BETHESDA -- Although deeply disappointed at losing the fight for the Grumman Corp., the top executive of Martin Marietta Corp. says his strategy remains the same -- growth through acquisitions.

But, as the losing fight for Grumman showed, it won't necessarily be at a whirlwind pace and certainly not at any price.

"There will be more acquisition opportunities and, basically, we are on the same path as before," Norman R. Augustine, chairman and chief executive of Martin Marietta, said two days after Grumman announced it would merge with Northrop Corp., Martin Marietta's competitor for Grumman.

"We are in a position where we don't have to do any more acquisitions, which is a wonderful position to be in," Mr. Augustine said.

"We don't have any sense of desperation. We don't have anything to prove."

In fact, despite a rapidly shrinking defense market, Martin Marietta remains remarkably strong, without the pressure felt by some of its competitors, including Northrop, to make quick acquisitions to ensure survival.

Though Martin Marietta is primarily known for its production of Titan rockets and electronic equipment used on fighter planes and military helicopters, Mr. Augustine noted that the company's non-Department of Defense businesses rank it among the top Fortune 150 companies.

With $10 billion in annual revenue, the Bethesda-based company is among the nation's top four defense contractors. It has 100,000 employees and a $16 billion backlog of orders. It posted an operating profit of $788.5 million last year.

Martin Marietta has just about doubled its size over the past 18 months, primarily through acquisitions. In late 1992, it acquired the aerospace division of General Electric Corp. for $3.05 billion. In December, it entered into an agreement to purchase the Atlas rocket production arm of General Dynamics Corp. for $208.5 million. It expects to close on this transaction in the next few weeks.

They were expensive moves, but Mr. Augustine likes to point out the company's current debt-to-capital ratio is in the mid-30-percent range. This would be about half the debt level of Northrop after its acquisition of Grumman. Its lower debt puts Martin Marietta in good position to make more acquisitions when the right opportunity comes along.

With the Grumman fight behind him, Mr. Augustine took time to reflect on the events of the past 30 days and to share his vision of what lies ahead for both his company and the defense industry as a whole.

He also offered some additional insight into the multibillion-dollar bidding war for Grumman and explained his reluctance to

become involved in hostile takeover battles.

And he disagreed with those industry analysts predicting that the days of friendly, negotiated sales in the defense industry are over.

Leaning back in a yellow wingback chair in an office at company headquarters and bringing the fingertips of his hands together before his face, Mr. Augustine spoke about the disappointment of not landing Grumman, the Bethpage, N.Y., company best known for its production of military aircraft, including the F-14 Tomcat.

"We clearly thought we had a very good match," he said. "Almost all of their business aligned with ours."

Both companies, he explained, are involved in the development of such products as aircraft electronics, computerized equipment for the Internal Revenue Service to speed the processing of tax forms, and equipment that can transmit large amounts of information -- sending the entire contents of the Encyclopedia Britannica, for instance, in a second.

While Grumman's information and service businesses are fine businesses, Mr. Augustine said, they are not large. "But if you combined them with our business, you had a quite large critical mass in these two businesses that would have been very strong."

But the price had to be right.

"We knew what [Grumman] was worth and we knew what we were willing to pay. We told Grumman at the very outset that we would not go above $55 a share. We put it in writing, and we meant it."

Defense analysts speculated that Northrop's aggressiveness in going after Grumman was partly driven by a feeling on the part of its chairman, Kent Kresa, that he had been snubbed by Grumman.

The Northrop executive had been holding talks with Renso L. Caporali, his counterpart at Grumman, for about a year and felt he was close to reaching an agreement. Mr. Kresa had said that Northrop was prepared to pay $50 a share and considered paying even more.

Those talks came to an abrupt end in March before Northrop made a formal offer for Grumman. Grumman instead announced it had entered into a merger agreement with Martin Marietta.

Northrop countered with a bid of $60 a share, three days after Grumman and Martin Marietta announced they had reached their agreement.

With two suitors, Grumman's decision was to have both submit their "best and highest offer" in writing. Although Martin Marietta did not increase its bid, Northrop raised its offer to $62 a share, or $2.17 billion, to win the fight.

During a meeting with a group of reporters in Washington Friday, Mr. Kresa said he felt no anger toward Mr. Caporali, who was at the meeting, or Mr. Augustine. He said he had not talked to anyone within Grumman about those earlier merger discussions and doubted that he ever would raise the issue.

Mr. Kresa did not want to discuss the events leading to the $62 bid, saying that he wanted to look ahead, not back.

Separately, Mr. Augustine is also looking ahead.

He said that Martin Marietta will continue to look for acquisitions closely related to its defense and nondefense businesses.

Asked about published reports that the local Westinghouse defense unit, the ITT Corp.'s defense electronics division, the Harris Corp., and Texas Instrument's missile division were all on its shopping list, the Martin Marietta executive said he would not comment on specific cases.

He said, however, that there is a group of people within the company whose job it is to look for acquisition prospects. "We constantly go through all of these possibilities and more," Mr. Augustine said.

Throughout the proxy fight for Grumman, analysts kept waiting for Martin Marietta to turn its considerable financial firepower toward Northrop and declare an all-out war.

There were even predictions that Martin Marietta would move to acquire Northrop, the Los Angeles-based company best known for its B-2 stealth bomber.

After all, Martin Marietta was the inventor of the so-called "Pac Man" defense -- turning the tables on an attacker by taking them over -- in the early 1980s when it came under attack by Bendix Corp.

But this time, to everyone's surprise, Martin Marietta turned away from the opportunity for a fight.

There were a couple of good reasons for this, Mr. Augustine said. "We lived through one of those and we saw how devastating it can be. It took us almost seven years to financially recover from what Bendix did to us. The impact, the toll on our company and our people was really . . . it was devastating."

The battle with Bendix left Martin Marietta with a dangerously high 82 percent debt-to-capital ratio and forced it to sell three of its five major business groups -- chemicals, aluminum and cement -- to survive.

"It totally changed the character of our company even though we prevailed in the end," Mr. Augustine said.

"That [Bendix] experience clearly led me to believe that strategic alliances put together quietly among thoughtful managements is better way to build the future of American industry rather than a bunch of investment bankers and arbitrageurs deciding who wants to put the most debt on a company."

Another reason for avoiding hostile fights, he said, has to do with his belief that the defense industry has fiduciary responsibilities that go beyond those of other businesses.

"For defense companies to send the signal that they have money to throw around buying each other up like cigarette companies or movie companies . . . is not conducive for public support for spending money to build national defense."

Major defense changes

The nation's defense industrial base will be going through major changes over the next five years, according to Mr. Augustine.

As he sees it, there is just not enough money in the Pentagon budget to support the current number of defense contractors.

Within five years, he foresees there being only two manufacturers of fighter planes, two of military transport planes, and only two or three spacecraft manufacturers.

"Hopefully," he said, "there will be one submarine manufacturer and one tank manufacturer. It could turn out to be zero. Very few areas of defense, other than the broad [field of] electronics, will have more than two or three participants."

Over this period he thinks the defense industry will go through a three-phase consolidation.

In phase one, which has passed, companies like Ford Motor Co., IBM and General Electric, who were in defense as sidelines, got out.

In the second phase, now under way, some of the midsize and small companies will realize they will keep shrinking unless they do something, Mr. Augustine said. "This is the phase where I think there will be a degree of desperation."

In the future, he expects the industry to move into the third phase, in which the very large companies will come together to become even bigger and stronger.

Mr. Augustine sees his own company as one of the survivors. He said it is not a question of whether Martin Marietta will be one of the survivors but how strong a survivor it will be.

And if the fight for Martin Marietta's survival turns ugly, Mr. Augustine issued a warning to any potential attackers: "But I don't want anybody to misunderstand, if we ever felt that our interest was threatened, we would take the necessary steps to resolve it.

"We would not launch the first strike, but if it came to nuclear war, we would participate."