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


                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



         Date of Report (Date of Earliest Event Reported): June 30, 1998
                                                           -------------


                             WILLIAMS CONTROLS, INC.
                             -----------------------

               (Exact name of Company as specified in its charter)


         Delaware                    0-18083                      84-1099587
         --------                    -------                      ----------
(State or other jurisdiction       (Commission                  (IRS Employer
     of incorporation)              File No.)                Identification No.)


                   14100 S.W. 72ND Avenue, Portland, OR 97224
                   ------------------------------------------
                    (Address of Principal Executive Offices)


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


                                 Not Applicable
         -------------------------------------------------------------- 
         (Former name or former address, if changed since last report.)


                                    

                                      
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Item 5.   Other Events.

     On June 30, 1998, Williams Controls,  Inc. (the "Registrant")  restructured
its credit facility with Wells Fargo Bank,  National  Association to remove Ajay
Sports,  Inc.  and its  subsidiaries  ("Ajay")  as  borrowers  under the  credit
facility.  The credit facility as restructured  provides for a maximum borrowing
capacity of  approximately  $22.3  million,  consisting  of a  revolving  credit
facility of up to $16.5 million, a $3.1 million term loan and a $2.7 real estate
loan. Under the restructured  facility,  all joint and several liability,  cross
collateral  agreements  and  guarantees  of the  Registrant  with respect to the
portion  of the Wells  Fargo  credit  facility  allocable  to Ajay  prior to the
restructuring have been terminated.

     In  connection  with the  restructuring  of the  Wells  Fargo  bank  credit
facility,  the  Registrant  entered into an agreement  with Ajay under which the
Registrant has agreed to make certain additional advances to Ajay of $1 million.
These additional  advances when combined with certain  liabilities  assumed from
Ajay by the  Registrant  and potential  additional  payments to a bank on Ajay's
behalf,  if required to be made, could result in Ajay owing the Registrant up to
approximately  $8.65  million.  On June 30, 1998,  the  Registrant  converted $5
million  of this  debt  into  6,000,000  shares  of a newly  created  series  of
preferred  stock  of  Ajay,  the  Series  D  Cumulative  Convertible  Non-Voting
Preferred  Stock,  and accepted a secured  promissory  note for the  unconverted
portion of the debt.  The note is secured  by a lien on Ajay's  assets  which is
junior to the lien held by Ajay's bank lenders.  The Registrant continues to own
approximately 17.7% of the outstanding common stock of Ajay and holds options to
purchase  an  additional  11.1  million  shares.  In  addition,  the  Registrant
continues to have rights to joint  manufacturing  facilities  in  Wisconsin  and
Mexico, which were negotiated in 1994.

     These transactions are the result of the Registrant's efforts to refocus on
the Registrant's core transportation-related  businesses and follows the sale of
its unprofitable Kenco subsidiary earlier in this fiscal year.

Item 7.  Financial Statements and Exhibits.

         (c) Exhibits

          10.1 First Amendment, dated June 30, 1998, to Credit Agreement entered
               into as of July 11,  1997,  by and among the  Registrant  and its
               subsidiaries and Wells Fargo Bank, National Association.

          10.2 Replacement  Term Loan Promissory Note, dated June 30, 1998, made
               by Registrant payable to Wells Fargo Bank.

          10.3 Agreement,  dated June 30, 1998, by and among the  Registrant and
               Ajay Sports, Inc. and its subsidiaries ("Ajay").

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          10.4 Secured  Promissory Note dated June 30, 1998 made by Ajay payable
               to the Registrant.

          10.5 Certificate of Designations of Rights and Preferences of the Ajay
               Series D Cumulative  Convertible Non-Voting Preferred Stock owned
               by the Registrant.


                                    SIGNATURE

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

                                             WILLIAMS CONTROLS, INC.



Dated: July 15, 1998                         By /s/ Gerard A. Herlihy
                                               --------------------------------
                                               Gerard A. Herlihy, 
                                               Chief Financial Officer and 
                                               Chief Administrative Officer

                                             By /s/ William N. Holmes
                                               --------------------------------
                                               William N. Holmes,
                                               Corporate Controller and
                                               Principal Accounting Officer
                                               



                                            





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