Anduril Industries plans to invest $3.7 billion in a submarine-component manufacturing facility at Tradepoint Atlantic, the multimodal logistics development at the Port of Baltimore.

The plant would create 3,100 permanent jobs and return shipbuilding to the former Bethlehem Steel property at Sparrows Point. The 2 million-square-foot facility is expected to begin initial operations in 2030.

The Arsenal-2 project will manufacture components for the U.S. Navy’s Virginia-class nuclear-powered attack submarines to be shipped to Huntington Ingalls (NYSE: HII) in Newport , Va., and General Dynamics (NYSE: GD)Electric Boat in Groton, Ct., for final assembly.

Anduril initially expects to produce smaller components, including torpedo tubes, before expanding into larger submarine sections such as bows and sterns.

The Navy has awarded Anduril a $2.9 billion contract, according to a company announcement. President Donald Trump was scheduled to visit Tradepoint Atlantic on Oct. 6 to promote the project.

The contract  is controversial, having been awarded just days after Anduril co-founder Palmer Luckey was appointed along with Elon Musk and former Republican Congressman Newt Gingrich to a Pentagon weapons advisory group. It also comes weeks ahead of the midterm elections where incumbent Democratic Gov. Wes Moore is on the ballot, along with eight seats in the House of Representatives.

Maryland officials told local media the development is the state’s largest single private investment and its largest job-creation project in more than a decade. The project is expected to support more than 14,000 total jobs, including the permanent positions at the facility, according to a Maryland Department of Commerce announcement. Anduril estimates it will generate more than $2 billion in annual economic output and about $312 million in annual wages.

“With this facility, thousands of Marylanders will have new pathways to work, wages and wealth through advanced training and high-skilled maritime manufacturing jobs,” Gov. Wes Moore said in the announcement.

Return to shipbuilding

The facility will occupy the general area of the former Bethlehem Steel shipyard, reconnecting Sparrows Point with the maritime manufacturing activity that once helped define the site. Tradepoint Atlantic acquired the property in 2014 and has since redeveloped it into a logistics hub with warehouses, distribution centers and marine operations.

Mediterranean Shipping Co., the world’s largest container line, broke ground earlier this year for a new $1.2-billion box terminal at the site.

Public incentives require approval

Maryland and Baltimore County have committed to matching up to 13% of Anduril’s anticipated private investment through existing incentive programs and new appropriations. Portions of that support will require approval from the Maryland General Assembly and Baltimore County Council.

Baltimore County’s proposed contribution includes a personal property tax incentive worth up to $210 million over 30 years, WYPR reported.

The state package also includes capital support for a workforce-training center. Maryland plans to seek a federal Maritime Prosperity Zone designation for the region.

Port and rail access

Tradepoint Atlantic’s deepwater port, rail and highway connections, and access to a large regional workforce helped attract the investment, officials said. Anduril also cited the East Coast location’s proximity to other submarine contractors as a factor in selecting Maryland after considering sites elsewhere in the country.

The 3,300-acre logistics and industrial complex is part of the Port of Baltimore. Its marine terminal and private railroad provide waterfront access, commodity storage and connections to both CSX (NASDAQ: CSX) and Norfolk Southern (NYSE: NSC)

Anduril has signed a long-term lease at Tradepoint Atlantic, although the company has not disclosed its duration. The manufacturing operation is expected to expand in the years following its planned 2030 opening.

Read more articles by Stuart Chirls here.

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