Anduril plans to invest $3.7 billion at Sparrows Point, on ground where Maryland Steel established a shipyard in 1891. Its October 6 announcement calls for more than two million square feet of manufacturing space across 187 acres in Baltimore County, beside the graving dock Bethlehem Steel used to build tankers.
Arsenal-2 will supply components and large assemblies for Virginia-class attack submarines, with General Dynamics Electric Boat and HII’s Newport News Shipbuilding retaining final assembly. Anduril says its Navy contract is worth up to $2.9 billion, with payments contingent on demonstrated production outcomes. Initial operations are expected in 2030, followed by a gradual increase in production as the workforce and facilities develop.
Anduril would enter a program with established designs, funded orders and two experienced final-assembly yards. The Navy should make that kind of entry attractive to more American companies, using its purchases to bring new capital and new manufacturing methods into submarine construction. We need an American maritime industry that keeps expanding and improving as China builds the naval power it uses to pressure its neighbors.
Before the submarines
The steamship that made the Panama Canal’s inaugural transit on August 15, 1914, came from Sparrows Point. Maryland Steel had launched it as the Shawmut in 1901, years before it became the Ancon.
Bethlehem acquired the shipyard and adjoining steelworks in 1916. The yard built merchant vessels through the First World War, then produced 101 ships during the Second World War with as many as 8,000 workers. In 1953, it led the world in new ship construction by deadweight tonnage.
Bethlehem owned both the yard and its principal source of steel, with the mill next door supplying material for ship construction. Beginning with 28,000-deadweight-ton tankers in 1949, the company developed ten standard tanker designs as demand grew. Bethlehem invested in facilities for those vessels, including the graving dock Anduril now proposes to use.
Bethlehem launched its last newly constructed ship at Sparrows Point in 1990 and sold the yard in 1997. Its successor, Baltimore Marine Industries, entered bankruptcy in 2003 after a prospective cruise-ship customer failed to secure financing and the yard was left with little work. Steelmaking on the larger property ended in 2012.
New ownership began redeveloping the 3,300-acre property in 2014 into what became Tradepoint Atlantic. Port operations and logistics businesses made use of the waterfront, highway access and rail connections to CSX and Norfolk Southern. That redevelopment kept the property in commercial use and gave Anduril an operating industrial site around which to build its factory. As America expands naval production, it should make more use of industrial land whose waterfront and transport connections would be difficult to assemble again from scratch.
Building for the Pacific
At China’s Changxing Island shipbuilding complex in Shanghai, commercial vessels and naval surface combatants appear together under construction in satellite imagery analyzed by the Center for Strategic and International Studies. Researchers documented a similar arrangement at Longxue Island in Guangzhou in their March 2025 study. Both sites belong to the state-owned China State Shipbuilding Corporation, which builds merchant ships for foreign customers alongside vessels for the Chinese navy. Overseas orders help sustain an industrial system serving Beijing’s military ambitions.
The Pentagon’s 2025 China military report describes the Joint Sword exercises of 2024 as rehearsals for maritime and air superiority, a blockade of Taiwan’s key ports and precision strikes on the island. Beijing has been developing the forces to coerce a self-governing democracy and obstruct American intervention. The United States and its allies need the means to prevent the Chinese Communist Party from deciding who can trade, travel or govern themselves in the region.
Admiral Samuel Paparo identified American undersea dominance as an advantage in deterring aggression against Taiwan during his April 2025 Senate testimony, while warning that the margin was shrinking. Preserving it requires submarines available to commanders, supported by an industry that can build their successors. American engineers have spent decades developing these boats, and the country ought to be able to manufacture enough of them to sustain the advantage their work created.
In April 2026, the Congressional Budget Office reported that attack-submarine production had averaged 1.1 boats annually over the preceding two years, although the Navy had generally been purchasing two a year. CBO also put Virginia-class construction an average of four years behind the delivery dates specified in the original contracts. Those delays deprive the fleet of submarines Washington has already decided it needs, prolonging a shortage while China’s naval industry continues to develop.
Electric Boat and Newport News must also build twelve Columbia-class ballistic missile submarines to replace the Ohio class. The Navy’s baseline production goal is one Columbia and two Virginias annually, drawing on many of the same trades and suppliers. Columbia supports the nuclear deterrent, so Washington has to expand attack-submarine output alongside a program it cannot casually postpone.
Under AUKUS, the security partnership with Britain and Australia, the United States intends to sell Virginia-class submarines to Australia. Replacing those boats raises the American production requirement to roughly 2.33 annually. We should be able to equip an ally strengthening the defense of the Pacific while maintaining our own fleet. A larger American submarine industry would give Washington more ability to sustain both commitments as Beijing expands its military power.
Room for another builder
Austal already builds and outfits submarine sections in Alabama, then ships them by barge to a prime yard for integration. CBO counts more than twenty companies participating in outsourced construction for Electric Boat and Newport News. Anduril would join that network with a new factory and its own capital, adding manufacturing in Maryland to a program whose final-assembly yards are in Connecticut and Virginia.
CBO estimated that approximately 70% of suppliers of critical submarine components had no competitors. The Navy should use its unfilled demand to attract American firms willing to establish qualified production, including companies that developed their manufacturing methods in other industries.
Anduril says it intends to recruit from commercial aerospace and automotive companies, as well as high schools and vocational schools. Maryland has proposed a workforce training center at or near Tradepoint Atlantic to help prepare people for the new manufacturing jobs. CBO described a generation of longtime shipyard workers retiring, leaving crews at many yards less experienced. A factory at Sparrows Point should give more Marylanders the opportunity to learn those trades and develop careers making the equipment their country needs.
Building the yard
The Maritime Administration’s 1972 annual report described Sparrows Point’s new plate-cutting and blasting equipment, along with a panel shop capable of handling ship subassemblies weighing 200 tons. Bethlehem equipped the yard to fabricate larger sections and build the tankers its customers were ordering. Anduril now proposes to arrange new fabrication areas beside high-bay assembly halls, shortening the distances between fabrication, assembly, testing and integration.
Anduril calls its proposal a software-defined shipyard, with reconfigurable production lines and ArsenalOS connecting fabrication and outfitting to material movement, inspection and documentation. Its plans include digital work instructions, sensing and embedded quality controls. The Navy’s SUBSAFE program requires traceable evidence of the material and work performed on covered components, so the software will have to support the records required to qualify production.
Anduril plans to manufacture Virginia-class components, including torpedo tubes and test assets, at a separate 160,000-square-foot facility in Orange County, California, two years before the Maryland yard opens. A company spokesperson has confirmed that the California facility is SUBSAFE certified, and Anduril has already started building torpedo-tube prototypes there. The company says the earlier operation will give it time to develop manufacturing methods and train the workforce before Arsenal-2 opens.
Anduril intends to take on more complicated modules and eventually hopes to manufacture entire hull sections. Its engineers would develop production methods against existing submarine designs, learning to build more of the boat as the company proves itself to the Navy and its prime contractors. Additional manufacturers with that experience would give the Navy more firms to draw on for future weapons and submarine designs.
Orders worth investing in
Anduril says it will bear most of the execution risk under a contract that links Navy payments to production outcomes. President Trump announced a 40% government stake in the shipyard, and Anduril has since clarified that the stake would be in a new subsidiary created to operate Arsenal-2. The government should publish the rights accompanying that stake and explain how the ownership arrangement relates to the production contract and the company’s private investment.
The Navy plans to keep buying Virginia and Columbia submarines after Arsenal-2’s target opening, while replacing the boats it sells to Australia. Contracts covering successive production runs would help manufacturers finance expansion and retain trained crews, with further awards dependent on cost, quality and delivery.
Anduril said in its October 6 announcement that permitting and site preparation would begin immediately, with construction following the necessary approvals. Maryland and Baltimore County should organize the reviews they control around the proposed operating date, while Anduril supplies complete plans and resolves outstanding requirements.
The basin is still there
The graving dock entered service in 1971. At 1,200 feet long and 200 feet wide, it accommodated Sparrows Point’s 265,000-deadweight-ton tankers, with an intermediate gate allowing crews to divide it for smaller vessels. In 2020, the floating dry dock Titan arrived for repairs. Bethlehem had built a dry dock large enough to dry-dock another dry dock.
Anduril identifies the basin as an asset for moving large components, although it hasn’t published a detailed operating plan for it. Its proposed manufacturing halls would stand beside infrastructure built for an earlier generation of ships, within a property that Tradepoint has kept in commercial use. The Navy’s orders now give a new American manufacturer a reason to invest there, and Maryland has the opportunity to help thousands of people enter the work.
Anduril’s engineers and crews should be able to build on that experience as the company earns further orders, refining the factory and learning to manufacture more complicated assemblies. Other qualified American companies ought to have opportunities to enter the business and grow alongside it. As Beijing expands the fleet it uses to pressure its neighbors, the Navy’s submarine purchases should leave America with more qualified manufacturers and more people trained to construct its next generation of submarines.