Highlights of the April 4, 2005 Issue of FORTUNE

COVER STORY
Nike After Knight, by Daniel Roth, page 59
Nike CEO Phil Knight has always been one of the oddest of the FORTUNE 500 CEOs, a man who seems to embody exactly the opposite of what his creation extols. Hidden behind sunglasses, he's an inscrutable presence in a company that mastered making multimillionaire athletes seem accessible. In the past four years, the company has grown from $9.5 billion to what is expected to become a nearly $14 billion design and marketing machine by its year-end this May.

But now Nike finds itself at a major crossroads. Knight has ceded the reins to Bill Perez, the former CEO of consumer-goods company S.C. Johnson, just as Nike's growth seems hard to sustain. And as Daniel Roth reports in his profile of Knight—based on the first extensive interview after his last official day as CEO—what Knight actually does every day in his role managing Nike is mostly a mystery. The ultimate delegator, he has bred legions of executives who have interpreted his silences and nods as freedom to do their own thing and take the company in new directions. "Basically I started selling Tiger shoes in 1964, so it's been 40 years that the company has grown around my idiosyncrasies," says Knight. "They don't even know that they're idiosyncrasies anymore, and of course neither do I."

GM Hits The Skids by Alex Taylor III, page 71
Since its last financial crisis in the early 1990s, GM has taken big strides to reduce costs, improve quality and productivity, and make its cars more relevant to consumers. It remains the dominant force in big, lucrative SUVs, and its finance arm, GMAC, is a money machine. It has also become the No. 2 Western vehicle maker in China, where its market share is growing rapidly, and its turnaround in Europe is succeeding even faster than planned. But despite all this, GM's sales in 2005 are running far below forecasts, and it won't be able to achieve the earnings targets it had provided Wall Street. Alex Taylor looks at how rivals such as Toyota and Hyundai are moving as fast or faster, and at how past mistakes and customer dissatisfaction have left deep scratches on GM's brands.

Is Bob Iger Ready For His Close-Up? by Marc Gunther, page 76
The long-running soap opera at Walt Disney Co. has a new star: Bob Iger, who will take over as CEO in September when Michael Eisner steps down. With Eisner's support, Iger courted directors, charmed investors, and became chief executive by default when every one of his rivals dropped out. "Admirable as they are, though, the qualities that got Iger top billing will take him only so far now that he has to direct the show," says senior writer Marc Gunther. "To make Disney great again, Iger must accomplish three big goals. He needs to heal Disney's diseased culture. He needs to harness the digital technologies that are transforming media. And he needs to lead a creative rebirth at the company."

One False Move by Nicholas Varchaver, page 80
Private equity firms, hedge funds, and their cash-laden ilk have been pulling the levers of capitalism, with investors amassing billions and buying corporations. Among this extremely quiet species, David Bonderman is as dominant as they come. He has earned a reputation as a master dealmaker, spinning equal parts brilliance, energy, and charm inside his ever-moving vortex. His private-equity partnership, Texas Pacific Group, has $20 billion under management, putting it in the top tier of buyout funds.

But its recent attempt to buy Portland General Electric was a deal filled with enough twists to fill a potboiler. And before it ended, Texas Pacific's attempt to buy a utility sparked an epic series of reactions: public demonstrations, conflict-of-interest investigations, state senate hearings, the leaking of "secret documents," and an underage sex scandal. Texas Pacific saw its previously pristine reputation tarred and feathered, and Bonderman's many gifts—his intelligence and charm—couldn't stop a deal from spinning out of control. "When the wizard was forced to step out from behind his curtain, it appears, his powers failed him," says senior writer Nicholas Varchaver.

Inside The Shakeup At Sony by Brent Schlender, page 94
True to form for the CEO of a company long known for its unconventional leaders, Nobuyuki Idei went out like a maverick, naming a foreigner—Sir Howard Stringer, who had spent the past seven years running the company's U.S. operations—as the next chairman and CEO of Japan's most famous company. And that wasn't all. Idei announced that he had asked six other corporate officers who were fellow "inside" directors to join him in resigning from the Sony board when he steps down in June, leaving the "outsiders" with a hefty eight-to-three majority.

"Surprising as Idei's announcement was, even more remarkable is the tale of how and why Idei and the Sony board arrived at Stringer's selection," says FORTUNE editor-at-large Brent Schlender. "Exclusive interviews with Idei and other top Sony executives reveal a boardroom drama of strong wills, executive intrigue, and dashed ambitions. It's the story of a CEO haunted by the ghosts of his predecessors and scrambling to retain control of the vitally important process''—his 'graduation,' as Idei calls it. His goal was not just to find the right people to take over. He had to make sure they would have the flexibility, authority, and backing from the board to accomplish what he hasn't been able to do consistently in his decade as a boss—namely, provoke the company and its 160,000 employees to adapt to new marketplace realities as consumer electronics, mobile communications, computers, digital entertainment, and broadband networks genuinely converge."

DEPARTMENTS
In FIRST: CEO Knockdown Fear and loathing are rife among corporate board members—and they are making sure that CEOs feel their pain. Two Gunslingers' Wrong Calls Even before Bernie Ebbers and Joe Nacchio were accused, they were doomed. How a Corporate Icon Crumbled Perhaps no one was more astonished by the turn of events at AIG than ex-CEO Maurice Greenberg. Clicking for Dollars Quants are out to help advertisers get the most from their online advertising purchases. The Fed's Glory Days Are Over Waning fears of inflation and reduced gridlock in government have dimmed the chairman's aura. Oz Joins the Empire Bill Gates finally landed software star Ray Ozzie—by buying his company. Question Authority New Starbucks CEO Jim Donald tells how he plans to sustain 20% annual growth for the coffee giant. Business Life B-school for sports nuts, Hollywood on the Mississippi, and more. This Just In Ultraviolet vision is common in the animal world. A very few people have this ability too. Gadgets Sony's portable PlayStation finally hits the shelves. You Do What? Sushi broker. In COLUMNISTS: Street Life Congress to Business: How May I Serve You? Politics Would Mr. Smith please go to Washington? In INVESTING: The Smart Way to Play $60 Oil Record crude prices are about to ripple through the entire economy. Here's how to adjust your portfolio. Wall Street Week: The FORTUNE Interview Hedge fund manager David Berman profits by thinking like a patient predator.

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