By Peter Carbonara

(MONEY Magazine) – Kenneth Chenault, American Express. The bad news first. When Chenault took over this past January, the economy began slowing down for real. The corporate T&E budgets that are AmEx's lifeblood dried up. In April, Chenault announced 5,000 layoffs. And in July, he disclosed that losses on junk bonds held by the company's financial advice unit had gotten so bad that AmEx would have to take a charge of more than $1 billion against its earnings. The stock is down 30% for the year, to a recent $40, and perennial Wall Street gossip that AmEx is ripe for a takeover has been revived.

Now the good news. The new CEO has proved that he fixes things at AmEx when they get broken. Chenault ran the flagship card business when it was under heavy assault from rivals in the 1990s; he pushed snooty managers to come up with new mass-market products and land deals with big retailers that AmEx had previously spurned. In the wake of the junk bond mess, Chenault has shown similar moxie, cutting AmEx's losses while taking personal and public responsibility for the bad investments.

As a result, big shareholders are still high on the core business--and the new chief. Ken Feinberg of Davis Selected Advisers, the highly successful fund managers who are the third largest holder of AmEx (Warren Buffett is No. 1), says, "We've known Ken for a long time, and we're happy he's running the company." While neither as abrasive nor as charismatic as his predecessor, Harvey Golub, Chenault, says Feinberg, "has got a lot of what it takes to run a major corporation."

He's definitely got the right damn-the-torpedoes attitude. AmEx, Chenault tells MONEY, can not only endure bad times but grow despite them. "We've got to face reality," he says, "but we can't get mired down in reality." --P.C.

David D'Alessandro, John Hancock. In the colorless world of insurance executives, D'Alessandro is something of a wild man. He's the author of a bestseller with the swaggering title Brand Warfare: 10 Rules for Building the Killer Brand. Two years ago, when the International Olympic Committee, of which Hancock is a major sponsor, was moving slowly to clean up the mess from the Salt Lake City bribery scandal, D'Alessandro raised hell about it to the press and threatened to pull the plug.

This is not your father's John Hancock. Sure, it has been around for 139 years, but it is in a real sense a new company. Formerly a private mutual insurer owned by its policyholders, Hancock went public only last year. Fueled by its healthy fundamentals and by Wall Street's souring on New Economy lemons, the stock rose from $17 to about $40, where it is now. Some of this is due to the show-bizzy salesmanship that one-time v.p. for p.r. D'Alessandro has injected into the company's image. But he also has long experience as an operating executive, having run the retail and group life- and health-insurance units. Lately, while other insurers have stumbled as the economy stalls, D'Alessandro has cut costs and unloaded unprofitable products. Second-quarter earnings were up 6[cents] a share on the year, beating analyst estimates by a penny.

True to his bombastic (for insurance) image, D'Alessandro says the slowdown is actually an opportunity to sell more policies. "I think all those mutual fund babies who looked so smart during the boom are now feeling very vulnerable," he says. As for grading his performance as CEO to date, he demurs: "Companies are judged in the long run--the A's go to people who do it for years. We've only done six quarters." --P.C.

John Eyler, Toys R Us. This is the company that invented big-box toy retailing--then forgot how to do it. Trawling for Pokemon or what-have-you in its grim storehouses became a drag, which is about the worst thing you can say about a toy retailer.

Since Eyler took over as CEO in January 2000, he's been trying to change that. An alumnus of F.A.O. Schwarz and Federated Department Stores, Eyler's big priorities have been to refurbish the chain's stores and retrain its famously unhelpful salespeople. He's also spun off a debt-heavy Japan division and announced a $1 billion stock buyback. Money managers have liked what they heard, driving the stock as high as $31 this spring--up 116% from the day Eyler took over--largely on the basis of a healthy Christmas 2000.

The second quarter of 2001, though, has been tough. Eyler's revamping is costing big money. Toys R Us showed a larger-than-expected loss of 9 cents a share and the stock has edged down to around $20. None of this bothers Bill Nygren, whose very hot Oakmark Select Fund is one of the biggest owners of Toys R Us. He especially likes Eyler's efforts to sell more exclusive and high-margin items. Most important, though, is the change in the company's thinking, particularly among Toys R Us lifers. "Once they realized that somebody really cared about customer satisfaction," Nygren says, "they started to care too." --P.C.

James McNerney, 3M. Minnesota Mining & Manufacturing had it all. A revered name. A reputation for innovative R&D. A reservoir of 50,000 products, from Post-It Notes to computer displays to a cream for genital warts. Everything you could want--except nimble management and significant growth.

Which is where McNerney comes in. He's the first 3M chief straight from another company, in his case General Electric, where he spent 18 years and most recently ran GE's $10 billion aircraft-engines unit. McNerney was a potential heir to retiring CEO-deity Jack Welch, but when he was passed over late last year for GE's top post, he was snapped up by 3M. Investors figured that anyone who could hold his own with the formidable Welch would be the jolt of adrenaline that 3M's leisurely culture seemed to need. The stock zoomed from about $100 just before McNerney was named in early December to $122 by the end of the year. "A nice little run," in the words of Harbor Capital Appreciation fund manager Sig Segalas, an investor who'd had no interest in the company until McNerney was hired. Recently the stock has hovered around $110 (having dipped below $100 earlier this year), giving 3M a market cap of $45 billion.

When McNerney actually arrived at 3M this January, he brought with him a GE-style emphasis on speed and accountability, not to mention a certain ruthlessness about cutting costs. In April he slashed 3M's work force by 5,000 jobs. He's also begun transplanting the Six Sigma quality-control and productivity program that is holy writ at GE. As he told shareholders at 3M's annual meeting in May: "The key is picking up the pace for the entire organization to get our people to the point where speed is exhilarating and fun.... Faster decision-making, faster implementation and faster growth."

Although 3M met earnings estimates for the first quarter, it has since had to revise its Q2 projections downward. Segalas says that's a reflection of the economy, not McNerney's stewardship: "I think he's done well. He's executing on the expense side." --P.C.