Since the U.S. Congress passed the Endangered Species Act in 1973, and subsequently listed the spotted owl as an endangered species in 1990, the debate over the appropriate management of public and private forests has continued at a fevered pitch in the Pacific Northwest. The listing of the spotted owl has led to the loss of tens of thousands of jobs in the logging and forest products industry, which has leveled a heavy toll on many rural communities in Oregon, Washington, and California that have relied for decades on a robust forest products industry to sustain their economies. In 1992 in Oregon, for example, the wood products industry was nine times greater as a share of the total Oregon economy than the industry was as a share of the total U.S. economy. While heated debate in the press and at the grassroots levels continues surrounding these issues, many remain unaware of a fundamental shift toward value-added manufacturing that has occurred in the region's forest products industry.Since the late 1980s, employment in the secondary wood products industry in Oregon has increased from 27% to 40% of the total forest products workforce in 1995, according to the Oregon Employment Division. Total employment in Oregon for logging operations, sawmills, and veneer and plywood operations dropped between 1990-95, losing over 13,000 jobs. In contrast, the value-added and secondary wood products industry - furniture, millwork, cabinetry, and the like - actually generated 11% more jobs during that same period and outnumbered total employment opportunities by a 2:1 margin for sawmills, veneer, and plywood operations, and a 3:1 margin for logging operations. By 1995, the percentage growth rate forvalue-added wood production in Oregon outpaced the percentage growth rate of all other industry sectors in the state, including the burgeoning high-tech and electronics industry.Although an apparent surprise to economists tracking the economic impacts of harvest restrictions in the Pacific Northwest, the growth of the secondary wood products industry has proven to be a stabilizing influence to the overall Oregon economy. It has done so by focusing on making more product out of existing, or in many cases less, resource. In effect, the mandated harvest restrictions provided a unique two-by-four incentive to the industry to figure out how to maximize production with available resources. The results were surprising.Research by the Oregon Wood Products Competitiveness Corporation has documented that for every one million board feet of wood being processed into commodity lumber, on the average only three full-time, family-wage jobs are created. Full-time, family-wage jobs are year round positions that provide industry-competitive wage rates with benefits. If that same one million board feet in lumber were processed into component parts such as furniture blanks or table turnings, an additional twenty full-time, family-wage jobs could be created. And if that same one million board feet of wood represented in component parts were then processed into quality furniture for consumer use, another eighty full-time, family-wage jobs could be created.Even so, industry adaptation to more value-added wood product manufacturing has been slow. Citing, in part, the difficulties in changing an industry culture and mind-set, Oregon's Wood Products Competitiveness Corporation determined in 1995 that lessthan 20% of the log volume harvested just in the central Oregon region alone found its way to secondary manufacturers in the Northwest. Eighty percent of the total lumber volume (approximately 1.8 billion board feet of timber) was processed into value-added product outside the western region. This equated to between 4,000 and 25,000 missed job opportunities for the region because commodity lumber was redirected elsewhere.Increasing value-added wood product manufacturing in forest communities throughout the world may be as crittical for achieving sustainable forestry as implementing new forest management practices. Making more with less, maximizing on the resources sustainably harvested, and converting wood waste into wood profits and full-time, family-wage jobs are all fundamental components of value-added wood processing. They provide the framework for achieving sustainable forestry and sustainable community development.Parsons Pine Products, located in Ashland, Oregon, a small community of 14,000 people based in the heart of spotted owl territory, has been a pioneer and a leading advocate of value-added wood processing for the last fifty years. Once considered, by many in the industry, a maverick operation that often challenged traditional production assumptions and standard lumber grading rules, today Parsons Pine Products has emerged as a unique example of sustainable forest practices that turn trash boards into cash rewards. Its experiences in sustainable forest management SFM can be instructive for an industry in transition.