AKRON, OH -- Goodyear Tire & Rubber Co. reported overall first-quarter sales of $4.5 billion, which were up 1 percent from 2006, but the USW strike in North America reduced income by about $34 million.

North American Tire sales were down 10 percent from the 2006 period, but growth in the first quarter offset that decline, Goodyear said. The tiremaker’s three tire businesses had record first-quarter sales.

For the full year, the company reduced its estimated impact of the strike on North American Tire to between $100 million and $120 million. The previous estimate was $200 million to $230 million.

"Our first quarter represented a strong start to the year, with revenue per tire up 8 percent. This reflected strong pricing and product mix, which exceeded raw material cost increases in the quarter. Our focus on speed and the pace of change at Goodyear is having a meaningful impact," said Robert Keegan, chairman and chief executive officer.

Keegan said he expects the company to exceed its 2008 target of more than $1 billion in cost savings. "We are aggressively targeting additional cost savings in 2009 and raising our gross cost savings goal over this four-year period to between $1.8 billion and $2 billion," he added.

Keegan also said Goodyear intends to increase production capacity for "high-value-added" tires by 40 percent over the next five years and invest in existing facilities in low-cost countries to boost production capacity by one-third.

"These investments are part of our strategy to have approximately half of our production capacity in low-cost manufacturing within five years," Keegan said. "Our global manufacturing capacity will be well aligned with demand and able to support our outstanding new product engine."

Including discontinued operations and charges related to classifying the Engineered Products business as "held for sale," Goodyear had a first-quarter net loss of $174 million, compared to net income of $74 million last year.