It's a device that senses heat and when the temperature passes a certain threshold it sets of a pretty loud bell to warn the inhabitants of fire. There's a chain that you could pull to set off the bell to scare the boogie man away - or the living crap out of yourself. Ask me how I know.
The orange protrusion in the down position indicates the alarm is not set or someone pulled the chain or... IIRC you can wind this guy back up and push the orange arm up to reset it - or something like that.