================================================================================
                                 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: March 31, 1999.

                                       OR

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

                      For the transition period from    to
                                                    ---    ---

                         Commission file number 0-18083


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


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

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


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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                   Yes  X    No
                                       ---      ---

The number of shares  outstanding of the  registrant's  common stock as of March
31, 1999: 18,373,064


<PAGE>

                             Williams Controls, Inc.

                                      Index


                                                                           Page
                                                                          Number
                                                                          ------
Part I.  Financial Information

  Item 1.       Financial Statements

                Consolidated Balance Sheets, March 31, 1999 (unaudited)
                   and September 30, 1998                                   1

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

                Unaudited Consolidated Statements of Cash Flows,
                   six months ended March 31, 1999 and 1998                 3

                Notes to Unaudited Consolidated Financial Statements       4-7

  Item 2.       Management's Discussion and Analysis
                   of Financial Condition and Results of Operations        8-13


Part II.  Other Information

  Item 1.      Legal Proceedings                                            14

  Item 2.      Changes in Securities and Use of Proceeds                    14

  Item 3.      Defaults Upon Senior Securities                              14

  Item 4.      Submission of Matters to a Vote of Security Holders          14

  Item 5.      Other Information                                            14

  Item 6.      Exhibits and Reports on Form 8-K                             14

                    Signature Page                                          15








<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> 


                                                                          March 31,              September 30,
                                                                            1999                     1998
                                                                         (unaudited)
                                                                     --------------------    --------------------
                          ASSETS

Current Assets:
   Cash and cash equivalents                                          $         1,290         $         1,281
   Trade and other accounts receivable, less allowance of $328 and
     $325 at March 31, 1999 and September 30, 1998, respectively               11,334                  11,765
   Inventories                                                                 10,004                  10,693
   Deferred taxes and other                                                     2,640                   2,231
   Net assets held for disposition                                              5,411                   5,117
                                                                     --------------------    --------------------
     Total current assets                                                      30,679                  31,087

   Property plant and equipment, net                                           20,820                  20,013
   Investment in and note receivable from affiliate                             5,887                   6,140
   Note receivable                                                                  -                   3,200
   Net assets held for disposition                                              1,829                   1,847
   Other assets                                                                 4,043                   4,072
                                                                     ====================    ====================
     Total assets                                                     $        63,258         $        66,359
                                                                     ====================    ====================

           LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
   Accounts payable                                                   $        4,411          $        4,771
   Accrued expenses                                                            2,733                   3,399
   Current portion of long-term debt and capital leases                        2,111                   1,181
   Estimated loss on disposal                                                  1,824                   2,550
                                                                     --------------------    -------------------
      Total current liabilities                                               11,079                  11,901

Long-term debt and capital lease obligations                                  22,773                  27,846

Other liabilities                                                              2,555                   2,201

Commitments and contingencies

Shareholders' equity:
   Preferred stock ($.01 par value, 50,000,000 authorized; 79,650                                                                 
       and 80,000 issued at March 31, 1999 and September 30, 1998,
       respectively)                                                               1                       1
   Common stock ($.01 par value, 50,000,000 authorized;
       18,503,264 and 18,311,288 issued at March 31,
       1999 and September 30, 1998, respectively)                                185                     183
   Additional paid-in capital                                                 18,147                  17,917
   Retained earnings                                                           9,652                   7,444
   Unearned ESOP shares                                                         (73)                    (73)
   Treasury stock (130,200 shares at March 31, 1999 and 
      September 30, 1998)                                                      (377)                   (377)
   Note receivable                                                             (500)                   (500)
   Pension liability adjustment                                                (184)                   (184)
                                                                     --------------------    -------------------
      Total shareholders' equity                                              26,851                  24,411
                                                                     ====================    ===================
        Total liabilities and shareholders' equity                    $       63,258          $       66,359
                                                                     ====================    ===================

</TABLE>



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


                                       1
<PAGE>
                             Williams Controls, Inc.
                      Consolidated Statements of Operations
         (Dollars in thousands, except share and per share information)
                                   (unaudited)
<TABLE>
<CAPTION>
<S>                                                      <C>                 <C>                <C>                <C>  
 
                                                           Three months       Three months        Six months         Six months
                                                              Ended              Ended               Ended              Ended
                                                             March 31,          March 31,          March 31,          March 31,
                                                               1999               1998               1999               1998
                                                          ---------------    ---------------    --------------     --------------

Sales                                                        $    16,641        $    15,613        $   31,566         $   28,310
Cost of sales                                                     11,780             10,748            22,006             19,573
                                                          ---------------    ---------------    --------------     --------------
Gross margin                                                       4,861              4,865             9,560              8,737

Operating expenses:
  Research and development                                           893                726             1,666              1,284
  Selling                                                            511                488             1,008                976
  Administration                                                     769                989             1,874              1,812
                                                          ---------------    ---------------    --------------     --------------
    Total operating expenses                                       2,173              2,203             4,548              4,072
                                                          ---------------    ---------------    --------------     --------------

Earnings from continuing operations                                2,688              2,662             5,012              4,665

Other (income) expenses:
   Interest income                                                  (97)               (50)             (222)              (101)
   Interest expense                                                  325                380               798                700
   Other expense                                                       -                  9               112                  3
   Equity interest in loss of affiliate                               63                 40               253                398
                                                          ---------------    ---------------    --------------     --------------
     Total other expenses                                            291                379               941              1,000
                                                          ---------------    ---------------    --------------     --------------

Earnings from continuing operations before 
   income tax expense                                              2,397              2,283             4,071              3,665
Income tax expense                                                   920                890             1,563              1,421
                                                          ---------------    ---------------    --------------     --------------

Net earnings from continuing operations                            1,477              1,393             2,508              2,244

Discontinued operations:
   Net loss from operations of automotive 
      accessories segment                                              -              (160)                 -              (160)
   Net loss from operations of the agricultural            
      equipment segment                                                -              (146)                 -              (302)
                                                          ---------------    ---------------    --------------     --------------
   Net loss from discontinued operations                               -              (306)                 -              (462)
                                                          ---------------    ---------------    --------------     --------------

Net earnings                                                       1,477              1,087             2,508              1,782
Dividends on preferred stock                                         150                  -               300                  -
                                                          ---------------    ---------------    --------------     --------------
Net earnings allocable to common shareholders                $     1,327        $     1,087        $    2,208         $    1,782
                                                          ===============    ===============    ==============     ==============

Basic and diluted earnings per common share from
   continuing operations                                     $      0.07        $      0.08        $     0.12         $     0.13 
Basic and diluted loss per common share from
   discontinued operations                                             -              (0.02)                -              (0.03)
                                                          ---------------    ---------------    --------------     --------------
Basic and diluted net earnings per common share              $      0.07        $      0.06        $     0.12         $     0.10
                                                          ===============    ===============    ==============     ==============



</TABLE>

        The accompanying notes are an integral part of these statements.



                                        2


<PAGE>
                                               Williams Controls, Inc.
                                       Consolidated Statements of Cash Flows
                                              (Dollars in thousands)
<TABLE>
<CAPTION>
<S>                                                                   <C>                     <C>                       
                                                                            Six months             Six months
                                                                              Ended                  Ended
                                                                         March 31, 1999          March 31, 1998
                                                                        ------------------      ------------------
Cash flows from operating activities:
  Net earnings                                                                 $   2,508             $     1,782
Adjustments to reconcile net earnings to net cash from continuing
operations:
  Loss from discontinued operations                                                    -                     462
  Depreciation and amortization                                                      898                     552
  Equity interest in loss of affiliate                                               253                     398
Changes in working capital of continuing operations:
  Receivables                                                                        565                  (2,188)
  Inventories                                                                        689                    (864)
  Accounts payable and accrued expenses                                           (1,026)                  1,884
  Other                                                                              (90)                   (545)
                                                                        ------------------      ------------------
Net cash provided by operating activities of continuing operations                 3,797                   1,481

Cash flows from investing activities:
  Payments for property, plant and equipment                                      (1,308)                   (387)
                                                                        ------------------      ------------------
Net cash used in investing activities of continuing operations                    (1,308)                   (387)

Cash flows from financing activities:
  Proceeds (repayments) of long-term debt and capital lease obligations           (3,797)                    765
  Borrowing under term notes                                                       2,500                       -
  Preferred dividends                                                               (300)                      -
  Proceeds from issuance of common stock                                             119                      62
                                                                        ------------------      ------------------
Net cash  provided by (used in) financing activities of continuing            
  operations                                                                      (1,478)                    827

Cash flows from discontinued operations:
  Proceeds from sale of Automotive Accessories segment                                 -                   1,124
  Net cash used in operations                                                     (1,002)                 (2,681)
                                                                        ------------------      ------------------
Net cash used in discontinued operations                                          (1,002)                 (1,557)

Net increase in cash and cash equivalents                                              9                     364
Cash and cash equivalents at beginning of period                                   1,281                     700
                                                                        ==================      ==================
Cash and cash equivalents at end of period                                     $   1,290             $     1,064
                                                                        ==================      ==================

Supplemental disclosure of cash flow information:
  Interest paid                                                                $     737             $       432
  Income taxes paid                                                            $     495             $         -
  Income tax refunds                                                           $     328             $         5
                                                                        ==================      ==================
Supplemental disclosure of non-cash investing and financing activities:

  Note receivable for capital lease obligation                                 $   3,200             $         -
                                                                        ==================      ==================
  Tax benefits related to stock options                                        $     113             $         -
                                                                        ==================      ==================
  Capital lease obligations incurred                                           $     354             $         -
                                                                        ==================      ==================
Disposition of Kenco:
  Net assets and liabilities, sold                                             $       -             $     2,374
  Allowances                                                                           -                   1,376
  Preferred stock                                                                      -                  (2,000)
  Other receivable                                                                     -                    (250)
  Receivable for inventory sold                                                        -                    (430)
  Net gain on disposition                                                              -                      54
                                                                        ------------------      ------------------
  Cash received                                                                $       -             $     1,124
                                                                        ==================      ==================
</TABLE>
        The accompanying notes are an integral part of these statements.
                                        3

<PAGE>

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


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

1.   Organization

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

2.   Interim Consolidated Financial Statements

     The unaudited interim consolidated  financial statements have been prepared
     by the  Company  and, in the opinion of  management,  reflect all  material
     adjustments  which are  necessary  to a fair  statement  of results for the
     interim  periods  presented.   The  interim  results  are  not  necessarily
     indicative  of the results  expected for the entire  fiscal  year.  Certain
     information and footnote  disclosure made in the last annual report on Form
     10-K  have  been   condensed  or  omitted  for  the  interim   consolidated
     statements.  Certain costs are estimated for the full year and allocated to
     interim  periods  based on activity  associated  with the  interim  period.
     Accordingly,  such costs are  subject  to  year-end  adjustment.  It is the
     Company's opinion that, when the interim  consolidated  statements are read
     in conjunction  with the September 30, 1998 annual report on Form 10-K, the
     disclosures are adequate to make the information  presented not misleading.
     The interim  consolidated  financial statements include the accounts of the
     Company and its  subsidiaries.  All significant  intercompany  accounts and
     transactions have been eliminated.

3.   Comprehensive Income (Loss)

     In June 1997,  the  Financial  Accounting  Standards  Board  (FASB)  issued
     Statement  of  Financial   Accounting   Standards  (SFAS)  130,  "Reporting
     Comprehensive  Income", which requires companies to report a measure of all
     changes in equity except those  resulting  from  investments  by owners and
     distributions to owners.  Total comprehensive  income for the three and six
     months ended March 31, 1999 and 1998 was $1,477 and $1,087,  and $2,508 and
     $1,782 respectively,  and consisted solely of net earnings. As of March 31,
     1999,  accumulated  other  comprehensive  loss was $184  and  consisted  of
     pension liability adjustment.

4.   Earnings (loss) per Share

     Effective in its fiscal year ended  September 30, 1998, the Company adopted
     SFAS 128,  "Earnings Per Share".  SFAS 128 prescribes new Basic and Diluted
     Earnings Per Share (EPS) calculations that replace the former  calculations
     for Primary and Fully  Diluted EPS.  Prior  periods  have been  restated to
     conform to the  requirements of SFAS 128. Basic EPS is calculated using the
     weighted  average  number of common shares  outstanding  for the period and
     diluted  EPS is  calculated  using the  weighted  average  number of common
     shares and dilutive common equivalent shares outstanding.

                                       4
<PAGE>
Following  is a  reconciliation  of basic EPS and  diluted  EPS from  continuing
operations:
<TABLE>
<CAPTION>
<S>                                      <C>       <C>        <C>           <C>       <C>          <C>
                                               Three Months Ended                 Three Months Ended
                                                 March 31, 1999                     March 31, 1998
                                         -------------------------------    --------------------------------
                                                                 Per                                Per
                                                                Share                              Share
                                         Income     Shares     Amount       Income     Shares      Amount
                                         ------     ------     ------       ------     ------      ------
         Income from continuing
           operations                    $1,477                             $1,393
         Less-Preferred stock dividends    (150)                                 -
                                         ------                             ------
         Basic EPS-
           Income from  continuing
           operations available to          
           common shareholders            1,327   18,327,711   $ 0.07        1,393    17,874,989   $ 0.08
         Effect of dilutive securities -                       ------                              ------ 
           Stock options and warrants         -      453,278                     -       231,541
           Convertible preferred stock      150    2,903,010                     -             -
           Shares expected to be issued       -            -                     -       400,000
                                         ------   ----------                ------    ----------
         Diluted EPS -
           Income from continuing
           operations available to       
           common shareholders           $1,477   21,683,999   $ 0.07       $1,393    18,506,530   $ 0.08
                                         ======   ==========   ======       ======    ==========   ======

                                                Six Months Ended                   Six Months Ended
                                                 March 31, 1999                     March 31, 1998
                                         -------------------------------    --------------------------------
                                                                 Per                                Per
                                                                Share                              Share
                                         Income     Shares     Amount       Income     Shares      Amount
                                         ------     ------     ------       ------     ------      ------
         Income from continuing
           operations                    $2,508                             $2,244
         Less-Preferred stock dividends    (300)                                 -
                                         ------                             ------
         Basic EPS-
           Income from continuing
           operations available to                        
           common shareholders            2,208   18,288,667   $ 0.12        2,244    17,845,319   $ 0.13
         Effect of dilutive securities -                       ------                              ------
           Stock options and warrants         -      303,365                     -       204,154
           Convertible preferred stock      300    2,899,650                     -             -
           Shares expected to be issued       -            -                     -       400,000
                                         ------   ----------                ------    ----------
         Diluted EPS -
           Income from continuing
           operations available to                      
           common shareholders           $2,508   21,491,682   $ 0.12       $2,244    18,449,473   $ 0.13
                                         ======   ==========   ======       ======    ==========   ======
</TABLE>
     At March 31, 1999 and 1998,  the Company had options and warrants  covering
     893,236 and 1,001,161  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.

5.   Inventories

     Inventories consisted of the following:

                                        March 31,              September 30,
                                          1999                     1998
                                   -------------------     ---------------------
         Raw material                   $   4,794                $    5,152
         Work in process                    2,139                     1,333
         Finished goods                     3,071                     4,208
                                   -------------------     ---------------------
                                        $  10,004                $   10,693
                                   ===================     =====================

     Finished  goods  include  component  parts and finished  product  ready for
     shipment.
                                       5
<PAGE>

6.   Sale Leaseback and Financing

     In April 1997 the Company sold its Portland,  Oregon manufacturing facility
     in a sale-leaseback  transaction for approximately  $4,600. The transaction
     was accounted for as a financing and the capitalized  lease  obligations of
     approximately $4,600 were recorded as long term liabilities. In April 1998,
     under the terms of the agreement,  the Company  provided a mortgage note to
     the  purchaser  in the  amount  of  $3,200  which  was  reported  as a note
     receivable at September 30, 1998. In December 1998,  the Company  exercised
     an option to  repurchase  the  building for $4,700,  consisting  of cash of
     $1,500 and the note receivable of $3,200. Accordingly,  the note receivable
     of $3,200 and the capital lease  obligation of $4,600 have been  eliminated
     from the balance  sheet at March 31, 1999.  The costs  associated  with the
     building  repurchase are reported in other  expenses  during the six months
     ended March 31, 1999.

     The  Company  borrowed  $2,500  from its bank under  amended  term loans to
     finance  the  repurchase  transaction  and for  working  capital  purposes.
     Approximately  $1,222 of the  additional  financing  was borrowed  under an
     amendment to the Company's  existing  Term Loan I which  increased the Term
     Loan  I  balance  to  $4,105.  Term  Loan I is  payable  in  equal  monthly
     installments of $60 with the remaining balance of $2,897 due at maturity on
     July 1, 2001. Approximately $1,278 of the additional financing was provided
     under an amended Term Loan II payable in 18 equal monthly  installments  of
     $71, plus variable interest (8.5% at March 31, 1999).


7.   Reclassifications

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




                                       6
<PAGE>

8.     Segment Information

<TABLE>
<CAPTION>
<S>                                                       <C>                <C>                <C>                <C> 
                                                          Three months         Three months       Six months          Six months
                                                              Ended               Ended             Ended               Ended
                                                            March 31,           March, 31          March 31,          March 31,
                                                              1999                 1998              1999                1998
                                                          --------------     ---------------    ---------------     --------------

Sales by  classes of similar  products  from  continuing
operations
   Vehicle components                                        $  15,928          $   14,530         $   30,225          $  26,227
   Electrical components and GPS                                   713               1,083              1,341              2,083
                                                          --------------     ---------------    ---------------     --------------
                                                                                                                    
                                                             $  16,641          $   15,613         $   31,566          $  28,310
                                                          ==============     ===============    ===============     ==============

Earnings (loss) from continuing operations
   Vehicle components                                        $   3,301          $    3,090         $    6,443          $   5,483
   Electrical components and GPS                                  (613)               (428)            (1,431)              (818)
                                                          --------------     ---------------    ---------------     --------------
                                                             $   2,688          $    2,662         $    5,012          $   4,665
                                                          ==============     ===============    ===============     ==============

Capital expenditures
   Vehicle components                                        $     445          $      191         $    1,100          $     238
   Electrical components and GPS                                   168                  64                208                149
                                                          --------------     ---------------    ---------------     --------------
Total capital expenditures - continuing operations                 613                 255              1,308                387
   Agricultural equipment - discontinued operations                 31                   -                 31                104
                                                          --------------     ---------------    ---------------     --------------
Total capital expenditures                                   $     644          $      255         $    1,339          $     491
                                                          ==============     ===============    ===============     ==============


Depreciation and amortization
   Vehicle components                                        $     400          $      156         $      700          $     387
   Electrical components and GPS                                   114                  85                198                165
                                                          --------------     ---------------    ---------------     --------------
Total   depreciation   and   amortization  -  continuing           514                 241                898                552
operations
   Automotive accessories - discontinued operations                  -                  60                  -                109
   Agricultural equipment - discontinued operations                 88                  82                176                163
                                                          --------------     ---------------    ---------------     --------------
Total depreciation and amortization                          $     602          $      383         $    1,074          $     824
                                                          ==============     ===============    ===============     ==============


Identifiable assets
   Vehicle components                                                                              $   41,791          $  33,105
   Electrical components and GPS                                                                        8,340              8,584
   Corporate                                                                                            5,887              3,795
                                                                                                ---------------     --------------
Total assets - continuing operations                                                                   56,018             45,484
   Agricultural equipment - discontinued operations                                                     7,240              6,958
                                                                                                ---------------     --------------
Total assets                                                                                       $   63,258          $  52,442
                                                                                                ===============     ==============

</TABLE>



The Company has classified the investment in and note receivable from affiliate
     as a corporate asset under identifiable assets. Identifiable assets for
       discontinued segments reflect the net assets held for disposition.




                                       7

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

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

The  Company's   principal   sources  of  liquidity  are  funds  generated  from
operations,  borrowings  under its credit  facilities  and leases for  equipment
purchases from various  leasing  companies.  The Company  anticipates  that cash
generated  from  operations,  bank  borrowings  and leases will be sufficient to
satisfy  working  capital  and  capital  expenditure  requirements  for  current
operations for the next twelve months.  At March 31, 1999, the Company's working
capital  improved to $19,600  compared to $19,186 at September  30, 1998 and the
current  ratio was 2.8  compared to 2.6 at September  30, 1998.  Cash flows from
continuing  operations were $3,797 for the first six months ended March 31, 1999
compared  to $1,481 for the first six months of fiscal  1998.  In the six months
ended March 31, 1999,  increased  earnings and funds provided by lower inventory
and accounts  receivable levels were used to reduce accounts payable and accrued
expenses.  Excluding  proceeds  from  the  sale  of  assets  of  the  Automotive
Accessories segment, the Company's  discontinued  operations used cash of $1,002
and $2,681 for the six months ended March 31, 1999 and 1998, respectively.  Cash
used by discontinued  operations  declined  primarily  because the  discontinued
Automotive  Accessories  segment,  which was  discontinued in 1998, used cash of
$1,396 in the first six months of fiscal 1998.

During the six months ended March 31, 1999 the note receivable  decreased $3,200
and total long term debt and capital  leases  decreased  $4,143 due primarily to
the repurchase of the Portland, Oregon manufacturing facility. In April 1997 the
Company  sold the  facility in a  sale-leaseback  transaction  for  $4,600.  The
transaction  was  accounted  for  as  a  financing  and  the  capitalized  lease
obligations  of $4,600 were  recorded as long term  liabilities.  In April 1998,
under the terms of the  agreement,  the Company  provided a mortgage note to the
purchaser  in the amount of $3,200 which was  reported as a note  receivable  at
September 30, 1998. In December 1998, the Company  exercised a repurchase option
on the property and  repurchased  the building for $4,700  consisting of cash of
$1,500 and the note  receivable of $3,200.  Accordingly,  the note receivable of
$3,200 and the capital lease  obligation of $4,600 have been eliminated from the
balance  sheet at  March  31,  1999.  The  costs  associated  with the  building
repurchase is reported in other  expenses  during the six months ended March 31,
1998.

The Company  borrowed  $2,500 from its bank under  amended term loans to finance
the  repurchase  transaction  and for working  capital  purposes.  Approximately
$1,222 of the  additional  financing  was  borrowed  under an  amendment  to the
Company's  existing  Term  Loan I, the  increased  principal  amount of which is
payable  in equal  monthly  installments  of $60 with the  remaining  balance of
$2,897 due at maturity on July 1, 2001.  Approximately  $1,278 of the additional
financing  was  provided  under an  amended  Term Loan II which is payable in 18
equal monthly  installments  of $71, plus variable  interest  (8.5% at March 31,
1999).

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

Recent FASB Pronouncements - The Financial  Accounting  Standards Board ("FASB")
recently issued SFAS No. 131,  "Disclosures  about Segments of an Enterprise and
Related  Information ("SFAS 131")". This statement is effective for fiscal years
beginning after December 15, 1997. SFAS No. 131 revises  existing  standards for
reporting  information  about  operating  segments and requires the reporting of
selected information in interim financial reports. SFAS No. 131 also establishes
standards for related disclosures about products and services, geographic areas,
and major customers.  Management  believes that  implementation  of SFAS No. 131
(which has not been adopted  with this  quarterly  report)  will not  materially
affect the Company's financial statements.

In June 1998 the FASB issued  Statement of Financial  Accounting  Standards  No.
133, "Accounting for Derivative Instruments and Hedging Activities ("SFAS 133").
SFAS 133  establishes  accounting  and reporting  standards  for all  derivative
instruments.  SFAS 133 is effective  for fiscal years  beginning  after June 15,
1999. The Company does not have any derivative instruments and accordingly,  the
adoption of SFAS 133 will have no impact on the Company's  financial position or
results of operations.

                                       8
<PAGE>

Year 2000 Conversion.  The Company  recognizes the need to ensure its operations
will not be adversely impacted by Year 2000 software failures. Software failures
due to processing errors  potentially  arising from calculations  using the Year
2000  date  are a  known  risk.  The  Company  is  addressing  this  risk to the
availability  and  integrity of  financial  systems and the  reliability  of the
operational  systems.  The Company has established  processes for evaluating and
managing  the  risks  and  costs   associated   with  this  problem,   including
communicating with suppliers,  dealers and others with which it does business to
coordinate Year 2000 conversion. During 1998, the Company began implementing the
installation  of new  financial  software  that is Year 2000  compliant  for the
purpose of improving  operations  and service to its  existing  and  prospective
truck and automotive  customers.  The decision to upgrade the Company's software
was made irrespective of Year 2000 compliance  issues. The system is expected to
be fully operational in the summer of 1999. The Company has contingency plans in
place in the event that the software implementation is delayed.

Since  January  1998 the  Company  has  been  engaged  in  achieving  Year  2000
compliance.  The Company's  Year 2000 project is divided into several phases and
is  progressing  with  corrective  actions for major systems well under way. All
hardware,  software,  services and business  relationships with trading partners
which  could be  affected  by Year 2000  issues are being  audited for Year 2000
compliance.

The Company  relies on computer  systems and  software to operate its  business,
including applications used in sales, purchasing,  inventory management, finance
and various administrative functions. The Company has determined that certain of
its software applications will be unable to interpret appropriately the calendar
Year 2000 and  subsequent  years.  As of March 31,  1999,  80% of the  Company's
systems which may have a material Year 2000  liability are Year 2000  compliant.
The target date for full compliance is September 30, 1999.

The Company's total budget for its Year 2000 project is $150,  approximately $82
of which had been spent  through  March 1999.  The Year 2000  budget  represents
approximately 17 percent of total  information  technology  ("IT")  expenditures
budgeted for the period from October 1998 through  September  1999.  The Company
continues  to manage total IT expenses by  re-prioritizing  or  curtailing  less
critical investments,  incorporating Year 2000 readiness into previously planned
system  enhancements  and by using  existing  staff to  implement  its Year 2000
program.  The Company has hired outside  consultants  for its Year 2000 project,
and it may need to purchase additional hardware or software.

The Company acquires a majority of its inventory from  approximately 22 vendors.
If these vendors have  unresolved Year 2000 issues which affect their ability to
supply  merchandise,  the Company could be adversely  affected.  The Company has
conducted an initial  assessment of vendors whose  potential Year 2000 liability
could  materially  affect  operations.  Based  on this  assessment  the  Company
believes that it is not materially at risk from a Year 2000  liability  posed by
its vendors.  The Company plans to complete a more detailed Year 2000  readiness
survey of its top vendors by August 1999.  In the event that it appears a vendor
will be adversely  affected by Year 2000 issues,  the Company  believes  that it
will be able to find alternative suppliers.

Should the Company not achieve full  compliance  in a timely  manner or complete
its Year 2000 project within its current cost estimates, the Company's business,
financial  condition  and results of  operations  could be  adversely  affected.
However,  in the event that the Company fails to meet the deadlines  above,  the
Company  believes  that the  financial  impact  will not be  material  since all
systems  believed  by the Company to be  critical  are  expected to be Year 2000
compliant.









                                       9
<PAGE>

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

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

Overview
--------

Sales from  continuing  operations  increased  $1,028,  or 7%, to $16,641 in the
second  quarter of fiscal 1999 from $15,613 in the second quarter of fiscal 1998
due to higher unit sales volumes in the Company's Vehicle Components segment.

Earnings  from  continuing  operations  increased  $26,  or 1%, to $2,688 in the
second  quarter of fiscal 1999 from $2,662 in the second quarter of fiscal 1998.
The  increase  was due to increased  earnings of $211 in the  Company's  Vehicle
Components  segment  due to higher  unit sales of  electronic  throttle  and air
controls.  The  increase in earnings  from  electronic  throttle and air control
sales in the Vehicle Components segment was partially offset by increased losses
of $249 at the plastic injection molding facility. In addition, increased losses
of $185 in the  Electrical  Components  and GPS segment,  due primarily to lower
unit sales of  electrical  components  as a result of excess  dealer  inventory,
partially offset increases at the Company's vehicle components segment.

Net earnings from  continuing  operations  increased 6%, or $84 to $1,477 in the
second  quarter of fiscal 1999.  Net earnings  allocable to common  shareholders
were $1,327 in the second quarter of fiscal 1999 compared to $1,087 in the prior
fiscal year due to increased net earnings from continuing  operations  offset by
preferred  dividends of $150 in the second  quarter of fiscal 1999. No preferred
dividends were payable in the second quarter of fiscal 1998. Net earnings in the
second  quarter of fiscal 1998 were  affected by losses of $146 in the Company's
discontinued   Agricultural   Equipment   segment  and  $160  in  the  Company's
discontinued Automotive Accessories segment.

The Company's plastic injection  molding and tooling  subsidiary,  the operating
results of which are  included in the Vehicle  Components  segment,  reported an
increased  loss from  operations  in the second  quarter ended March 31, 1999 of
$249. The 1998 second quarter benefited from a large tooling order which did not
recur  in the 1999  fiscal  second  quarter.  Sales,  gross  margin  (loss)  and
operating  (losses) for the quarter ended March 31, 1999 were $1,377,  ($74) and
($320),  respectively  compared  to $1,464,  $147 and ($71) in the prior  fiscal
period.  The operation  moved to a new facility in the fourth  quarter of fiscal
1998 which has a higher break-even sales level and plant capacity than the prior
facility.  The  operation has not achieved  break-even  sales to date and is not
expected  to  achieve  break-even  results  until at least the first  quarter of
fiscal 2000.

The effective  income tax rate was 38.4% and 39.0% for the quarters  ended March
31, 1999 and 1998, respectively.

Sales
-----

Sales from continuing  operations in the Vehicle  Components  segment  increased
$1,398,  or 10%,  to $15,928 in the second  quarter of fiscal  1999 over  levels
achieved in the second quarter of fiscal 1998 due to higher electronic  throttle
control ("ETC") unit sales.  Sales from  continuing  operations in the Company's
Electrical Components and GPS segments decreased $370, or 34%, due to lower unit
sales of electrical components.

Gross margin 
------------

Gross margin from  continuing  operations was relatively  unchanged at $4,861 in
the second  quarter of fiscal 1999  compared to $4,865 in the second  quarter of
fiscal 1998.  Gross margin increased $178 or 4%, in the second quarter of fiscal
1999 in the Vehicle  Components  segment due to higher unit sales volumes of ETC
products  offset by  reduced  gross  margins  of $221 at the  plastic  injection
molding operation.  Increases in the vehicle components segment were offset by a
decrease in gross margin of $182 in the  Electrical  Components and GPS segment.
Decreased  gross  margin in this  segment  is  attributed  to lower  unit  sales
volumes.  Gross  margins as a percent of sales  decreased to 29.2% in the second
quarter of fiscal 1999  compared  to 31.2% in the second  quarter of fiscal 1998
primarily as a result of lower gross  margins at the plastic  injection  molding
operation and the Electrical Component and GPS segment.


                                       10
<PAGE>
  
Operating expenses
------------------

Operating expenses for continuing  operations decreased $30, or 1%, to $2,173 in
the second  quarter of fiscal 1999  compared to $2,203 in the second  quarter of
fiscal 1998.  Operating  expenses as a percentage  of net sales from  continuing
operations  decreased to 13.1% in the second  quarter of fiscal 1999 compared to
14.1% in the second quarter of fiscal 1998.

Research and development  expenses for continuing  operations increased $167, or
23%,  to $893 during the second  quarter of fiscal 1999  compared to $726 in the
second  quarter  of  fiscal  1998.  As a  percentage  of sales  from  continuing
operations,  research  and  development  expenses  increased  from 4.7% to 5.4%.
Research  and  development  expenses  were  increased  to  support  new  product
development  for existing  customers,  for  development  of the  automotive  ETC
product and for development of sensor-related products.

Administration expenses for continuing operations decreased $220, or 22%, in the
second  quarter of fiscal 1999 to $769 compared to $989 in the second quarter of
fiscal  1998.  Administration  expenses  as a percent of sales  from  continuing
operations  decreased to 4.6% in the second  quarter of fiscal 1999  compared to
6.3% in the  second  quarter  of fiscal  1998.  Administration  costs  decreased
primarily as a result of software  consulting expenses incurred in 1998 that did
not recur in fiscal 1999.  Selling expenses increased $23, or 4.7% in the second
quarter of fiscal 1999 compared to fiscal 1998.  As a percent of sales,  selling
expenses were 3.1% in the second quarter of both fiscal 1998 and 1999.

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

Interest expense  decreased $55, or 15%, to $325 in the second quarter of fiscal
1999 from $380 in the second quarter of fiscal 1998.  Allocated interest expense
included in  discontinued  operations  for the quarters ended March 31, 1999 and
1998 was $107 and $145,  respectively.  Interest income increased $47, or 94% in
the second  quarter of fiscal  1999 due  primarily  to  interest  on a state tax
refund.

Discontinued operations
-----------------------

The  Company  reported a net loss from  discontinued  operations  of $306 in the
second  quarter of fiscal 1998.  The Company  adopted a plan of disposal for the
Agriculture  Equipment  segment in late fiscal 1998,  and a plan of disposal for
the  Automotive  Accessories  segment in the third  quarter of fiscal 1997,  and
accordingly, the estimated future operating losses of the segments were expensed
in the  fourth  quarter  of  fiscal  1998 and  third  quarter  of  fiscal  1997,
respectively.

Net sales from the Agriculture Equipment segment declined $251, or 11% to $2,027
in the second quarter of fiscal 1999 compared to $2,278 in the second quarter of
fiscal  1998.  The  decline in sales was due to lower  unit  sales  attributable
primarily to a poor farm economy.  The loss from  operations for the Agriculture
Equipment  segment increased $149 to $318 due to lower gross margins of $304 and
lower  operating  expenses of $155. The net loss for the  Agriculture  Equipment
segment, net of income tax benefit of $167, increased $122 to $268.

Net loss from the discontinued  Automotive Accessories segment was $160 net of a
tax  benefit of $109 for the second  quarter  ended  March 31,  1998.  Estimated
future losses from discontinued  Automotive  Accessories operations were accrued
in fiscal 1997.  The second quarter  fiscal 1998 loss reflects  additional  loss
incurred on the sale of this business  segment.  Net sales from the discontinued
segment  were  $1,346 and  allocated  interest  expenses  were $84 in the second
quarter of fiscal 1998.

                                       11

<PAGE>

Results of Operations
Six months ended March 31, 1999 compared to the six months ended March 31, 1998

Overview
--------

Sales from continuing operations increased $3,256, or 12%, to $31,566 in the six
months  ended March 31, 1999 from $28,310 in the six months ended March 31, 1998
due to higher unit sales volumes in the  Company's  Vehicle  Components  segment
offset by lower unit sales volumes in the Electrical Components and GPS segment.

Earnings from continuing  operations  increased $347, or 7%, to $5,012 in fiscal
1999 from $4,665 in fiscal 1998. Earnings from continuing  operations  increased
$960 in the  Company's  Vehicle  Components  segment  due to higher  unit sales.
Losses from continuing  operations  increased $613 in the Electrical  Components
and GPS segment  due to lower gross  margins of $406 due to lower unit sales and
to $242 of increased  operating  expenses primarily for research and development
and administration  incurred for sensor  development.  The electrical  component
operations were affected by excess dealer  inventory,  which  contributed to the
decreased unit sales. Net earnings from continuing  operations increased 12%, or
$264 in the six months ended March 31, 1999,  primarily as a result of increased
earnings from continuing operations of $347.

The Company's plastic injection  molding and tooling  subsidiary,  the operating
results of which are  included in the Vehicle  Components  segment,  reported an
increased  loss from  operations in the six months ended March 31, 1999 of $205.
The first six months of 1998  benefited from a large tooling order which did not
recur in the same period in 1999. Sales,  gross margin (loss) and operating loss
for the six  months  ended  March  31,  1999  were  $2,814,  ($12),  and  ($509)
respectively  compared to $2,510, $134 and ($304) in the prior fiscal period. As
noted previously, the operation moved to a new facility in the fourth quarter of
fiscal 1998 which has a higher  break-even  sales level and plant  capacity than
the prior facility.  The operation has not achieved break-even sales to date and
is not expected to achieve  break-even  results until at least the first quarter
of fiscal 2000.

Net  earnings  allocable  to common  shareholders  were $2,208 in the six months
ended  March  31,  1999  compared  to $1,782  in the  prior  fiscal  year due to
increased net earnings from continuing  operations offset by preferred dividends
of $300 in the six months ended March 31,  1999.  No  preferred  dividends  were
payable in the six months ended March 31,  1998.  Net earnings in the six months
ended  March  31,  1998  were  affected  by  losses  of  $302  in the  Company's
discontinued   Agricultural   Equipment   segment  and  $160  in  the  Company's
discontinued Automotive Accessories segment.

The  effective  income  tax rate was 38.4 % and 38.8% for the six  months  ended
March 31, 1999 and 1998, respectively.

Sales
-----

Sales from continuing  operations in the Vehicle  Components  segment  increased
$3,998,  or 15%,  to $30,225 in the six months  ended March 31, 1999 over levels
achieved  in the six months  ended  March 31, 1998 due to higher ETC unit sales.
Sales from continuing  operations in the Company's Electrical Components and GPS
segment  decreased  $742,  or  36%,  due  to  lower  unit  sales  of  electrical
components.

Gross margin
------------

Gross  margin  from  continuing  operations  increased  $823,  or 9%,  to $9,560
compared  to  $8,737  in the six  months  ended  March 31,  1998.  Gross  margin
increased  $1,229 or 15%, in the six months  ended March 31, 1999 in the Vehicle
Components  segment due to higher unit sales volumes of ETC products.  Increases
in this  segment  were  offset  by a  decrease  in gross  margin  of $406 in the
Electrical  Components and GPS segment attributable to lower unit sales volumes.
Gross  margins as a percent of sales  decreased to 30.3% in the six months ended
March 31, 1999 compared to 30.9% in the six months ended March 31, 1998.

                                       12

<PAGE>

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

Operating  expenses  increased  $476,  or 12%, to $4,548 in the six months ended
March 31,  1999  compared  to  $4,072 in the six  months  ended  March 31,  1998
primarily  as a result of  increased  research  and  development  costs of $382.
Operating  expenses as a  percentage  of sales was 14.4% in the six months ended
March 31, 1999 and 1998.  Operating  expenses increased $269, or 10%, in the six
months ended March 31, 1999 in the Vehicle  Components segment and $208, or 16%,
in the Electrical  Components and GPS segment compared to the prior year period.
Research and development  expenses  increased $382, or 30%, to $1,666 during the
six months ended March 31, 1999 compared to $1,284 in the six months ended March
31, 1998. As a percentage of sales,  research and development expenses increased
from 4.5% to 5.3%.  Research and development  expenses were increased to support
new  product  development  for  existing  customers,   for  development  of  the
automotive ETC product and for development of sensor-related products.

Selling  and  administration  expenses  remained  relatively  stable for the six
months ended March 31, 1999 and 1998. Selling and  administration  expenses as a
percent of sales  decreased  to 3.2% and 5.9%,  respectively,  in the six months
ended March 31, 1999 compared to 3.4% and 6.4%,  respectively  in the prior year
period.

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

Interest expense increased $98, or 14% to $798 in the six months ended March 31,
1999  from  $700 in the six  months  ended  March  31,  1998.  Interest  expense
increased primarily because of allocations of interest expense to the Automotive
Accessories discontinued operations in the prior year period. Allocated interest
expense  included in discontinued  operations for the six months ended March 31,
1999  and  1998 was $194 and  $307,  respectively.  Equity  interest  in loss of
affiliate  decreased $145, or 36% to $253 in the six months ended March 31, 1999
from $398 in the six months ended March 31, 1998 due to decreased losses of Ajay
Sports,  Inc.  Interest  income  increased $121, or 120% in the six months ended
March 31, 1999 primarily due to interest on a state tax refund of $85.

Discontinued operations
-----------------------

The Company reported a net loss from discontinued  operations of $462 in the six
months  ended March 31,  1998.  The Company  adopted a plan of disposal  for the
Agriculture Equipment segment in late fiscal 1998 and a plan of disposal for the
Automotive  Accessories  segment  in the  third  quarter  of  fiscal  1997,  and
accordingly,  the  estimated  future  operating  losses of these  segments  were
expensed in the fourth  quarter of fiscal 1998 and third quarter of fiscal 1997,
respectively.

Net sales from the Agriculture Equipment segment declined $721, or 16% to $3,803
in the six months  ended  March 31,  1999  compared  to $4,524 in the six months
ended  March  31,  1998.  The  decline  in  sales  was due to lower  unit  sales
attributable  primarily to a poor farm economy. The loss from operations for the
Agriculture  Equipment  segment increased $600 to $947 as a result of a decrease
in gross margin of $422 and increased  operating  expenses of $178. The net loss
for the  Agriculture  Equipment  segment,  net of income  tax  benefit  of $453,
increased $424 to $726.

Net losses from the discontinued Automotive Accessories segment were $160 net of
tax benefits of $109 for the six months ended March 31, 1998.  Estimated  future
losses from discontinued  operations were accrued in fiscal 1997. The Automotive
Accessories  segment  was sold in the six months  ended March 31,  1998,  and an
additional loss of $160 was incurred on the sale of this business  segment.  Net
sales from the discontinued  segment in the six months ended March 31, 1998 were
$2,928.


                                       13
<PAGE>



                                     Part II

Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities and Use of Proceeds

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         On  February  26,  1999  the  Company   held  its  annual   meeting  of
         stockholders.  The  stockholders  elected two directors and approved an
         amendment  to increase the number of shares  available  for grant under
         the  Company's  1993 Stock  Option  Plan from  3,000,000  to  4,500,000
         shares.

         The  tabulation  of votes cast for the  election of the  directors  and
         amendment to the Company's 1993 Stock Option Plan are as follows:


         Proposal Number One - Election of Directors

                                           For                   Withheld
                                           ---                   --------
         Anthony B. Cashen              18,453,986               431,972
         Charles G. McClure             18,458,641               427,317


         Proposal Number Two - Amendment to the 1993 Stock Option Plan

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

         Increased Shares from           For          Against      Abstentions      Not Voted
           3,000,000 to 4,500,000        ---          -------      -----------      ---------
                                      12,122,341     1,005,867       140,620        5,617,130
</TABLE>


Item 5.  Other Information

         None


Item 6.  Exhibits and Reports on Form 8-K

         (a)   Exhibits
               27 - Financial Data Schedule
         (b)   Reports on Form 8-K
               None


                                       14
<PAGE>


                             Williams Controls, Inc.

                                    Signature


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                      WILLIAMS CONTROLS, INC.





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




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








Date:  May 10, 1999








                                       15
<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:
                                         ---------------------------------------
                                      Gerard A. Herlihy, Chief Financial Officer



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






Date: May 10, 1999














                                       15
<PAGE>