Anduril’s $6.6B Shipyard Targets Virginia-Class Sub Backlogs
On Tuesday, Oct. 6, the Trump administration, the Navy and Anduril Industries unveiled Arsenal-2, a planned shipyard at Sparrows Point in Baltimore County, Maryland, designed to make parts for Virginia-class attack submarines. Anduril will invest $3.7 billion of its own money, and the Navy awarded the company a contract worth up to $2.9 billion, putting the combined figure at up to $6.6 billion, Reuters reported.
It is a bet that a company known for drones and software can help fix one of the Navy's most stubborn industrial problems: building attack submarines fast enough.
President Donald Trump called it "the largest new shipyard in the United States"Â and said nothing like it had been launched since World War II. The site covers more than 2 million square feet on 187 acres and includes an existing 1,200-foot graving dock. Operations are targeted for 2030.
Arsenal-2 will not build whole submarines at first. It will start with torpedo tubes and spherical air flasks, then move toward larger modules such as bows, sterns and full ship sections, The War Zone reported. Finished parts would go to the two yards that assemble Virginia-class boats, General Dynamics Electric Boat and HII's Newport News Shipbuilding. Anduril already runs Arsenal-1 in Ohio, a $1 billion plant producing autonomous combat drones.
The Navy's money is tied to results rather than effort. Local reporting says payments are tied to production outcomes, and Anduril's Christian Brose told Reuters the arrangement amounts to the government buying what the facility produces. Maryland and Baltimore County added incentives of up to 13 percent of Anduril's investment, roughly $481 million.
Officials project about 3,100 direct jobs, more than 11,000 indirect jobs and about $2 billion in annual economic output. Those are projections, not results.
The Virginia-class problem is rate. The Navy wants two boats a year, plus a Columbia-class ballistic missile submarine. Anduril's framing is blunter: the U.S. "needs an output of 2 to 3 Virginia-class submarines a year", and it says the country builds "barely one." That is a company claim, and it runs higher than the Navy's own two-a-year goal.
The Navy's numbers are not far off. In May, USNI News reported production at about 1.3 Virginia-class boats per year, with Chief of Naval Operations Adm. Daryl Caudle saying the Navy expects to reach two a year around 2032. The War Zone put the rate at 1.1 to 1.2 since 2022. The sources differ slightly, but all agree the Navy is short of its goal. A senior administration official said the new yard would add about 9 million labor hours a year, roughly a 15 percent increase.
The event drew a fight. The Baltimore Banner reported that Maryland Gov. Wes Moore was removed from the speaking program at the White House's direction on Monday afternoon. A White House official said Moore had been invited as a guest.
Moore confirmed his absence was "at the direction of the White House", according to Maryland Matters, which also reported that his administration had spent about a year negotiating the state's role. A White House response, as reported there, called his complaint "throwing a tantrum." The Banner added that Rep. Johnny Olszewski Jr. sent staffers instead and Rep. Sarah Elfreth withdrew.
Anduril founder Palmer Luckey is one of three co-leaders of Project Meridian, announced Sept. 30 with Elon Musk and Newt Gingrich as a 120-day study of future warfare. The Arsenal-2 award came six days later. None of the sources reviewed for this article alleges the two are connected, but the timing will draw scrutiny given Luckey's role.
There is also unresolved history. In August, Luckey publicly disputed a Wall Street Journal report that Anduril was negotiating a drone-boat factory at Sparrows Point, writing on X that the story was false. The announced project is submarine parts, a different product, and no reporting reviewed here reconciles the two accounts.
Arsenal-2 is a large, specific commitment aimed at a real bottleneck, with private capital carrying part of the load. What is confirmed is the money, the location, the products and the target date. What is not confirmed is whether the parts will be certified, whether the workforce will materialize, and whether the yard will move the Navy's production rate before the early 2030s. Those are the numbers to watch.