Electrolux said in February that it was considering closing its vacuum cleaner factory in the southeastern town of Vaestervik, where it is the largest private employer, in an attempt to save money on lower salaries in the eastern European country.

According to a report in Swedish daily Dagens Nyheter on Wednesday, however, the plan to move more than 500 jobs to Hungary is part of a larger strategy to convince that country to purchase the 14 Jas 39 Gripen fighter jets it is currently leasing from Sweden.

"The fact that Electrolux made this decision (to move from Vaestervik to Hungary) will be counted in (the Jas deal)," Electrolux CEO Hans Stråberg told Dagens Nyheter.

In 1995, Electrolux and some 40 other Swedish companies said they would participate in so-called "offset" deals, in which the business they do in potential Gripen buyer countries counts in favor of a contract for the Swedish fighters.

"Anything we produce in Hungary is counted in, so it would be strange if moving our factory there, if we decide to do so, doesn't count as well," Electrolux spokesman Jacob Broberg told AFP.

He insisted however that a possible Swedish fighter jet deal would have nothing to do with Electrolux's final decision on whether or not to move its factory.

"Any decision we make is made for our own business reasons. We don't get anything out of a Jas Gripen deal, so that's not why we would do this," Broberg said.

WAR.WIRE