UPDATE 2-Lockheed sets leadership changes in aeronautics

* Crowley appointed division operating chief as of June 7

* Lawson moves to F-35 program from F-22

* Analyst says move surprising given F-35 problems (Adds analyst comment)

ATLANTA, May 3 (Reuters) - Lockheed Martin Corp (LMT.N) on Monday promoted the executive in charge of its F-35 fighter program, which is under scrutiny for cost overruns and schedule delays, to head its aeronautics division.

Dan Crowley, who has been executive vice president and general manager of the embattled F-35 program since May 2005, will become chief operating officer of aeronautics effective June 7, Lockheed said in a statement.

Larry Lawson, who has served as general manager of the F-22 Raptor program since December 2004, will become general manager of the F-35 program, Lockheed said.

The Pentagon restructured the $300 billion F-35 program earlier this year and withheld up to $614 million in award fees from Lockheed because its performance undercut expectations.

The company is beginning to shut down the production line for the radar-evading F-22 after years of fighting to sell more of the most advanced fighters in the world to the government.

The F-35, also known as the Joint Strike Fighter is in development with eight foreign countries. Slated to replace over a dozen aging fighters worldwide, it will become the world's largest military fighter aircraft program.

The Pentagon's No. 1 defense contractor also said that George Shultz, vice president and deputy general manager of the F-22 program since November 2008, would take over as general manager of that program in June.

Chris Hellman, defense analyst and director of research at the National Priorities Project, said the news of Crowley's promotion was surprising, given cost overruns of nearly 50 percent on the F-35 program.

"Given the recent problems with the program it's hard to avoid the perception of rewarding poor management," Hellman said, noting that for years, Lockheed had been promoting the F-35 as a low-cost alternative to the more expensive F-22.

"When one of your selling points is the affordability of the aircraft, cost growth on the order of magnitude of 50 percent is a serious problem," Hellman said.

Lockheed Chief Executive Robert Stevens told reporters in March that he had absolute confidence in Crowley, despite problems with the program, although he had made changes to increase corporate oversight.

Defense Secretary Robert Gates in February removed the Marine Corps general who was running the F-35 program for the Pentagon. His successor, a Navy admiral, has been appointed, but not yet confirmed by the Senate. (Reporting by Karen Jacobs and Andrea Shalal-Esa; Editing by Richard Chang)