Place potatoes cut side down in a 12-inch nonstick skillet.
Add water, onion, bacon, salt and black and crushed red pepper.
Bring to a simmer over medium-high heat. Reduce heat and cover. Simmer covered for 15 to 18 minutes. (If you don't have a lid for your skillet, you can set a round baking sheet on top.)
Uncover skillet and increase heat to medium-high so that the water is boiling and there is a lot of steam coming off. Keep cooking until water has evaporated and potatoes are getting browned and bacon has rendered. Stir often so no burning occurs. It will take about 15 minutes.
Remove from heat and stir in thyme. Season to taste with salt and pepper.
If you use medium-sized red potatoes, quarter them.