<PAGE>
                       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 June 30, 2003

                                       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: 0-452


                            TECUMSEH PRODUCTS COMPANY
             (Exact name of registrant as specified in its charter)

             MICHIGAN                                  38-1093240
     (State of Incorporation)             (IRS Employer Identification Number)

        100 EAST PATTERSON STREET
           TECUMSEH, MICHIGAN                                49286
(Address of Principal Executive Offices)                   (Zip Code)


              Registrant's telephone number, including area code:
                        Telephone Number: (517) 423-8411


         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 [  ]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).

         Yes [X]  No [  ]

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
                    Class of Stock               Outstanding at July 31, 2003
    ----------------------------------------------------------------------------
<S>                                              <C>
         Class B Common Stock, $1.00 par value             5,077,746
         Class A Common Stock, $1.00 par value            13,401,938
</TABLE>
<PAGE>
                               TABLE OF CONTENTS

                                                                           Page

Part I. Financial Information
   Item 1. Financial Statements
     Consolidated Condensed Balance Sheets                                  2
     Consolidated Condensed Statements of Income                            3
     Consolidated Condensed Statements of Cash Flows                        4
     Notes to Consolidated Financial Statements                             5
   Item 2. Management's Discussion and Analysis of
               Financial Condition and Results of Operations               11
               Cautionary Statements Relating to Forward-Looking
                   Statements                                              17
   Item 3. Quantitative and Qualitative Disclosures About
               Market Risk                                                 19
   Item 4. Controls and Procedures                                         20
Part II. Other Information                                                 21
   Item 6. Exhibits and Reports on Form 8-K.                               21
Signatures                                                                 22
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 1
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
   (Dollars in millions, except par value)                                   JUNE 30,     December 31,
ASSETS                                                                         2003           2002
                                                                            ----------    ------------

<S>                                                                         <C>           <C>
Current Assets:
   Cash and cash equivalents                                                $    265.6    $    333.1
   Accounts receivable, less allowance for doubtful accounts of $8.6 in
     2003 and $9.2 in 2002                                                       282.6         242.4
   Inventories                                                                   332.2         304.0
   Deferred and recoverable income taxes                                          84.0          51.4
   Other current assets                                                           34.0          24.2
                                                                            ----------    ------------
         Total current assets                                                    998.4         955.1

Property, plant, and equipment, net of accumulated depreciation of
 $738.8 in 2003 and $690.6 in 2002                                               561.6         570.5
Goodwill and other intangibles                                                   352.5         329.1
Deferred income taxes                                                             12.7          32.2
Prepaid pension expense                                                          171.4         162.8
Other assets                                                                      53.9          13.3
                                                                            ----------    ------------
         Total assets                                                       $  2,150.5    $  2,063.0
                                                                            ==========    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable, trade                                                  $    194.6    $    172.6
   Income taxes payable                                                           17.4           8.6
   Short-term borrowings                                                          40.4         112.6
   Accrued liabilities                                                           203.0         157.6
                                                                            ----------    ------------
         Total current liabilities                                               455.4         451.4

Long-term debt                                                                   346.3         298.2
Deferred income taxes                                                             31.6          33.6
Other postretirement benefit liabilities                                         220.1         217.3
Product warranty and self-insured risks                                           19.5          21.3
Accrual for environmental matters                                                 40.1          29.5
Pension liabilities                                                               36.9          32.8
                                                                            ----------    ------------
         Total liabilities                                                     1,149.9       1,084.1
                                                                            ----------    ------------

Stockholders' Equity:
   Class A common stock, $1 par value; authorized 75,000,000 shares;
     issued and outstanding 13,401,938 shares in 2003 and 2002                    13.4          13.4
   Class B common stock, $1 par value; authorized 25,000,000 shares;
     issued and outstanding 5,077,746 shares in 2003 and 2002                      5.1           5.1
   Retained earnings                                                           1,063.1       1,078.9
   Accumulated other comprehensive loss                                          (81.0)       (118.5)
                                                                            ----------    ------------
         Total stockholders' equity                                            1,000.6         978.9
                                                                            ----------    ------------
         Total liabilities and stockholders' equity                         $  2,150.5    $  2,063.0
                                                                            ==========    ============
</TABLE>

The accompanying notes are an integral part of these Consolidated
Condensed Financial Statements.






                                                                          Page 2
<PAGE>

                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 1
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)


<TABLE>
<CAPTION>
      (Dollars in millions, except per share data)                        THREE MONTHS ENDED                SIX MONTHS ENDED
                                                                               JUNE 30,                         JUNE 30,
                                                                          2003            2002            2003            2002
                                                                        -------         -------         -------         -------

<S>                                                                     <C>             <C>             <C>             <C>
  Net Sales                                                             $ 482.3         $ 395.3         $ 956.2         $ 728.7
     Cost of sales and operating expenses                                 418.1           328.9           833.0           621.0
     Selling and administrative expenses                                   44.9            31.9            86.1            59.5
     Restructuring charges and other items                                 28.5           ---              42.1             4.5
                                                                        -------         -------         -------         -------
  Operating Income (Loss)                                                  (9.2)           34.5            (5.0)           43.7
     Interest expense                                                      (6.2)           (1.2)          (11.5)           (2.1)
     Interest income and other, net                                         5.2             3.0            10.1             5.8
                                                                        -------         -------         -------         -------
  Income (Loss) before taxes and cumulative effect of accounting
   change                                                                 (10.2)           36.3            (6.4)           47.4
     Income tax expense (credit)                                           (3.7)           12.9            (2.3)           16.8
                                                                        -------         -------         -------         -------
  Income (Loss) before cumulative effect of accounting change              (6.5)           23.4            (4.1)           30.6
  Cumulative effect of accounting change for goodwill, net of tax         ---             ---             ---              (3.1)
                                                                        -------         -------         -------         -------
  Net Income (Loss)                                                     $  (6.5)        $  23.4         $  (4.1)        $  27.5
                                                                        =======         =======         =======         =======

  Basic and diluted earnings (loss) per share:
     Income (Loss) before cumulative effect of accounting change        $ (0.35)        $  1.27         $ (0.22)        $  1.66
     Cumulative effect of accounting change for goodwill                  ---             ---             ---              (.17)
                                                                        -------         -------         -------         -------
     Net Income (Loss)                                                  $ (0.35)        $  1.27         $ (0.22)        $  1.49

-------------------------------------------------------------------------------------------------------------------------------

  Weighted Average Shares (in thousands)                                 18,480          18,480          18,480          18,480
                                                                        =======         =======         =======         =======

  Cash Dividends Declared Per Share                                     $  0.32         $  0.32         $  0.64         $  0.64
                                                                        =======         =======         =======         =======

</TABLE>

The accompanying notes are an integral part of these Consolidated Condensed
Financial Statements.


                                                                          Page 3
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 1
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
        (Dollars in millions)                                                         SIX MONTHS ENDED
                                                                                          JUNE 30,
                                                                                      2003        2002
                                                                                    --------    --------
<S>                                                                                 <C>         <C>
Cash Flows from Operating Activities:
   Income (Loss) before cumulative effect of accounting change                      $   (4.1)   $   30.6
   Adjustments to reconcile income (loss) before cumulative effect of
    accounting change to net cash provided by
    (used in) operating activities:
      Depreciation and amortization                                                     46.2        32.6
      Non-cash restructuring charges and other items                                    26.6         4.5
      Accounts receivable                                                              (30.4)      (35.6)
      Inventories                                                                      (12.3)      ---
      Payables and accrued expenses                                                     22.7        51.0
      Prepaid pension expense                                                           (8.6)      (14.4)
      Deferred and recoverable taxes                                                   (14.4)        7.8
      Net effect of environmental payment                                              (25.6)      ---
      Other                                                                            (13.9)       (8.2)
                                                                                    --------    --------
                  Cash Provided By (Used In) Operating Activities                      (13.8)       68.3
                                                                                    --------    --------

Cash Flows from Investing Activities:
   Business acquisition, net of cash acquired                                           10.6        (4.0)
   Capital expenditures                                                                (31.6)      (35.0)
                                                                                    --------    --------
                  Cash Used In Investing Activities                                    (21.0)      (39.0)
                                                                                    --------    --------

Cash Flows from Financing Activities:
   Dividends paid                                                                      (11.8)      (11.8)
   Decrease in borrowings, net                                                         (34.0)       (3.4)
                                                                                    --------    --------
                  Cash Used In Financing Activities                                    (45.8)      (15.2)
                                                                                    --------    --------

Effect of Exchange Rate Changes on Cash                                                 13.1         3.7
                                                                                    --------    --------

Increase (Decrease) In Cash and Cash Equivalents                                       (67.5)       17.8

Cash and Cash Equivalents:
                  Beginning of Period                                                  333.1       317.6
                                                                                    --------    --------
                  End of Period                                                     $  265.6    $  335.4
                                                                                    ========    ========
</TABLE>

The accompanying notes are an integral part of these Consolidated Condensed
Financial Statements.


                                                                          Page 4
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 1
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


1.    The condensed consolidated financial statements of Tecumseh Products
      Company and Subsidiaries (the "Company") are unaudited and reflect all
      adjustments (including normal recurring adjustments) which are, in the
      opinion of management, necessary for a fair presentation of the financial
      position and operating results for the interim periods. The December 31,
      2002 condensed balance sheet data was derived from audited financial
      statements, but does not include all disclosures required by generally
      accepted accounting principles. The condensed consolidated financial
      statements should be read in conjunction with the consolidated financial
      statements and notes thereto contained in the Company's Annual Report for
      the fiscal year ended December 31, 2002. Due to the seasonal nature of the
      Company's business, the results of operations for the interim period are
      not necessarily indicative of the results for the entire fiscal year.

2.    Inventories consisted of:

<TABLE>
<CAPTION>
                                                    JUNE 30,      December 31,
         (Dollars in millions)                        2003           2002
--------------------------------------------------------------------------------
<S>                                                  <C>             <C>
         Raw material and work in process            $168.8          $164.3
         Finished goods                               148.9           123.5
         Supplies                                      14.5            16.2
--------------------------------------------------------------------------------
         Total Inventories                           $332.2          $304.0
================================================================================
</TABLE>

3.    In an effort to more effectively compete in a business environment plagued
      by worldwide production over-capacity and low cost foreign-sourced
      product, the Company has undertaken a number of strategic initiatives
      designed to reduce production costs and improve overall productivity and
      product quality by consolidating and relocating production capabilities,
      both domestically and internationally.

      As a result of these initiatives, the Company recorded a $28.5 million
      restructuring and impairment charge ($18.2 million net of tax or $0.99 per
      share), during the second quarter of 2003 related to the Engine & Power
      Train business consolidation and related plant closings. The restructuring
      includes the closure of the Company's Douglas, Georgia and Sheboygan
      Falls, Wisconsin production facilities, and the relocation of certain
      production capacities to the new Curitiba, Brazil facility and other
      existing U.S. locations. The closings affect approximately 550 and 250
      people at the Douglas and Sheboygan Falls facilities, respectively. The
      charge, which has been recognized in accordance with SFAS No. 144
      "Accounting for the Impairment or Disposal of Long-Lived Assets" and SFAS
      No. 146 "Accounting for Costs Associated with Exit or Disposal
      Activities," includes approximately $6.8 million in earned severance and
      future benefit costs relating to manpower reductions, $2.0 million in
      plant closing and exit costs incurred through June 30, 2003, and $19.7
      million in asset impairment charges for idled equipment and facilities.
      The amount of severance and future benefit costs mentioned above includes
      $0.8 million in curtailment losses related to the pension plan at the
      Sheboygan Falls, Wisconsin facility.



                                                                          Page 5
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 1
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

      Under SFAS No. 146, severance payments that require future service to be
      received is accrued as earned and other costs are only recognized to the
      extent a liability has been incurred. Accordingly, under the restructuring
      plan, the Company expects to recognize additional plant closing and exit
      costs of $3.4 million, and a curtailment gain of $4.4 million related to
      other post-employment benefits at the Sheboygan Falls, Wisconsin facility
      in the third, and possibly, fourth quarters of 2003.

      As of June 30, 2003, manufacturing operations at the Douglas, Georgia
      facility had ceased and approximately 90% of the employees had been
      dismissed. Through June 30, 2003 the Company had paid approximately
      $0.3 million in severance costs and $1.6 million in closing and exit
      costs related to the Engine & Power Train business restructuring action.

      During the first quarter of 2002, a restructuring charge of $4.5 million
      ($2.8 million or $0.15 per share, net of tax) was taken in connection with
      the relocation of the production of additional rotary compressor product
      lines to Brazil from the United States and consists of the write-off of
      certain equipment which cannot be used in Brazil.

4.    The following table reports the Company's comprehensive income:


<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED       SIX MONTHS ENDED
         COMPREHENSIVE INCOME                                  JUNE 30,                JUNE 30,
         (Dollars in millions)                            2003          2002       2003         2002
-------------------------------------------------------------------------------------------------------
<S>                                                       <C>          <C>         <C>         <C>
         Net Income (Loss)                                $(6.5)       $23.4       $(4.1)      $27.5
         Other comprehensive income (loss):
            Foreign currency translation adjustments       27.0         (4.7)       37.6        (7.7)
            Minimum pension liability                      (0.1)        ---         (0.1)       ---
-------------------------------------------------------------------------------------------------------
         Total Comprehensive Income                       $20.4        $18.7       $33.4       $19.8
=======================================================================================================
</TABLE>

5.    The Company has been named by the U.S. Environmental Protection Agency
      ("EPA") as a potentially responsible party ("PRP") in connection with the
      Sheboygan River and Harbor Superfund Site in Wisconsin. In May 2000, the
      EPA issued a Record of Decision ("ROD") selecting the remedy for the Site.
      The Company is one of several named PRP's in the proposed cleanup action.
      The EPA has estimated the cost of cleanup at $40.9 million. Additionally,
      the Wisconsin Department of Natural Resources ("WDNR"), as a Natural
      Resource Trustee, is investigating what additional requirements, if any,
      the state may have beyond those specified under the ROD.

      The EPA has indicated its intent to address the Site in two phases, with
      the plant site and upper river constituting the first phase ("Phase I")
      and the middle and lower river and harbor being the second phase ("Phase
      II"). In March 2003, the Company entered into a Consent Decree concerning
      the performance of remedial design and remedial action for Phase I. This
      Consent Decree is awaiting final approval by the U.S. Department of
      Justice. Negotiation of a Consent Decree regarding Phase II has yet to
      commence.

      On March 25, 2003, with the cooperation of the EPA, the Company and
      Pollution Risk Services, LLC ("PRS") entered into a Liability Transfer and
      Assumption Agreement (the "Agreement"). Under the terms of the Agreement,
      PRS assumed all of the Company's responsibilities, obligations and
      liabilities for remediation of the entire Site and the associated costs,
      except for certain specifically enumerated liabilities. Also, as required
      by the Agreement, PRS has purchased Remediation Cost Cap insurance in the
      amount of


                                                                          Page 6
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 1
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

      $100,000,000 and Environmental Site Liability insurance in the amount of
      $20,000,000. The Company believes such insurance coverage will provide
      additional assurance for completion of the responsibilities, obligations
      and liabilities assumed by PRS under the Agreement.

      The cost of the liability transfer arrangement to the Company was $39.2
      million. The Company recognized a nonrecurring charge of $13.6 million
      ($8.7 million net of tax) in the first quarter. The charge consists of
      the difference between the cost of the arrangement and amounts previously
      accrued for the cleanup. The Company continues to maintain a reserve of
      $0.5 million to reflect its potential environmental liability arising from
      operations at the Site, including potential liabilities not assumed by
      PRS pursuant to the arrangement.

      It is the intent of the Company, PRS and the EPA to negotiate provisions
      that would add PRS as a PRP by amendment to the Consent Decree, which
      requires the approval of the U.S. Department of Justice. Until such
      approval is received, Generally Accepted Accounting Principles require
      that the Company continue to record the full amount of the estimated
      remediation liability of $39.7 million and a corresponding asset of $39.2
      million included in Other Assets in the balance sheet. While the Company
      believes the arrangements with PRS are sufficient to satisfy substantially
      all of the Company's environmental responsibilities with respect to the
      Site, these arrangements do not constitute a discharge or release of the
      Company's liabilities with respect to the Site. The actual cost of this
      obligation will be governed by numerous factors including the requirements
      of the WDNR, and may be greater or lower than the amount accrued.

      With respect to other environmental matters, the Company, in cooperation
      with the WDNR, conducted an investigation of soil and groundwater
      contamination at the Company's Grafton, Wisconsin plant. It was determined
      that contamination from petroleum and degreasing products used at the
      plant are contributing to an off-site groundwater plume. The Company began
      remediation of soils in 2001 on the east side of the facility. Additional
      remediation of soils began in the fall of 2002 in two other areas on the
      plant site. While the Company has provided for estimated investigation and
      on-site remediation costs, the extent and timing of future off-site
      remediation requirements, if any, are not presently determinable.

      The WDNR requested that the Company join it in a cooperative effort to
      investigate and clean up PCB contamination in the watershed of the south
      branch of the Manitowoc River, downstream of the Company's New Holstein,
      Wisconsin facility. Despite the fact that the WDNR's investigation does
      not establish the parties responsible for the PCB contamination, the WDNR
      has indicated that it believes the Company is a source and that it expects
      the Company to participate in the cleanup. The Company has participated in
      the first phase of a cooperative cleanup, consisting of joint funding of
      the removal of soils and sediments in the source area near its facility.
      The next phase of the cooperative effort is scheduled to occur in 2003
      involving a segment downstream of the source area. The Company has
      provided for these costs. Although participation in a cooperative remedial
      effort after 2003 for the balance of the watershed is under consideration,
      it is not possible to reasonably estimate the cost of any such
      participation at this time.


                                                                          Page 7
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 1
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

      In addition to the above mentioned sites, the Company is also currently
      participating with the EPA and various state agencies at certain other
      sites to determine the nature and extent of any remedial action which may
      be necessary with regard to such other sites. At June 30, 2003 and
      December 31, 2002, the Company had accrued $46.8 million and $36.3
      million, respectively, for environmental remediation, including the
      amounts noted above relating to the Sheboygan River and Harbor Superfund
      Site. As these matters continue toward final resolution, amounts in excess
      of those already provided may be necessary to discharge the Company from
      its obligations for these sites. Such amounts, depending on their amount
      and timing, could be material to reported net income in the particular
      quarter or period which they are recorded. In addition, the ultimate
      resolution of these matters, either individually or in the aggregate,
      could be material to the consolidated financial statements.

6.    The Company is also the subject of, or a party to, a number of other
      pending or threatened legal actions involving a variety of matters
      incidental to its business. Although the ultimate outcome of these matters
      cannot be predicted with certainty, and some may be disposed of
      unfavorably to the Company, management has no reason to believe that their
      disposition will have a materially adverse effect on the consolidated
      financial position or results of operations of the Company.




                                                                          Page 8
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 1
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

7.    The Company has four reportable segments based on the criteria set forth
      in Statement of Financial Accounting Standards (SFAS) No. 131 "Disclosures
      about Segments of an Enterprise and Related Information": Compressor
      Products, Electrical Component Products, Engine & Power Train Products,
      and Pump Products. With the acquisition of the FASCO Motors Group
      ("FASCO") on December 30, 2002, the Company created the Electrical
      Component Products operating segment. In addition to FASCO, the segment
      includes certain North American electrical component manufacturing that
      was previously reported in the Compressor Business. Prior year business
      segment data has been reclassified to conform to the Company's current
      presentation. Revenues and operating income by segment for the periods
      indicated are as follows:

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED        SIX MONTHS ENDED
      BUSINESS SEGMENT DATA                                JUNE 30,                  JUNE 30,
      (Dollars in millions)                          2003        2002          2003        2002
-------------------------------------------------------------------------------------------------------
<S>                                                   <C>           <C>         <C>           <C>
      NET SALES:
         Compressor Products                          $223.1        $241.0      $426.8        $433.1
         Electrical Component Products (a)             106.5           2.0       214.3           3.5
         Engine & Power Train Products                 113.6         111.3       243.9         222.8
         Pump Products                                  39.0          40.7        70.9          69.0
         Other (b)                                       0.1           0.3         0.3           0.3
-------------------------------------------------------------------------------------------------------
                Total Net Sales                       $482.3        $395.3      $956.2        $728.7
=======================================================================================================

      OPERATING INCOME:
         Compressor Products                           $19.5         $28.1       $40.4        $ 43.1
         Electrical Component Products                   5.7           0.7         7.6           0.6
         Engine & Power Train Products                  (6.7)          2.1       (10.4)         (0.2)
         Pump Products                                   4.9           6.2         8.4           9.1
         Other (b)                                      (1.1)         (0.4)       (2.1)         (0.4)
         Corporate expenses                             (3.0)         (2.2)       (6.8)         (4.0)
         Restructuring charges and other items         (28.5)        ---         (42.1)         (4.5)
-------------------------------------------------------------------------------------------------------
                Total Operating Income (Loss)           (9.2)         34.5        (5.0)         43.7
         Interest expense                               (6.2)         (1.2)      (11.5)         (2.1)
         Interest income and other, net                  5.2           3.0        10.1           5.8
-------------------------------------------------------------------------------------------------------
      INCOME (LOSS) BEFORE TAXES AND CUMULATIVE
        EFFECT OF CHANGE IN ACCOUNTING                $(10.2)        $36.3       $(6.4)        $47.4
=======================================================================================================
</TABLE>

       (a) Electrical Component Products also has inter-segment sales. Such
           sales were $35.0 million and $21.8 million for the six and three
           month periods ended June 30, 2003, respectively, and $33.9 million
           and $17.9 million for the six and three month periods ended June 30,
           2002, respectively

       (b) "Other" consists of non-reportable business segments, primarily MDSI.


8.    The cumulative effect from an accounting change of $4.8 million ($3.1
      million net of tax) recorded in the first quarter of 2002, resulted from
      the Company adopting Statement of Financial Accounting Standards (SFAS)
      No. 142 "Goodwill and Other Intangible Assets"


                                                                          Page 9
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 1
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

      effective January 1, 2002. Under SFAS No. 142, goodwill is no longer
      amortized, but is subject to impairment testing on at least an annual
      basis. As required by SFAS No. 142, the Company tested for impairment at
      the date of adoption and found that the goodwill associated with the
      Engine & Power Train European operations had been impaired.

9.    On March 5, 2003, the Company completed a private placement of $300
      million Senior Guaranteed Notes due March 5, 2011. These notes bear
      interest at a fixed rate of 4.66%. Proceeds from the private placement
      were used to repay a $250 million bridge loan and pay down borrowings
      under the Company's revolving credit facility. On March 31, 2003, the
      remaining $25 million outstanding under the revolver was repaid from
      available cash resources.

10.   On December 30, 2002, the Company acquired FASCO from Invensys Plc for
      cash of $396.6 million and the assumption of approximately $14.5 million
      in debt. During the second quarter of 2003, the Company received $14.1
      million in cash for purchase price adjustments relating to working capital
      and employee benefit related items. These proceeds are reflected in the
      Statement of Cash Flows under "Business acquisition, net of cash
      acquired."

      Also during the quarter, the Company completed formal tangible and
      intangible asset valuations for FASCO. Adjustments to preliminary amounts
      recorded in purchase accounting are reflected in the June 30, 2003 balance
      sheet. The effect of these adjustments decreased net property, plant and
      equipment by $35.2 million, increased definite-lived intangibles subject
      to amortization by $31.6 million, and increased goodwill and
      indefinite-lived intangibles by $3.6 million.

      The changes in intangible assets were as follows:


<Table>
<Caption>
                                        Preliminary
                                          Values
                                        Estimated at
                                          Time of         Revised
                                        Acquisition        Values       Estimated Life
<S>                                     <C>               <C>           <C>
Definite-lived Intangibles:
  Non-Compete Agreement                    $ 15.0          $ 15.0            2 years
  Customer Relationships and Contracts       20.0            39.3          6-15 years
  Technology                                  --             12.3          3-10 years

Indefinite-lived Intangibles:
  Trade Name                                 20.0            16.9
                                          -------------------------
                                           $ 55.0          $ 83.5
                                          =========================
</Table>

11.   A portion of export accounts receivable at the Company's Brazilian
      subsidiary are sold with recourse. Brazilian export receivables sold at
      June 30, 2003 and December 31, 2002 were $64.2 million and $41.2 million,
      respectively. The Company estimates the fair value of the contingent
      liability related to these receivables to be $0.1 million, which is
      included in operating income and allowance for doubtful accounts.

      A provision for estimated future warranty costs and estimated returns for
      credit relating to warranty are recorded when products are sold and
      revenue recognized. A reconciliation of the changes in the Company's
      product warranty liability follows:

<TABLE>
<CAPTION>
           (Dollars in millions)                                Six Months Ended
                                                                 June 30, 2003
                                                                 -------------
<S>                                                             <C>
           Balance at January 1, 2003                                $30,542
                 Accruals for warranties                               9,340
                 Settlements made (in cash or in kind)                (7,573)
                 Effect of foreign currency translation                  421
                                                                     -------
           Balance at June 30, 2003                                  $32,730
                                                                     =======
</TABLE>



                                                                         Page 10
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 2
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Consolidated net sales for the second quarter of 2003 were $482.3 million,
compared to $395.3 million in the second quarter of 2002. Consolidated net sales
for the six months ended June 30, 2003 amounted to $956.2 million compared to
$728.7 million in the first half of 2002. The net increase of $227.5 million for
the first half of the year is attributable to FASCO sales of $209.3 million, and
higher sales in the Engine & Power Train segment offset by a decline in the
Compressor segment.

Consolidated net loss for the second quarter of 2003 amounted to $6.5 million or
$0.35 per share compared to net income of $23.4 million or $1.27 per share in
the second quarter of 2002. Consolidated net loss for the six months ended June
30, 2003 amounted to $4.1 million or $0.22 per share compared to net income of
$27.5 million or $1.49 per share for the same period in 2002. Included in the
2003 first half results are restructuring and impairment charges and other items
of $28.5 million ($18.2 million net of tax or $0.99 per share) related to the
consolidation of operations in the Engine & Power Train business and related
closings and $13.6 million ($8.7 million net of tax or $0.47 per share) related
to environmental costs at the Company's Sheboygan Falls, Wisconsin facility.
First half 2003 operating results were also reduced by $4.2 million ($2.7
million net of tax or $0.15 per share) due to the expensing of inventory
write-ups recorded as part of purchase accounting for the FASCO acquisition.
Under U.S. Generally Accepted Accounting Principles, inventory acquired in a
purchase transaction is required to be written up to "fair value" from cost then
recognized in cost of sales as the inventory is sold. This one time event
occurring during the first quarter of 2003 will not impact future results.
Included in the 2002 first half results are restructuring charges of $4.5
million ($2.8 million net of tax or $0.15 per share) related to the relocation
of certain compressor manufacturing operations from the United States to Brazil
and the cumulative effect of an accounting change for goodwill ($3.1 million net
of tax or $0.17 per share) related to the adoption of Statement of Financial
Accounting Standards (SFAS) No. 142 "Goodwill and Other Intangible Assets".

Exclusive of restructuring, impairment and other one-time charges, second
quarter results were lower than the prior year due to: weaker results in all of
the Company's business segments, the unfavorable impact of a weak U.S. dollar,
interest charges on the Company's acquisition related debt, and increased
corporate spending primarily related to the integration of FASCO.

Compressor Products

Second quarter 2003 sales in the Company's Compressor business decreased to
$223.1 million from $241.0 million in the second quarter of 2002. This decrease
was primarily attributable to a 62% decline in U.S. export sales of compressors
used for air conditioning due to the effects of the war in Iraq, and the
increase in sourcing from Asian manufacturers. In addition, the cool, wet spring
resulted in aftermarket sales in the U.S. falling behind last year by 9%. These
declines were partially offset by gains in sales of compressors used in
refrigeration applications as the Company's Brazilian and Indian operations grow
their respective market share. Compressor


                                                                         Page 11
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 2
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

business sales in the first six months of 2003 declined $6.3 million, or
approximately 1.5%, from the first six months of 2002. Sales trends for the
first half of 2003 were consistent with the most recent quarter.

Compressor business operating income for the second quarter of 2003 amounted to
$19.5 million compared to $28.1 million in the second quarter of 2002. Operating
income for the six months ended June 30, 2003 amounted to $40.4 million compared
to $43.1 million for the first six months of 2002. The decrease in operating
income for the second quarter of 2003 versus the comparable 2002 quarter
reflects several factors including lower sales volumes in key segments,
unfavorable foreign currency movements, and lower product margins. The decline
in U.S. export and aftermarket volumes reduced the profitability of the
segment's U.S. operations. Domestic volumes in Brazil were also lower due to a
worsening of the local economy as interest rates remained high to control
inflation. The strengthening of the Brazilian Real against the U.S. Dollar
resulted in remeasurement losses on U.S. Dollar denominated receivables,
particularly early in the quarter when the Real strengthened rapidly, versus
remeasurement gains in the second quarter of 2002 when the Brazilian Real was
weakening in anticipation of Brazilian elections. The weak U.S. Dollar also
narrowed margins on U.S. Dollar denominated sales sourced from other foreign
operations. Lastly, margins also narrowed as a result of unfavorable product
mix, material cost increases in some locations, and lower average sales prices
in certain product categories. The decline in profitability experienced in the
second quarter 2003 compared to the same period in 2002, is in contrast to the
improvement experienced in the first quarter of 2003 where volumes were up over
the prior year first quarter and the effects of cost reduction efforts produced
positive results. As a result of these two contrasting quarters, the Compressor
business' operating results for the first half of 2003 were down 6.3% in
comparison to the same period in 2002.

Results from the Company's Brazilian compressor operations for the second
quarter of 2003 declined from the comparable prior year period, reflecting a
shift in mix to lower priced compressors, increased material and operating
costs, lower domestic volumes, and the foreign currency effects noted above.
Despite these declines, Brazilian operations remain a key to future
competitiveness, and for the three and six month periods ended June 30, 2003
represented 47% and 57% of operating income for the Compressor business compared
to 35% and 41%, respectively for the comparable periods in 2002.

Operations in India continued their positive trend, contributing 17% and 14% of
the Compressor business' operating income for the second quarter and six month
2003 periods, respectively. Increases in both domestic and export volumes were
responsible for the improvement in Indian operations.

Electrical Component Products

With the acquisition of FASCO, the Company has created a new operating segment.
In addition to FASCO, the segment includes certain North American electrical
component manufacturing that was previously reported in the Compressor business.
Prior year business segment data, as


                                                                         Page 12
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 2
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

presented in the table titled "Results by Business Segments (Unaudited)," has
been reclassified to conform to the Company's current presentations.

Electrical Components sales were $106.5 million in the second quarter of 2003,
including $104.0 million of sales from FASCO, compared to $2.0 million in the
second quarter of 2002. Year-to-date sales amounted to $214.3 million, including
$209.3 million of sales from FASCO, compared to $3.5 million in the first half
of 2002.

Segment operating profit for the quarter was $5.7 million compared to
$0.7 million in 2002. FASCO contributed $6.6 million in operating profit to the
second quarter of 2003. Segment operating profit for the first half of the year
was $7.6 million compared to $0.6 million for the same period in 2003. FASCO
contributed $9.7 million in operating profit to the first half of 2003. During
the first quarter of 2003, FASCO's results were reduced by $4.2 million ($2.7
million net of tax or $0.15 per share) for inventory adjustments required by
purchase accounting rules.

Engine & Power Train Products

Engine & Power Train business sales amounted to $113.6 million in the second
quarter of 2003 compared to $111.3 million in the second quarter of 2002. Sales
in the first half of 2003 were $243.9 million compared to $222.8 million in the
first half of 2002. The slight improvement in sales for the second quarter
reflects a favorable mix of product versus the prior year quarter and the
effects on translation of a weaker U.S. dollar. Engine unit deliveries were
actually lower during the quarter by 5% and 15% in the U.S. and Europe,
respectively, when compared to the same period in 2002. Sales for the first half
of the year reflect overall higher U.S. shipment volumes experienced during the
first quarter of 2003. However, these sales were predominantly in lower margin
engines used for walk behind rotary mowers.

Exclusive of restructuring and impairment charges, the Engine & Power Train
business incurred an operating loss of $6.7 million in the second quarter of
2003 compared to an operating profit of $2.1 million in the second quarter of
2002. For the first half of 2003, the business incurred an operating loss of
$10.4 million compared to an operating loss of $0.2 million in 2002. The
substantial decline in profitability of the segment in the second quarter is
attributable to numerous factors including: lower sales volumes, lower average
selling prices, higher costs of purchased parts and health care, and expenses
associated with the start-up of the new facility in Curitiba, Brazil. These
factors also explain the results for the first half of the year except that
higher unit volumes were offset by unfavorable mix.

Pump Products

Pump business sales in the second quarter of 2003 amounted to $39.0 million
compared to $40.7 million in 2002. Year-to-date sales amounted to $70.9 million
in 2003 compared to $69.0 million the previous year. The decline in second
quarter sales was primarily attributed to weaker sales in water gardening
products due to the cool, wet spring weather. The improvement in first half 2003


                                                                         Page 13
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 2
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

sales was due to increased volumes in condensate products sold to the HVAC and
plumbing markets, and in industrial products sold through the aftermarket
distribution channel.

Operating income amounted to $4.9 million in the quarter ended June 30, 2003
compared to $6.2 million in the same period of 2002. Operating income in the
first half of 2003 decreased to $8.4 million from $9.1 million in 2002. The
decrease in operating income in the second quarter 2003 compared to 2002 is
attributable to lower sales volumes and increased administrative costs.

Restructuring Charges and Other Items

Second quarter 2003 results were adversely affected by a restructuring and
impairment charge of $28.5 million ($18.2 million net of tax or $0.99 per share)
related to the consolidation of operations in the Engine & Power Train business.
As previously announced, the restructuring includes the closure of the Company's
Douglas, Georgia and Sheboygan Falls, Wisconsin production facilities, and the
relocation of certain production capacities to the new Curitiba, Brazil facility
and other existing U.S. locations. The closings affect approximately 550 and 250
people at the Douglas and Sheboygan Fall facilities, respectively. The
restructuring and impairment charge, which has been recognized in accordance
with SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived
Assets" and SFAS No. 146 "Accounting for Costs Associated with Exit or Disposal
Activities," includes approximately $6.8 million in earned severance and future
benefit costs relating to manpower reductions, $2.0 million in plant closing and
exit costs incurred through June 30, 2003, and $19.7 million in asset impairment
charges for idled equipment and facilities. The amount of severance and future
benefit costs mentioned above includes $0.8 million in curtailment losses
related to the pension plan at the Sheboygan Falls, Wisconsin facility. Benefits
of the restructuring likely will not be noticeable until the first quarter of
2004 when the new facility is fully functional.

Under SFAS No. 146, severance payments that require future service to be
received is accrued as earned and other costs are only recognized to the extent
a liability has been incurred. Accordingly, under the restructuring plan, the
Company expects to recognize additional plant closing and exit costs of $3.4
million, and a curtailment gain of $4.4 million related to other post-employment
benefits at the Sheboygan Falls, Wisconsin facility in the third, and possibly,
fourth quarters of 2003.

As of June 30, 2003, manufacturing operations at the Douglas, Georgia facility
had ceased and approximately 90% of the employees had been dismissed. Through
June 30, 2003 the Company had paid approximately $0.3 million in severance
costs and $1.6 million in closing and exit costs related to the Engine & Power
Train business restructuring action.

First half 2003 results were adversely affected by a $13.6 million ($8.7 million
net of tax or $0.47 per share) charge, recognized in the first quarter, related
to environmental costs at the Company's Sheboygan Falls, Wisconsin facility. On
March 25, 2003, with the cooperation of the Environmental Protection Agency, the
Company entered into a liability transfer agreement with Pollution Risk
Services, LLC ("PRS"), whereby PRS assumed substantially all of the Company's
responsibilities, obligations and liabilities for remediation of the Sheboygan
River and Harbor Superfund Site (the "Site"). While the Company believes the
arrangements with PRS are sufficient to satisfy substantially all of the
Company's environmental responsibilities with respect to the Site, these
arrangements do not constitute a legal discharge or release of the Company's
liabilities with respect to the Site. The cost of the liability transfer
arrangement was $39.2 million.


                                                                         Page 14
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 2
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

The charge consists of the difference between the cost of the arrangement and
amounts previously accrued for the cleanup. The Company also maintains a reserve
of $0.5 million to reflect its potential environmental liability arising from
operations at the Site, including potential liabilities not assumed by PRS
pursuant to the arrangement. Additional information is available in the
Company's Form 8-K filed on April 9, 2003.

First half 2002 results were adversely affected by a $4.5 million ($2.8 million
net of tax or $0.15 per share) restructuring charge in the Compressor segment
recognized in the first quarter. The charge relates to the decision to relocate
the production of additional rotary compressor product lines to Brazil from the
United States and consists of the write-down of certain equipment, which will
not be used in other operations.

Accounting Change

The cumulative effect from an accounting change of $4.8 million ($3.1 million
net of tax) recorded in the first quarter of 2002, resulted from the Company
adopting Statement of Financial Accounting Standards (SFAS) No. 142 "Goodwill
and Other Intangible Assets" on January 1, 2002. Under SFAS No. 142, goodwill is
no longer amortized, but is subject to impairment testing on at least an annual
basis. As required by the Statement, the Company tested for impairment at the
date of adoption and found that the goodwill associated with the Engine & Power
Train European operations had been impaired.

Interest Expense

Interest expense amounted to $6.2 million in the second quarter of 2003 compared
to $1.2 million in the second quarter of 2002. Interest expense amounted to
$11.5 million in the first half of 2003 compared to $2.1 million in the same
period of 2002. The increase is primarily related to the temporary and permanent
financing added in connection with the acquisition of FASCO. See "LIQUIDITY,
CAPITAL RESOURCES AND RISKS" for further information regarding this debt.

Interest Income and Other, Net

Interest income and other, net amounted to $5.2 million in the second quarter of
2003 compared to $3.0 million in the second quarter of 2002. Interest income and
other, net amounted to $10.1 million in the first half of 2003 compared to $5.8
million in the same period of 2002. This increase resulted primarily from higher
cash balances in Brazil.

Taxes on Income

The effective income tax rate was 36.0% in the second quarter of 2003 and first
half of the year, compared to 35.5% in the comparable periods of 2002.





                                                                         Page 15
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 2
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Outlook

The outlook for the balance of the year remains somewhat uncertain. The
accretive impact of FASCO's results are expected to be positive, but results
from the Company's traditional Compressor, Engine & Power Train and Pump
segments are expected to be soft in relation to the prior year, reflecting
little economic growth, higher costs and the unfavorable effects of a weak U.S.
dollar.

Each of the Company's business segments operates in highly competitive
environments characterized by excess worldwide production capacity, new
competitors located in countries with lower labor costs, resulting in overall
price deflation. The Company's fundamental strategy to remain competitive is to
manufacture high volume commodity-like components in low cost manufacturing
locations, while providing final customization of engineered products to niche
markets near the point of consumption. As a result, it is still possible that
further restructuring actions will be necessary to realign the Company's
productive capabilities. Plans continue to be developed to determine how best to
further reorganize the Company's operations and product offerings in light of
current and rapidly changing market conditions.

LIQUIDITY, CAPITAL RESOURCES AND RISKS

Historically, the Company's primary source of cash has been net cash provided by
operations. Operating activities in the first half of 2003 used cash of $13.8
million compared to a source of $68.3 million in 2002. The greater use of cash
in 2003 resulted primarily from lower profitability, higher net working capital
needs, and the $39.2 cash payment for the Liability Transfer and Assumption
Agreement. Working capital of $543.0 million at June 30, 2003 was up slightly
from $503.7 million at the end of 2002.

Capital spending during the first half of 2003 was $31.6 million compared to
$35.0 million in the first half of 2002. Total capital spending for 2003 is
projected to remain near 2002 levels.

On December 30, 2002, the Company acquired FASCO from Invensys Plc for cash of
$396.6 million and the assumption of approximately $14.5 million in debt. The
acquisition was financed, in part, with proceeds from new bank borrowings
including $250 million from a six-month bridge loan and $75 million from a new
three-year $125 million revolving credit facility. On March 5, 2003, the Company
completed a private placement of $300 million Senior Guaranteed Notes due March
5, 2011. These notes bear interest at a fixed rate of 4.66%. Proceeds from the
private placement were used to repay the bridge loan and pay down borrowings
under the revolving credit facility. On March 31, 2003, the remaining $25
million outstanding on the revolver was repaid from available cash resources.

Working capital requirements, planned capital investment and stock repurchase
expenditures, if any, for 2003 are expected to be financed primarily through
internally generated funds; however, short-term borrowings and various financial
instruments are utilized from time to time to hedge currency risk and finance
foreign working capital requirements. As noted above, the Company



                                                                         Page 16
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 2
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

maintains a $125 million revolving credit facility that is available for general
corporate purposes. The Company may also utilize long-term financing
arrangements in connection with state investment incentive programs.

The Company will continue to focus its efforts on improving the profitability
and competitiveness of its worldwide operations. It is likely that additional
production relocation and consolidation initiatives will take place during 2003
that could have a material effect on the consolidated financial position and
future results of operations of the Company. These initiatives could include
joint ventures or business combinations.

Environmental Matters

The Company is subject to various federal, state and local laws relating to the
protection of the environment, and is actively involved in various stages of
investigation or remediation for sites where contamination has been alleged.
(See Note 5 to the financial statements.) Liabilities, relating to probable
remediation activities, are recorded when the costs of such activities can be
reasonably estimated based on the facts and circumstances currently known.
Difficulties exist estimating the future timing and ultimate costs to be
incurred due to uncertainties regarding the status of laws, regulations, levels
of required remediation, changes in remediation technology and information
available.

At June 30, 2003 and December 31, 2002, the Company had accrued $46.8 and $36.3
million, respectively, for environmental remediation, including $40.2 and $29.2
million, respectively, relating to the Sheboygan River and Harbor Superfund
Site. As these matters continue toward final resolution, amounts in excess of
those already provided may be necessary to discharge the Company from its
obligations for these sites. Such amounts, depending on their amount and timing,
could be material to reported net income in the particular quarter or period in
which they are recorded. In addition, the ultimate resolution of these matters,
either individually or in the aggregate, could be material to the consolidated
financial statements.

CAUTIONARY STATEMENTS RELATING TO FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that are subject to the safe
harbor provisions created by that Act. In addition, forward-looking statements
may be made orally in the future by or on behalf of the Company. Forward-looking
statements can be identified by the use of terms such as "expects", "should",
"may", "believes", "anticipates", "will", and other future tense and
forward-looking terminology, or by the fact that they appear under the caption
"Outlook."

Readers are cautioned that actual results may differ materially from those
projected as a result of certain risks and uncertainties, including, but not
limited to, i) changes in business conditions and the economy in general in both
foreign and domestic markets; ii) the effect of terrorist activity and armed
conflict; iii) weather conditions affecting demand for air conditioners, lawn
and garden products, portable power generators and snow throwers; iv) the
success of the Company's





                                                                         Page 17
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 2
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


ongoing effort to bring costs in line with projected production levels and
product mix; v) financial market changes, including fluctuations in interest
rates and foreign currency exchange rates; vi) economic trend factors such as
housing starts; vii) emerging governmental regulations; viii) availability and
cost of materials; ix) actions of competitors; x) the ultimate cost of resolving
environmental matters; xi) the Company's ability to profitably develop,
manufacture and sell both new and existing products; xii) the extent of any
business disruption that may result from the restructuring and realignment of
the Company's manufacturing operations, the ultimate cost of those initiatives
and the amount of savings actually realized; xiii) the integration of the FASCO
Motors business into the Company and the ultimate cost associated therewith; and
xiv) potential political and economic adversities that could adversely affect
anticipated sales and production in Brazil. These forward-looking statements are
made only as of the date hereof, and the Company undertakes no obligation to
update or revise the forward-looking statements, whether as a result of new
information, future events or otherwise.








































                                                                         Page 18
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 3
           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to risk during the normal course of business from credit
risk associated with accounts receivable and from changes in interest rates,
commodity prices and foreign currency exchange rates. The exposure to these
risks is managed through a combination of normal operating and financing
activities which include the use of derivative financial instruments in the form
of foreign currency forward exchange contracts and commodity forward purchasing
contracts. A discussion of the Company's policies and procedures regarding the
management of market risk and the use of derivative financial instruments was
provided in its Annual Report on Form 10-K in Item 7A and in Notes 1 and 10 of
the Notes to Consolidated Financial Statements. The Company does not utilize
financial instruments for trading or other speculative purposes. There have been
no changes in these policies or procedures during the first half of 2003.

The Company utilizes foreign currency forward exchange contracts to hedge
foreign currency receivables, payables and other known transactional exposures
for periods consistent with the expected cash flows of the underlying
transactions. The contracts generally mature within one year and are designed to
limit exposure to exchange rate fluctuations because gains and losses on the
hedged transactions offset gains and losses on the contracts. At June 30, 2003
and December 31, 2002, the Company held foreign currency forward exchange
contracts and foreign currency call options with total notional values in the
amount of $15.6 and $4.9 million, respectively.

The Company uses commodity forward purchasing contracts to help control the cost
of traded commodities, primarily copper and aluminum, used as raw material in
the production of compressor motors, electrical components and engines. Local
management is allowed to contract commodity forwards for a limited percentage of
projected raw material requirements up to one year in advance. The total values
of commodity forwards outstanding at June 30, 2003 and December 31, 2002 were
$13.2 and $14.6 million, respectively.



                                                                         Page 19
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                     PART I. FINANCIAL INFORMATION - ITEM 4
                            CONTROLS AND PROCEDURES

As of the end of the fiscal quarter covered by this report, the Company carried
out an evaluation under the supervision and with the participation of the
Company's management, including the Company's President and Chief Executive
Officer and the Company's Vice President, Treasurer and Chief Financial Officer,
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that
evaluation, the Company's President and Chief Executive Officer along with the
Company's Vice President, Treasurer and Chief Financial Officer concluded that
the Company's disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Company's periodic SEC
filings.

There have been no significant changes in the Company's internal controls or in
other factors which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation.



                                                                         Page 20
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
                           PART II. OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

    (a)        Exhibit
                Number     Description

                 31.1      Certification of the President and Chief Executive
                           Officer pursuant to Section 302 of the Sarbanes-Oxley
                           Act of 2002.

                 31.2      Certification of the Chief Financial Officer
                           pursuant to Section 302 of the Sarbanes-Oxley Act
                           of 2002.

                 32.1      Certification of the President and Chief Executive
                           Officer pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002.

                 32.2      Certification of the Chief Financial Officer
                           pursuant to Section 906 of the Sarbanes-Oxley Act
                           of 2002.



    (b)      On April 8, 2003, the Company filed a report on Form 8-K announcing
             manufacturing restructuring actions.

             On April 9, 2003, the Company filed a report on Form 8-K reporting
             the Company's entrance into a Liability Transfer and Assumption
             Agreement with Pollution Risk Services, LLC in connection with
             the Sheboygan River and Harbor Superfund Site in Wisconsin.

             On April 17, 2003, the Company filed a report on Form 8-K reporting
             changes in registrant's certifying accountant.

             On April 22, 2003, the Company filed a report on Form 8-K reporting
             changes in registrant's certifying accountant.

             On April 25, 2003, the Company filed a report on Form 8-K regarding
             its 2003 first quarter consolidated results.

             On May 7, 2003, the Company filed a report on Form 8-K announcing
             plant closing of Sheboygan Falls, Wisconsin Diecasting facility.

             On May 16, 2003, the Company filed a report on Form 8-K reporting
             changes in registrant's certifying accountant.

             On July 7, 2003, the Company filed a report on Form 8-K lowering
             the Company's second quarter earnings expectations.

             On July 25, 2003, the Company filed a report on Form 8-K reporting
             its second quarter 2003 financial data and investor presentation.

                                                                         Page 21
<PAGE>
                   TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES

                                    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.

                                      TECUMSEH PRODUCTS COMPANY
                                      -------------------------
                                             (Registrant)



Dated:  August 1, 2003           BY:     /s/ DAVID W. KAY
      ------------------             -----------------------------------------
                                       David W. Kay
                                        Vice President, Treasurer and
                                         Chief Financial Officer (on behalf of
                                         the Registrant and as principal
                                         financial officer)































                                                                         Page 22
<PAGE>
                                 EXHIBIT INDEX


               Exhibit
                Number     Description

                 31.1      Section 302 Certification of Chief Executive Officer

                 31.2      Section 302 Certification of Chief Financial Officer

                 32.1      Section 906 Certification of Chief Executive Officer

                 32.2      Section 906 Certification of Chief Financial Officer