"Failing calc 1 is usually not a good sign."
That sounds a little harsh, it may be a minor setback but I wouldn't make it sound like just because he failed calc 1 that chances are it's all over.
OP - I know at my college, and I think at most others too, that if you repeat a class your GPA for that class will be replaced, it will probably still show on your transcript but if you get an A the next time around I'm pretty sure it will just be overlooked (the F on the transcript I mean)
That was your first semester, college is a totally different animal from highschool, you really have to put the time in to studying and a lot of times it takes students a semester or so to learn that, so don't get too discouraged. Just retake the class and study like it's your job, form study groups, buy tutor DVDs, whatever it takes man. That's what it's all about. Keep in mind you chose engineering, it's a really tough major. You gotta put the time in.
As for getting a 3.5+, it'll take a lot of hard work but it can be done, you've only done 1 semester so far. Once that F gets wiped off your GPA should shoot back up but you gotta get those other grades up too. Shoot for A's, do extra credit, ask your professors for help, etc.