Aerospace company Grumman Corp., after initiating negotiations just weeks ago, yesterday said it would not proceed with a bid for Fairchild Republic Co., the Long Island-based aircraft division of Fairchild Industries Inc.

Grumman issued a statement late yesterday in which Chairman John C. Beirwirth said all talks had stopped with Chantilly, Va.-based Fairchild for the acquisition of Fairchild Republic. The division makes the T46A jet trainer for the Air Force. The Defense Department has proposed cancelling the contract for the 1987 fiscal year.

"I'm sorry that we were not able to fit Republic into our operations," said Beirwirth. The acquisition "would have placed additional demands on our people as well as on financial and technical resources for which we see future opportunities." Such an acquisition "would have changed the direction of plans we have for the near future." The company would not elaborate further.

Fairchild Industries spokesman William Fulwider said, "We thought Fairchild would be a good fit for Grumman but understand they have to do what is best for their future."

The company is continuing to seek buyers or partners for the division put up for sale in October. At that time, Fairchild was having financial difficulty because of unforeseen problems in its aircraft businesses. In the third quarter, it announced net losses of $77.6 million ($5.89 a share) on revenue of $228.5 million, after taking $152 million in tax write-offs to cover losses in its T46A and other programs.

"We are having discussions with another entity," said Fulwider. He would not name the company. Fairchild has had as many as five suitors recently for the division, among them Boeing Co. and Grumman. Boeing pulled out of discussions recently, and the pool of interested buyers is now down to one, Fulwider said.

Fairchild said yesterday that the company would consider keeping the division, pending the outcome of the T46A contract.

"With the restructuring of the 340 [commuter plane operations], the recapturing of excess employe pension fund assets, the sale of certain other assets which did not fit in, and a new $75 million credit agreement which replaced an old one, we're stronger financially," Fulwider said. The company recently pulled out of its joint venture with Saab Scania to manufacture a 35-passenger commuter plane and has become a subcontractor on that project.

Fairchild is "continuing with our effort to keep the T46A viable," he said. "We believe the Air Force needs the trainer and . . . we think it will be funded."

Analyst Wolfgang Demisch of First Boston Corp. said yesterday that if the Air Force decides not to reinstate the trainer for 1987, "it leaves them with declining business operations" at the division. Selling the plant then will be "more tricky," he said, suggesting the plant could be shut down.