You read the title correctly. The reason for the logical disconnect is that the time period in question is the 1930s, before the war and the most overt atrocities, as explained in a Harvard Magazine review of a new book:
Based on nearly nine years of archival research in Germany and the United States, the book reveals a surprisingly cooperative relationship between studio executives and German officials throughout the 1930s... MGM head Louis B. Mayer made changes to films at the request of the German consul in Los Angeles in the 1930s...More at the link.
In 1932, six months before Hitler came to power, Germany adopted a law stipulating that any film company caught making anti-German (or later, anti-Nazi) films would be prohibited from doing business in the country. For studio executives who feared losing access to German audiences, it was a powerful threat. Before World War I, Germany had been the second-largest market for U.S. films. By the 1930s, the studios were no longer making money there, but they hoped business would improve in time. Urwand says Hollywood executives also worried that if they left Germany and Hitler started a war, they would be expelled from any countries he invaded. So studio heads, many of whom were Jewish, collectively boycotted a proposed film, The Mad Dog of Europe, about the mistreatment of European Jews, and agreed to fire most of their Jewish salesmen in Germany...
Commentators have drawn parallels between the Nazi collaboration that Urwand describes and Hollywood’s current relationship with China, a burgeoning market for American films. Urwand stresses that “China isn’t Nazi Germany,” but he acknowledges some potential parallels. “Hollywood is not going to make a strongly anti-Chinese film at this point, just as it didn’t make anti-German films when it was trying to preserve its business with Germany.”
Photo: ©Hulton-Deutsch Collection/Corbis Images