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In response to the Stock Market crash of 1929 and the resulting downturn in the World's economy. Mercedes was forced to temporarily stop their racing program. Their team manager, Alfred Neubauer lived for racing and the idea of being re-assigned to some factory or even worse desk job held no appeal for him. When directing the racing team, Neubauer's word was law, now he would be just another worker among the masses but the new Auto Union team had approached him with a invitation to join them. Could he really leave Mercedes after all these years. Auto Union promised to embark on a future racing program but the future of Mercedes, at least when it came to racing was at best uncertain. Neubauer met with the managing director of Auto Union, Klaus von Oertzen. That night Neubauer wrote a letter of resignation to Daimler-Benz.

After much discussion the decision was made at Untertürkheim to build a new 750 kg Grand Prix racing car for the 1934 season. Behind locked doors and barbed wire fences the work was started to build cars that would forever change the face of automobile racing.

Initially the overall responsibility for Mercedes' racing efforts was held by Dr Hans Nibel but after his untimely death from a stroke in November 1934 that duty was assumed by Max Sailer. During their peak years of 1937-38 the team was divided into three main departments, headed by Fritz Nallinger who was in charge of Design, Rudolf Uhlenhaut of Construction and Preparation and Alfred Neubauer of the Racing Department. The Design department was sub-divided into two main sections, Engines under Albert Heess and Chassis under Max Wagner (who ironically, while at Benz, was involved in the design of the famous rear engined Tropfenwagen)

In contrast to modern practice the cars were prepared for each circuit back at the factory and the practice periods during the race weekend was used mostly for driver familiarization. George Monkhouse, the English photographer and writer, told of seeing an enlarged map of Donington Park pinned to a drawing board with all the corner radii and gradients marked and measured off, enabling them to estimate the gear ratios they would require as well as any other factors in advance of the race. When the cars were being built or reassembled after each race they would be placed in individual bays. Above each bay was a board which listed the car's next race, its driver, the engine and chassis numbers, etc. Building of a new car would start with a bare chassis placed on four jacks. First on were the front and rear suspension assemblies, followed by the gearbox, engine, radiator, transmission, controls and other bits and pieces. Finally the large rear fuel tank, body, exhaust pipe and driver's seat were added. Last of all would go the wheels and tires.

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The car would then be moved to a sound -proofed enclosure and placed on a wheeled dynamometer and driven for hours on end at different speeds while facing a large fan which helped to adjust room temperature along the regular room controls. Various loads were applied to the car and all of the gears were utilized in order to best reproduce race conditions.

Once at the track the came under the control of Neubauer and his famous flags. Much was made of the German teams precision and a large part of it can be directly attributed to Neubauer as even his rivals at Auto Union were forced to admit. Neubauer was a natural born organizer and all details were noted on paper, and instructions regarding work on the cars were written and passed on to the mechanics. As mentioned earlier the race weekend was used for driver practice. At just the precise time Neubauer would signal the start of practice and the mechanics would engage the electric starter, and the engine would burst into life. After another signal the car would be driven for a few laps at moderate speeds and then coast back into the pits. As soon as the car stopped the mechanics would descend on the car and check the plugs in order to adjust the proper fuel mixture. If the plugs were sooty the mixture was over-rich and need to be weakened by changing the carburetor jets. If the plugs looked dry and burnt then the mixture need richening. Taking into consideration the practice performance by his drivers as well as that of the opposition, Neubauer would decide on race tactics. Meeting with his drivers the evening before the race the battle plan, for there could be no other word for it, was laid out. Some times the drivers would quietly agree to the tactics but other times the drivers would argue long and hard over perceived slights. Neubauer's orders were though always followed, almost. Just as critical as his pre-race tactics were it may have been his ability to adjust them as the race proceeded that would prove to be his greatest skill. Pitstops were also practiced and the Mercedes team was renowned for their quick and precise work. But more than just a stickler for details and practice, Neubauer was a leader of men who was held in a mixture of awe and affection by all who worked for him. With this flawless organization and a strong driver line-up would Mercedes go into battle and the legend of the Silver Arrows was born.