I’m a mechanical engineer working in aerospace (I’ve also worked in automotive, construction equipment, ag equipment, consumer products, stress analysis conslutting) and what the o.p. says is definitely not true in general form; I’ll take a 10 year veteran who can sit down and start digging into work his first day over any three new graduates who will need their hands held on the way to the bathroom for the next year and a half before they can even start to be productive. And, to echo SmackFu, it isn’t as if you come out of school equipped with all these great skills employers need unless you’ve otherwise gained them through co-ops and internships; engineering school will teach you the basics of what you need to know in mechanics, electrical theory, programming, or whatever your discipline is, but they’re not vocational schools and they’re not going to teach you the nuts and bolts stuff like how to scope bills of material, make sense of an interface control specification, or parse some semblance of usefulness out of a poorly documented application programming interface. I think the most “useful” (i.e. practical) things I did in school was in a controls lab learning how to program PLCs using Relay Ladder Logic and State Logic. Guess one of the few technical things I’ve never been required to do in my entire career?
On the other hand, I didn’t get any training on a commercial finite element model preprocessor, how to apply a strain gauge, or how to read instruction manuals written in Polish, and of the computer languages I learned in school (FORTRAN, Pascal, C, Ada, Lisp, QuickBasic) the only one I use now with anything approaching regularity is FORTRAN, and that only for reading legacy code; all of the (admittedly limited) app scripting and CGI work I do is in Python, Perl, and PHP. A friend of mine who works at a major computer game producer in the Bay area was recently complaining that the new grads they get don’t even understand how to design a compiled code and deal with hardware memory allocation; they’re all so used to writing JIT interpreted code that they think of hardware as just being another abstraction, and then get a nasty surprise when trying to program graphically intensive rendering algorithms in C++ for a dedicated platform.
There is, however, a problem with older engineers–and by older I mean 20+ years–in that they tend to be more inflexible about learning new skill sets. There is a distinct advantage for youth in this case; they older guys who started out making drawings on a board and then transitioned to AutoCAD or MicroStation had a really difficult time adapting to parametric solid modelers like Pro/ENGINEER or SolidWorks. (On the other hand, the young turks don’t bother to learn a damn thing about producing detail drawings or manufacturing capabilities, so they end up making elaborate solid models that can’t possibly be manufactured from the nonsensical production drawings they shat out.) I expect the same is true in programming; guys that came up doing functional programming in COBOL, FORTRAN, and C did not convert well to object oriented programming methodology in C++ or Java, which is why the exciting jobs in programming tend toward the younger, though there are always niches for people maintaining obsolescent but irreplaceable legacy code.
And I’ll tell you right now we’re desperately trying to hire people with long experience (15+ years) in rocket propulsion, aerospace structures, flight ordnance,
embedded avionics RTS programming, et cetera, but because the field has seen retirements and engineers moving over toward more sexy work with better opportunities for stability and advancement, it is hard to find people with the proprietary skills needed at any salary. The joke is that we don’t actually let anyone retire; they just get to spend a little more time at home but get yanked back in on the consulting leash; we have more emeritus walking around our halls than any three Oxford colleges, and when one of these guys finally retires for good or (more often) keels over it is a mad scramble to find someone who can pick up the slack and try to do half the job. Pretty soon we’re going to be outsourcing this stuff to India and Russia 'cause we don’t have the continuity of legacy skills to do it ourselves.
So, I think the only engineers and programmers that find themselves unemployable after five years of work (in an otherwise employment-rich market) are those who spent five years not acquiring any real skills. We have those, too: we call them the PowerPoint Engineering Group, i.e. Systems. 
Stranger