(FORTUNE Magazine) – MANAGING/Cover Story 36 COMPANIES THAT COMPETE BEST These outfits aren't just winners. They're aggressive machines, laying waste to the competition every day, amassing impressive market share, then amassing more. Some bear familiar names: Eastman Kodak, Perrier, Emerson Electric. Others you may have heard of only if you've had the bad fortune to try to sell against them: Unifi, Jostens, AMP. Here's how they keep rolling relentlessly on. by Bill Saporito

39 SHADES OF GENEEN AT EMERSON ELECTRIC

COMPETITION 48 JAPAN'S GROWING GLOBAL REACH The nation's huge investments around the world are becoming almost commonplace -- a major company here, a giant factory there. But now the Japanese are going further: donating to charities, striving to be good corporate citizens, sending more aid to the Third World than any other country (the U.S. is No. 2). Will political power follow all that cash? by Carla Rapoport

POLITICS & POLICY 59 WHO IS NICK BRADY? WHY IT MATTERS The patrician Treasury Secretary could greatly affect business, investors, and taxpayers. Results so far: two dramatic initiatives -- but some jaw-dropping gaffes as well. by Louis S. Richman

66 BRADY, BUYOUTS, AND PUROLATOR

TECHNOLOGY 75 HOW SAFE ARE YOU IN THE AIR? Terrorists and an aging fleet of aircraft threaten the industry's impressive | safety record. Maintaining safety in the air and security on the ground will get costly. by Anthony Ramirez

THE ECONOMY 92 HOW TO REGAIN THE PRODUCTIVE EDGE Beyond the star performers, many U.S. companies and industries still do not produce well enough. A new MIT report, exclusively excerpted here, tells why -- and what America must do.

LOBBIES 106 THE RESURRECTION OF RALPH NADER After years in the shadows, America's most famous consumer activist shines again. Why the comeback? It's not that he's changed. It's that society has. by Thomas A. Stewart

TRADE 123 NORTH AMERICA'S NEW TRADE PUNCH The U.S.-Canada deal is more exciting than most Americans think. Beyond opening up a huge continental market, it will make companies in both countries more powerful competitors in Europe and Asia. by Louis Kraar

MONEY & MARKETS 129 JUNK BONDS FACE THE BIG UNKNOWN The high-yield debt market coped well with its recent jitters. But with fear of recession mounting, think seriously about weeding your junk portfolio. by John Paul Newport Jr.

133 'THIS IS A DIRTY BUSINESS' William Seidman, head of the FDIC, closes ailing banks for a living. Here he gives the inside story of his new -- and much messier -- job: cleaning up all those troubled savings and loans.

CORPORATE PERFORMANCE 141 COMPANIES TO WATCH Profits are back at Honeywell, and restructuring is almost over. Now if only the raider rumors would go away. Also: Marion Labs, Premiere Radio Networks, Landmark Graphics, and Cimco.

DEPARTMENTS 4 EDITOR'S DESK

6 INDEX

10 NEWS/TRENDS Why Jesse Jackson likes Mike Milken, legal help for investors, Rouse's waterfront blues, and more.

17 FORTUNE FORECAST With inflation and interest rates rising and the economy slowing, executive exuberance is fading a bit. by Vivian Brownstein

Also: Exploding the myth of emaciated business investment. by Todd May Jr.

25 PERSONAL INVESTING FORTUNE's quarterly strategy report: This stock rally isn't worth chasing. by John J. Curran

Also: Portfolio Talk with money manager Florence Fearrington.

153 FORTUNE PEOPLE Olivia Newton-John's newest hit, friendlier skies for Richard Ferris, springtime for Herb Schmertz, and more. by Mark Alpert

154 ON THE RISE

157 OTHER VOICES Headhunter Lester B. Korn tells how to develop the next generation of CEOs.

163 LETTERS TO FORTUNE Consultants who don't do as they say, the pros and cons of ''infrastretching, '' a sailor's lament, and more.

167 KEEPING UP by Daniel Seligman

ABOVE: Gerd Ludwig photographed Emerson Electric CEO Charles F. ''Chuck'' Knight with workers at a motor plant in Paragould, Arkansas.

COVER: Knight photographed by Ludwig at Emerson headquarters in St. Louis.