Anduril Industries announced on October 6 that it will invest $3.7 billion to develop a 2 million square meter submarine component manufacturing complex at Sparrows Point in Baltimore County, Maryland, expanding the production capacity of the US Navy’s Virginia-class nuclear-powered attack submarines.
The project, called Arsenal-2, will occupy a 187-acre site at Tradepoint Atlantic, the former Bethlehem Steel industrial complex in southeast Baltimore. Costa Mesa, Calif.-based Anduril plans to occupy the property on a long-term lease, company president Christian Brose told reporters. The term of the lease and financial terms were not disclosed.
Permitting and site preparation are expected to begin immediately, and construction will begin once the necessary approvals are secured. Anduril is targeting initial manufacturing operations in 2030, while Defense One reported that the company expects to begin in early 2027.
The planned complex will include high-level assembly rooms, adjacent manufacturing areas and reconfigurable production lines designed to accommodate large subsea components. The site also has a functional 1,200-foot burial dock, although Anduril has not specified whether it will require modifications for the new operation.
Anduril said the Navy has awarded it a production contract worth up to $2.9 billion, with payments tied to demonstrated manufacturing results. The deal is separate from the company’s $3.7 billion private equity investment and is not a construction appropriation. Anduril has not disclosed how much of its investment will be used to build the complex.
President Donald Trump said during the Oct. 6 announcement that American taxpayers will receive a 40 percent stake in the shipyard. Anduril later clarified that the stake would remain in a subsidiary established to operate Arsenal-2, rather than in Anduril itself.
Financing, delivery and risk allocation
“Tradepoint Atlantic is uniquely designed for this mission,” CEO Kerry Doyle said in a statement. “Our strategic East Coast location, deep-water port, robust rail and interstate connections and access to a world-class workforce make this one of the most capable industrial locations in the country.”
President Donald Trump speaks at a maritime manufacturing event Oct. 6 in Baltimore, where he announced a 40 percent federal stake in the entity that will operate Anduril’s planned Arsenal-2 shipyard. The Navy also awarded Anduril an independent production contract worth up to $2.9 billion.
Photo courtesy of the White House
It is unclear whether Arsenal-2 will require dredging, new docks, electrical substations or other major infrastructure improvements beyond the existing facilities at Sparrows Point. ENR’s request for clarification was not immediately responded to.
The design of the shipyard aims to minimize the distances between the manufacturing, assembly, testing and integration areas, reducing staging and material handling delays that limit conventional shipyards.
Anduril plans to incorporate its industrial software platform, ArsenalOS, to coordinate manufacturing, material movement, inspection, quality control and production documentation.
Complex submarine components and large assemblies manufactured at Arsenal-2 will be delivered to HII’s General Dynamics Electric Boat and Newport News Shipbuilding, which build Virginia-class submarines.
“This facility will make Baltimore County a critical part of the U.S. submarine industrial base, adding the production capacity the Navy needs to meet its Virginia-class requirements,” Anduril co-founder and CEO Brian Schimpf said in a statement.
A senior Trump administration official estimated that Arsenal-2 would add approximately 9 million man-hours annually to the undersea industrial base, increasing the production capacity of the Virginia class by 15 percent. The additional capability is intended to help the Navy meet domestic fleet requirements and future submarine commitments to Australia under the AUKUS security partnership.
The Maryland project follows a manufacturing expansion in Orange County, California, where Anduril is establishing a 160,000-square-foot facility to qualify production processes and manufacture Virginia-class components, including torpedo tubes. This operation is intended to provide approximately two years of manufacturing experience prior to the opening of Arsenal-2.
Economic impact and what comes next
Maryland and Baltimore County have committed economic incentives worth up to 13% of Anduril’s anticipated private investment through existing programs and proposed allocations, some of which require approval by the Maryland General Assembly and Baltimore County Council.
Baltimore’s functioning waterfront in 1968 included shipbuilding and repair facilities along the inner harbor, shown here with ships occupying several dry docks.
Courtesy of the Baltimore Museum of Industry
Baltimore County’s proposed contribution includes an estimated $210 million personal property tax credit over 30 years. House Bill 100-26, introduced Oct. 5, would provide a 100 percent county personal property tax credit for eligible marine manufacturing equipment, including cranes, material handling systems, dry docks and specialty manufacturing machinery. The measure faces council work sessions on October 13 and 27, with a final vote scheduled for November 2.
The broader incentive package includes capital support for the construction of a workforce training center of excellence at an undetermined location at or near Tradepoint Atlantic. Officials have not announced a budget or construction schedule for the facility.
The project is expected to create over 3,100 permanent jobs and support over 11,000 additional indirect jobs. State officials estimate annual economic output to exceed $2 billion, including approximately $312 million in wages.
