Exhibit 99.3
Business Strategy Supplement
Tecumseh Products Company
July 2009
0
1
Our Path to the Strategic Plan
Beginning in August 2007 with the appointment of Ed Buker as CEO, the Company’s Board of Directors
initiated a strategic review, which concluded in June 2008.
Management, working in conjunction with CRA, Rothschild and the Board, evaluated every reasonable
option to determine the best opportunity for maximizing shareholder return, including:
Sale of the business in its entirety, by assessing…
Interested and capable strategic and financial buyers
Opportunities for synergies
Favorability of current market conditions and level of M&A activity
How the company would be priced based on recent financial performance
Sale of the business in parts, by evaluation of…
Separable and saleable potential of operations and products
Current sale value via breakup as compared to other alternatives
If not sold, potential for the business over the next five years; identify best opportunities to maximize
profitability and cash flow. Options included:
Footprint rationalization
Establishment of joint ventures and technology alliances
Changes in the marketing and sales organization
Introduction of new products
Elimination of unprofitable products / customers
Distribution of available cash to shareholders
The overwhelming conclusion: the
greatest shareholder value could be
generated by pursuing a Best Cost
Country strategy for significant margin
improvement
The next three pages are representative of data reviewed during this rigorous process…
2
We are a mid-tier global compressor player today; by 2012 we
expect to be the same size but with stronger profitability
Tiers based on market positioning and product offering
All players in commercial refrigeration also offer condensing units
Financials (2008)
Player
Summary
Markets
Products
Footprint
Rev ($B)
Strength
Emerson
Climate
Tech.
(Copeland)
Diversified industrial
Market leading products
(scroll) and profitability
Participates in commercial
and AC, but not R&F
Com’l
AC
Recip
Scroll – leader
Controls
Motors, drives
and valves
HCC: US, Ireland,
Germany, Belgium
LCC: Mexico, Czech
Rep., China, India,
Thailand
3.8 (Climate)
24.8 (Corp)
EBIT: 14% (Clim.);
17% (Corp)
Cash: $1.8 Bn
Debt: $4.5 Bn
Danfoss
Diversified industrial
Broad market participation
Complementary products
High debt load (Sauer-
Danfoss acquisition)
R&F
Com’l
AC
Recip
Scroll
Controls
Heating
Motors
HCC: US, Germany,
France
LCC: Mexico,
Slovenia, Slovakia,
China
1.7 (AC Ref)
6.0 (Corp)
EBIT: 3% (AC Ref);
2% (Corp)
Cash: $108 MM
Debt: $1.9 Bn
Tecumseh
(now)
Broad market participation
Strong historical reputation
Lagging profitability
R&F
Com’l
Specialty
AC
Recip
Rotary
Scroll – limited
HCC: US, France
LCC: Brazil, India,
Mexico
1.0
EBIT: -7%
Cash: $110 MM
Debt: $32 MM
(2012 target)
Improved profitability
Enhanced products
All three technologies
R&F
Com’l
Specialty
AC
Recip
Rotary
Scroll –
extensive
HCC: Late Stage
Customization
LCC: Brazil, India,
Mexico, others
1.0
EBIT: 5%
Cash: $141 MM
Debt: $44 MM
Embraco /
Whirlpool
R&F and small
commercial focus
Owned by Whirlpool
R&F
Com’l
Recip – smaller
HCC: Italy
LCC: Brazil,
Slovakia, China
0.9 (Em ’05)
18.9 (Corp)
EBIT: 4% (Em ’05);
4% (Whirlpool)
Cash: $146 MM
Debt: $2.2 Bn
ACC
Shrinking to just R&F
R&F
Recip – smaller
HCC: Germany,
Italy
LCC: Austria,
Hungary, China
~ 0.3 (’07)
EBIT: 3% (’07)
NI: -1% (’07)
Cubigel
Carve-out from ACC
Small, commercial focus
Com’l
Recip – smaller
HCC: Spain
~0.16 (est.)
Sources:
BSRIA, Company websites
Capital IQ, Annual Reports
Tecumseh’s Competitive Standing
3
Compressor manufacturer screening
ACC / Cubigel
Changshu Baixue
Dongling
Fusheng
Howden
Mayekawa
Samsung
Tubocor
ACCEL
Chongqing General (Midea)
Dorin
Gelfred
Huangshi Dongbei
MELCO
Sanyo/MABE
Vilter
Applicom/Necchi
Chongqing Jialing
Ebara
Grasso
Huayi
MHI
Sharge
Voltas
Bitzer1
Chunlan
Embraco
Gree
Jiaxipera / Huayi
Qianjiang
Sichuan Danpu
Wanbao
Bock
Copeland
Fedders
Guangzhou Lengji
Kobelco
Qingan
Teco
Wuxi
Bristol
Daikin
Frascold
Hanbell
Kulthorn
Rechi
TEE
Wuzhou
Carlyle/Carrier
Dalian
Frick
Hartford
LG
Refcomp
Toshiba Carrier
Yantai Moon
Changming
Danfoss
Frigapol
Hitachi
Matsushita
Roltec
Trane
York
ACC / Cubigel
Changming2
Embraco
Huayi
Matsushita
Sanyo
Applicom / Necchi
Changshu Baixue
Guangzhou Lengji
Jiaxipera
MELCO (Mitsubishi)
Sichuan Danpu
Bitzer
Copeland
Hitachi
Kulthorn
Qianjiang
TEE
Bristol
Danfoss
Huangshi Dongbei
LG
Samsung
ACC / Cubigel
Changshu Baixue
Huayi / Jiaxipera
Embraco
Sichuan Danpu
Bitzer1
Copeland
Guangzhou Lengji
Kulthorn
TEE
Bristol
Danfoss
Huangshi Dongbei
Qianjiang
= Fact review set
1. Bitzer included due to previous partnership
2. Inconsistent information across sources
All Compressor Manufacturers
Sources: BSRIA, Company websites
4
Markets
Regions
Products
Footprint
Obstacles /
Other
Emerson
2
2
2
2
Cash $1.8 Bn
T. adds R&F (less
attractive)
Overlap in most regions
T. offers R&F w/o
paying Embraco
T. adds Brazil
Danfoss
4
4
3
5
Debt $3.8 Bn (78% of
2008 net sales)
Overlap in R&F and
Com'l
T. adds L. Am., India;
overlap in Eur, NA
T. has broad-range TH,
scroll
T. adds Brazil, India
ACC
4
4
5
5
Divested Cubigel;
Private equity owned
Overlap in R&F and
com'l
T. adds NA, L. America,
India
T. adds lighter TH;
larger recip; scroll
T. adds Brazil, India
Bristol
4
5
4
4
Private equity owned
T. Adds com’l ref and
R&F
T. adds L. America,
Europe, India
T. adds rotary, scroll,
Ref Rcips
T. adds India and Brazil
Embraco
4
3
4
3
Whirlpool ownership;
combination would
capture 80%+ of
Brazilian market
R&F, small com'l
overlap
T. adds India
T. adds larger recip,
rotary, scroll
T. adds India
Huayi
4
5
4
3
T. adds stronger
presence in com’l
T. adds N. and L.
America and Europe
T. adds higher capacity
and CU’s
T. Adds India, Brazil
Bitzer
3
2
3
2
Approximately $0.5 Bn
in annual net sales
T. Adds R&F, small
com'l
Overlap in most regions
T.'s are smaller;
T adds scroll tech.
T. expands Brazil, India
Synergy opportunities between Tecumseh and competitors
Key
= Low opportunity
= High opportunity
/ Cubigel
/ Jiaxpera
Sources: BSRIA, Company websites; Capital IQ; Annual reports
5
Tecumseh’s assets are separable, but selling them individually
would yield inferior value relative to the BCC strategy
Based on analysis and prior experience, we conclude:
*Independent regional companies could cross-supply via agreements, but the added frictions and mark-ups
from independence make the activity less efficient as a primary strategy, relative to the BCC plan
Regional entities could conceivably operate independently
Each regional operation would be capable of competing only in limited markets
North America: focus on NA commercial and specialty AC
Europe: focus on Europe commercial
India: focus on India / Middle East R&F, commercial and AC
Brazil: focus on cross-region R&F and Latin America light commercial and AC
Selling one or several entities would require supply agreements with remaining entities
Despite feasibility of separable operations, value available from a breakup appears modest
Given LTM performance of each regional operation – each would likely be a distressed sale
Brand reputation and distribution channels (liquidate operations): provides value to strategic buyer; in light
of severance cost and contingent liabilities, net liquidation value is less than current market value
Despite lack of empirical evidence, it is possible that breakup value today exceeds value of selling
complete entity – however…
The BCC strategy pairs lower-cost manufacturing (Brazil, India) with higher-price markets (North
America, Europe), creating a level of value greater than any current disposition strategy, whether
in whole or in parts*
Both breakup and complete-sale values today are much lower than value expected under BCC plan
We have a proven history of pursuing breakup strategy using the same methodology with successful
results (Fasco, Engine & Powertrain, MP Pumps, Little Giant) Based on that experience, we know that the
breakup of the compressor business would not yield a similarly favorable outcome.
6
Approach for cash distribution to shareholders
Cash Distribution to Shareholders
We will pay regular dividends out of earnings, once
earnings and free cash flow are positive and projected
to remain positive
We will use cash for share buy-backs or special
dividends when we have “excess cash”
Under current credit market conditions, we expect “excess
cash” to be that above $75 – 125 MM plus BCC and
operational funding needs
We will buy back shares only if there is a single class of
stock
7
Important Proxy Information:
Tecumseh Products Company has filed a definitive proxy statement/prospectus and other
relevant documents concerning the annual meeting with the United States Securities and
Exchange Commission (“SEC ”) on July 10, 2009. Before soliciting proxies, the Company will
provide shareholders with the definitive proxy statement/prospectus. The Company advises
shareholders to read the definitive proxy statement/prospectus because it contains important
information about the company and certain proposals to be presented to a vote of shareholders
at its 2009 annual meeting. Shareholders may obtain free copies of the definitive proxy
statement/prospectus and other documents the company files with the SEC at the SEC’s website
at www.sec.gov. They may also access a copy of the company’s definitive proxy
statement/prospectus by accessing www.tecumseh.com. In addition, shareholders may obtain a
free copy of the definitive proxy statement by contacting Georgeson Inc. toll free at (866) 203-
1198 (banks and brokers call (212) 440-9800).
The company, its directors, some of its executive officers and certain other of its employees are
participants in the solicitation of proxies in respect of the matters to be considered at the annual
meeting. Information about the participants is set forth in the definitive proxy
statement/prospectus. Information about the participants’ direct or indirect interests in the matters
to be considered at the annual meeting is also contained in the proxy statement/prospectus
referred to above.