions  of the  Agreement,  except  as  specifically
     amended herein, remain in full force and effect and are incorporated herein
     by reference.

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


                                    WILLIAMS CONTROLS, INC.



                                  By: _________________________________________
                                          Thomas K. Ziegler
                                          President and Chief Executive Officer


                                    INDEMNITEE



                                  By: _________________________________________
                                          David S. Eberly
                                          Director






02/20/02 Indemnity Agreement           -6-



<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.






                                                By: /s/ Thomas K. Ziegler
                                                    ----------------------------
                                                    Thomas K. Ziegler
                                                    President and
                                                    Chief Executive Officer



                                                By: /s/ Dennis E. Bunday
                                                    ----------------------------
                                                    Dennis E. Bunday,
                                                    Chief Financial Officer








Date:  March 4, 2002








                                       13
<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.






                                                    ----------------------------
                                                    Thomas K. Ziegler
                                                    Presidend and
                                                    Chief Executive Officer




                                                    ----------------------------
                                                    Dennis E. Bunday,
                                                    Chief Financial Officer






Date:  March 4, 2002





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