Here is an interesting excerpt from an article that has been floating around for years on on the topic of IWC and what they do with base movements before calling it their own:
Many watch manufacturers purchase their calibres from the serial base calibre manufacturer ETA. ETA offers a wide variety serving most needs. However, for many watch collectors seeking limited production calibres, this is just the reason to avoid buying a watch with an ETA movement. What if a renowned manufacturer such as IWC Schaffhausen would use the actually very good and tested ETA Valjoux 7750 for its chronographs, after undertaking numerous modifications? What speaks against the ETA movement? Actually, only the fact that it is widely used and therefore not very exclusive. In turn, what speaks for the ETA movement is that, due to the high production, it is a mature and technically impeccable movement. There are no “infant illnesses” and it is constantly developed further. Why therefore should IWC overlook the best serial chronograph-movement? Obviously, there are other alternatives, however, from an economic and technical standpoint, the decision for the Valjoux is guaranteed to be the right move.
Now, what does IWC do with this calibre, and why do they treat it as if it were their own movement? The explanation is pretty simple: IWC purchases the best serial engine and undertakes on that basis the best possible engine tuning. You could say that IWC does what AMG does with Mercedes engines, Alpina with BMW or Abt with VW or Audi engines. Serial engines are used, which in turn are tuned and optimized with the best experience available. -Uhrenjournal