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I have asked many Benz mechanics and 3 different dealerships, and they all advise the use of Dexron Mercon 3 ATF in my 87 300E power steering pump.
What do you all think?
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I have run Dexron 3 for years with absolutely no problems. Dexron 3 is 100% compatible with the old "Type A"
specification, which MB used to recommend before switching to their own fluid (which, incidentally, seems to be a relabelled hydraulic oil manufactured by Elf).
If your system has ATF in it now, there's no reason to switch.