Promising a steady transition through the new era of tighter defense budgets, Martin Marietta President Norman R. Augustine took the helm yesterday as chief executive of the Bethesda-based aerospace giant.

In a move that has been expected for more than a year, Martin Marietta's board elected Augustine, 52, a former undersecretary of the Army, to succeed Thomas G. Pownall as CEO. Pownall, 65, will remain as chairman indefinitely.

At the same time, the board named executive vice president Caleb B. Hurtt, 56, as the company's new president and chief operating officer.

The changes place Augustine at the helm of one of the country's largest defense firms at a time when military budgets are being squeezed and many industry analysts are predicting leaner times for major contractors. They also come just two days after Martin Marietta suffered one of the most serious blows to its prestige in years, losing out to rival Boeing Aerospace in the competition to build the living quarters and laboratory for NASA's space station.

The loss of that contract will leave Martin Marietta, which has long prided itself on being a key player in the nation's manned space program, without any major role in the space station project.

In a brief interview yesterday, Augustine acknowledged that the space station loss was "certainly ... a major disappointment," adding that "in terms of manned space, inevitably, we'll be doing less than we would have."

But he emphasized that Martin Marietta's space operations still have work -- the production of Titan missiles for the Air Force and the external fuel tanks for NASA's shuttle, for example. It will also continue to bid on important new space contracts, he added.

Augustine said he believes the firm is particularly well situated to cope with tighter Pentagon budgets because its programs are well diversified, particularly in the conventional warfare area. He cited, for example, the Army's selection of Martin Marietta to build its ADATS air missile defense system, in conjunction with a Swiss firm, to replace the canceled Sgt. York gun.

"Clearly, I'm taking over a time when the industry is entering a challenging period," said Augustine. But he added, "We believe all the key programs we're involved in are ones that are fairly critical to the defense of the country. There are none that are in grave jeopardy."