Explainer · Industry

Sparrows Point returns to shipbuilding with a submarine yard

Updated October 21, 2026 · Numbers as published by each source on the date shown

Anduril plans to invest $3.7 billion in Arsenal-2, a shipyard of more than 2 million square feet at Tradepoint Atlantic, on the old Sparrows Point industrial site near Baltimore. It will build parts and large assemblies for Virginia-class submarines, with initial operations expected in 2030 and more than 3,100 permanent jobs. The Navy awarded Anduril a contract worth up to $2.9 billion.

What Arsenal-2 is

Arsenal-2 is a new shipyard on a 187-acre site within the Sparrows Point complex in Baltimore County, Maryland, announced on October 6, 2026. Anduril says it will have a 1,200-foot graving dock and road and rail access. Anduril's industrial software will track production across the yard.

The State of Maryland says it is the largest single private investment in the state and its largest job creator in more than a decade.

What it will build for Navy submarines

Virginia-class attack submarines are built by General Dynamics Electric Boat and Newport News Shipbuilding. Arsenal-2 will build components and large assemblies and deliver them to those two yards for final assembly, so more of the work can happen in parallel, Anduril says.

Anduril will start with parts like torpedo tubes and wants to work toward submarine modules and, over time, whole hull sections such as bows and sterns, an industry official told USNI News. Torpedo tubes are one of the parts that now limit the pace of building, a senior administration official told reporters. The yard would add about 9 million labor hours a year, or 15% more capacity for the Virginia-class program, the official said.

How the money works

Anduril is putting up $3.7 billion of its own capital. The Navy contract, worth up to $2.9 billion, pays out as Anduril demonstrates production results, so the company carries most of the risk of delivering, Anduril says. Together, Anduril counts this as a $6.6 billion investment in the submarine industrial base.

Maryland and Baltimore County have committed to match up to 13% of Anduril's planned investment through existing incentive programs and new funding, which needs approval from the Maryland General Assembly and the Baltimore County Council. The package includes money for a workforce training center at or near Tradepoint Atlantic.

The site's history in steel and shipbuilding

Sparrows Point sits on the Patapsco River just south of Baltimore. For generations the site shaped America's steel and shipbuilding legacy, Baltimore County Executive Kathy Klausmeier said. It was once home to the Bethlehem Sparrows Point Shipyard, owned by Bethlehem Steel, USNI News notes. Baltimore's shipyards built the first Liberty ship of World War II, and Sparrows Point was once known as the "Patriarch of U.S. Tanker Builders," Anduril says. Today the site is Tradepoint Atlantic, which describes itself as a maritime hub with a deep-water port and rail and interstate links.

Jobs, wages and training

• Direct jobs. More than 3,100 new permanent jobs.
• Total jobs. Over 14,000 supported directly or indirectly, the state says.
• Wages and output. About $312 million in wages and over $2 billion in economic output each year.
• Training. Anduril plans to recruit from commercial aerospace and automotive work, high schools and vocational schools, an industry official said.

Timeline to 2030

• Now. Permitting and site preparation begin immediately, with construction starting once approvals are in place.
• About two years before Arsenal-2. A new 160,000-square-foot facility in Orange County, California, will make parts including torpedo tubes and train the first workers.
• 2030. Initial operations at Arsenal-2, with production growing as the workforce and suppliers build up.

The Monday Haul tracks the build and other big projects every week. Past issues are in the archive, and you can follow industry across the country on the live dashboard.

How it fits the push to build more submarines

The Navy wants more submarine-building capacity. Its plan is for the two main shipyards to focus on the work only they can do, such as certain outfitting, assembly, integration and testing, and to send other work out as modules, Vice Admiral Robert Gaucher told Janes. Meeting the Navy's needs and the AUKUS commitment to sell Virginia-class submarines to Australia in the 2030s will take new suppliers, workers and capacity, and Arsenal-2 is one of the new sources.

Common questions

Sources

• Anduril Industries to invest $3.7B, create over 3,100 jobs with new shipbuilding facility, Maryland Department of Commerce, Oct 6, 2026.
• Anduril, U.S. Navy invest $6.6 billion to expand America's submarine industrial base, Anduril, Oct 6, 2026.
• Anduril to build new submarine component facility, Mallory Shelbourne, USNI News, Oct 6, 2026.
• Anduril Industries awarded USD2.9 billion US Navy contract for submarine work, Michael Fabey, Janes, Oct 8, 2026.