High Tech -- And Handcrafted

It was the moment execs at Medtronic Inc. (MDT ) had always dreaded. In early April, the medical-products maker had to recall thousands of defibrillators after learning that the devices, implanted in the chests of patients with heart disease, were taking too long to discharge a shock as their batteries aged and lost power. At least four people may have died and another may have been seriously hurt as a result.

Product defects are intolerable when hearts hang in the balance. As Medtronic Chairman and CEO Arthur D. Collins Jr. puts it: "A single quality issue can deep-six a business." Yet Medtronic didn't go down. In fact, the company is boosting its already-dominant 53% market share in cardiac devices. That's because the slipup was an aberration at an outfit that, over decades of manufacturing, has become the standard-setter for quality. Medtronic and its rivals "all make fantastic products," says Dr. Stuart M. Portnoy, a cardiac-device specialist at PharmaNet Inc., a Princeton (N.J). consultant. "But Medtronic probably has the best reputation."