That "thing" on the engine side of the firewall is the alarm horn. Those horns tend to fail from lack of use. To test it, unplug the wire and then run a hot wire from the battery and see if it makes a lot of noise :) It is probably corroded internally and will not sound.
Does the dash led blink when you lock the car? If it does, try this: roll down the driver's window, lock the car with the key, then reach in and open the door from the inside. The system is supposed to sound the alarm, unless the hood was not completely closed when you locked the car which keeps the alarm disabled.
Klaus
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The more I learn, the more I forget. So why learn?
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