Tough Going At Boeing

One of this country's biggest employers is going through some hard times. The government has just begun an examination of the Boeing Company, after a string of embarrassing production slip-ups. And that's not all, as CBS News' Anthony Mason reports.

With the FAA launching a review of its production and quality control systems, this week, its engineers overwhelmingly rejecting a new contract Wednesday and the mysterious crash of one its 767's on Halloween, the world's largest aerospace company has hit some heavy turbulence.

But aviation analysts like Chris Mecray believe Boeing has even bigger problems ahead. "If you take the 50,000 foot view point, the company's been taken off a pedestal," he says.

Boeing is still America's largest exporter. It had 57 billion dollars in revenue last year. But, plagued by production problems, it eked out only one billion dollars in profit.

And in the dogfight with its European rival Airbus, Boeing has been losing. Airbus has won half of all aircraft orders this year. Not long ago, Boeing owned the market. "With Boeing well over 70% market share, who would have thought that they'd be down to 50% within half a decade?" asks Mecray.

"There's a battle going on out there and it's pretty intense," says Aviation Week's David Hughes. And Airbus may be about to launch its biggest challenge: the A3XX, a 600 passenger super jumbo. It's still in the dream stages but, according to Hughes, "If they go ahead with that, it's a challenge to Boeing's dominance with the 747."

The 747 has been Boeing's cash cow. It would have to answer with its own super jumbo, which could lead to a showdown. "It's going to be a kind of 'bet the company' situation for both Airbus and Boeing," Hughes says.

Boeing has preliminary plans for a 500 seat 747 stretch. For all its troubles, Boeing remains a superpower in the skies -- but maybe not a flying fortress anymore.